Friday Morning Coffee 154: The voting machine

180621 Friday Morning Coffee

Friday Morning Coffee 154: The voting machine

For the time being, the sea looks calm on the surface with financial markets and especially equities showing low volatility and continue creeping upwards. Under the surface however there are currently strong currents as Mr Market appears to look for a new direction after having plaid the reflation trade since the gradual reopening of our economies gained speed. The unseen fiscal and monetary stimulus is supporting economic growth. Now some inflationary pressures are building up. Investors and central bankers debate whether these are temporary or not, some patterns we got used to over the past months are starting to change and the reflation trade is increasingly being challenged:

  • Many commodity prices are currently under pressure:
  • Value stocks started to underperform again
  • Bond markets try to adjust to the evolving narrative of the central banks