With tapering worries in the rearview, attention has returned to the inflationary environment.
While growth in the U.S and globally is expected to cool from its torrid pace in 1H21, fundamentals remain broadly positive and opportunities could arise...
Though the inflation debate continues, we concur with the Federal Reserve that price increases will be manageable.
With tapering worries in the rearview, attention has returned to the inflationary environment.
Highlights from the week of November 12 – November 18, 2021.
Global stocks saw mixed returns in choppy markets. Worry ratcheted up as Fedspeak flagged inflation-driven risks of accelerated tapering and rate tightening, and renewed Covid lockdowns in Europe clouded the global economic outlook.
Global stock markets posted mixed results for the week, with pullbacks in the major U.S. indexes. The pullback was attributed to intensifying inflation worries after an upside surprise in October CPI.
Global stock markets broadly advanced; the major U.S. indexes posted a fifth straight week of gains. Despite some volatility, markets rose on strong jobs growth, the start of tapering and an upbeat earnings season.
While U.S. Treasuries rallied and yields decreased across the curve, the short-end eased the most, leading to a steepening. Furthermore, the two-to-ten spread widened on the week.
While growth in the U.S and globally is expected to cool from its torrid pace in 1H21, fundamentals remain broadly positive and opportunities could arise in any meaningful bout of spread volatility.
The major U.S. stock markets overcame a Friday tech sell-off to advance, with the Dow posting a record. Volatility eased as upbeat third quarter earnings encouraged investors.
U.S. stock markets overcame a Monday drop to finish the week slightly off highs for the period, as stock buying sentiment got a boost from dropping yields and better than expected retail sales data.
Though the inflation debate continues, we concur with the Federal Reserve that price increases will be manageable. We believe the Fed can conduct monetary operations along its well communicated path, paving the way for reaccelerating, above-trend 4Q21 real GDP growth.