FNArena’s Weekly Insights – April 04 2022

In this week’s Weekly Insights:

-Real Market Support Is Invisible
-Conviction Calls
-All-Weathers: Steadfast Group
-At The AIA Conference
-Presentations in April

By Rudi Filapek-Vandyck, Editor FNArena


Real Market Support Is Invisible

Sometimes it’s what we cannot see that is most important.

Now that global equity indices have staged a strong come-back rally throughout March, a lot of head-scratching and tea leaf reading is occurring. How to explain this explosive turn in sentiment when the war in the Ukraine is still raging, bond markets are flashing warning signals and forecasts for inflation are on the rise, still, while forecasts for economic growth (and thus corporate profits) are declining?

Amidst all the finger pointing at technical trading, short covering, the US options market, and a continuation of buy-the-dip strategies -that all made their contribution, no doubt- one most interesting piece of research has been released by the global strategy team at Citi led by strategist Robert Buckland.

On the team’s analysis, global equities continue to be supported by the fact that ‘real’ bond yields (‘real’ meaning corrected for inflation) are still negative, irrespective of the rapid rise at face value in 2022, and Citi’s house view remains that real yields will likely remain in the negative throughout 2022.

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