Truncated information and unclear lags make the assessment of the implications of economic and political changes difficult to understand and forecast.
Take for example the massive quantitative easing programme by the Federal Reserve. In the coming year this means further gains for their stock market. But we can already see the signs that:
- this euphoria is detached from economic fundamentals
- the foreign policy of the US is – and will remain – inward looking.
We think the market will maintain a risk on bias in coming quarters, but we think the US and the rest of the world will relapse in a serious recession within few years and trade and capital mobility will be increasingly restricted between the US and China.
If we are serious about building back better, we need to invest cash and strategy in women, youth and competition policies.
Everything else is just noise.