Markets have remained strong, buoyed by vaccine programmes and potential paths out of lockdown assuming greater visibility. Having said that, with various geographical areas moving at different speeds and talk of third waves, there’s obviously a long way to go before anything resembling normality can resume.
Economically, inflation and economic growth dominate discussion. Globally, growth has been better than expected although for reasons already mentioned, it’s an uneven picture; Asia and the US have done well while the Eurozone remains in limbo. Inflation, long thought dead, remains relatively muted but all the ingredients are there for its resurrection ……. huge annual deficits, enormous debt burdens, QE and perhaps the most potent of all, a total disinclination to do anything about correcting them.
We prefer to concentrate upon individual business rather than stock markets, which can often become detached from reality. We take nothing for granted but it’s difficult not to have the feeling that at present, investors are taking just a little too much on trust.