Peak Everything? Peak Nothing!, 20/08/2021
This headline caught my eye from a piece published on the 9th of August by our research partners TS Lombard.
- China shifting to consumption,
- the US towards capital investment,
- and the global imperative for decarbonization
were sighted as the three main drivers for the next leg of economic growth.
Reading Tim Harfords ‘How to Make the World Add Up’ brought forth a mind-boggling statistic on the first two points. According to a US Geological study, China used as much cement in its massive infrastructure investment in the 3 years between 2011 and 2013 as the whole of the US did in the entire 20th century. Now the US is facing a massive infrastructure upgrade which President Biden is committed to undertake.
On climate change one thing is for sure, if people weren’t focused on it historically, with each heat wave, drought, flood and forest fire the effort to tackle it will surely increase.
These shifts in spending will encompass individuals, companies and Governments and will no doubt bring new winners and losers on the world’s stock markets. That economic growth is far from over underpins our optimism to invest in equities alongside our more defensive bond funds and the drivers and changes predicted underpin our view of investing globally and actively.
The TS Lombard piece also highlights that short term expectations of economic recovery post Covid were probably over exuberant, which has been born out in the last few days with stock markets and inflation expectations cooling and bond yields falling. As those who check in online regularly will know, the impact on our mixed asset portfolios has been modest after a period of strong performance.
Emerging Markets & Asia Manager Update, 20/08/2021
Investment Insight, 06/08/2021