FNArena’s Weekly Insights – July 12 2021
In this week’s Weekly Insights:
-Is Risk-Off The Message?
-Conviction Calls
-Research To Download
By Rudi Filapek-Vandyck, Editor FNArena
Is Risk-Off The Message?
It wasn’t that long ago when share markets were dominated by the view that everything old was to become new again, with economic growth and inflation on the rise fueling predictions of much higher bond yields and the swift return of ‘value’ stocks and cyclicals while Quality and Growth were deemed grossly overvalued, poised for a big punishment to the downside.
That’s not the scenario we have seen unfolding post-March.
Throughout at times excessive volatility, the 2021 whiplash market has directed underlying momentum back towards Quality, Growth and steady defensives, severely testing the conviction and resilience of those who went all-in with the previously so popular reflation trade.
10-year government bond yields should have been well on their way to 2% by now but instead they fell to 1.25% in the US last week and remain well below 1.50%. As bond yields remain the primary driver behind the direction of other markets, including FX and equities, it goes without saying the non-compliance of bonds has triggered heavy debates around the world about what exactly is going on?
Below are the views and assessments of some experts who never bought into the majority view that dominated financial markets earlier in the year. Given these alternative views have proved correct to date, investors, at the very least, might want to consider their merits and validity in light of recent market moves.
