![]() ![]() Savvy firms will angle for ways to benefit from this increased fiscal largesse, whether in tuition subsidies, bridge contracts, or electric vehicle charging stations. The best investments will be in companies that look resilient amid much larger trends that will shape profits over the next decade.Įven after the surge in pandemic support, government spending and debt look certain to rise amid pressures to redress inequality and pay the costs of climate transition. The real market action this year will not come from big moves in the dollar or treasuries or oil. Will the Baltic Dry Index of commodity freight rates spike 62% amid supply chain woes? Almost certainly not. Will copper rise 25% again (on top of 26% the year before)? Highly unlikely. Most emerging markets, at least where their leaders don’t defy the laws of economics, should finally benefit from vaccines and the global trade recovery. China will slow, but authorities will ensure economic health as the National Congress of the Chinese Communist Party convenes. ![]() The world’s richest governments will post smaller deficits, but still spend generously. The Fed will tighten a few times, but will still err on the side of loose policy as inflation pressures ease. New Covid variants will likely emerge throughout 2022, but we will manage them better. This means investment returns will depend more on choosing the right parts of the capital structure of the right companies than trying to predict the number of rate hikes or the price of oil.Įven for someone who does macro for a living, it’s shaping up to be a year of micro choices. And as the recovery continues, the macroeconomic shifts this year will be significantly less dramatic than the Covid shocks and policy responses over the last two. The first is far too specific for anyone to take the guess seriously the second is much too broad for any answer to be meaningful.
0 Comments
Leave a Reply. |