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Global Market Outlook 2021 from Russell Investments

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merluzzo
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Global Market Outlook 2021 from Russell Investments

#400911

Postby merluzzo » April 1st, 2021, 5:30 pm

Russell investments have released their Q2 global outlook.

Vaccines and U.S. stimulus have the global economy on track for a strong rebound in lhe second half of 2021.

We expect the reopening trade to favour equities over bonds, the value factor over the growth factor and non-U.S. over U.S. stocks.

https://russellinvestments.com/uk/globa ... 61ffe7188c

Seems reasonable to me, although their prediction that inflation will not rear its ugly head until 2023 may be optimistic.

Any thoughts?

JohnW
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Re: Global Market Outlook 2021 from Russell Investments

#401848

Postby JohnW » April 5th, 2021, 12:23 pm

Is it possible to go back and read a handful of their past quarterly reports to see what their accuracy was like, and if any of their predictions were worth taking action on?
Predicting isn't easy: https://www.marketwatch.com/story/yes-1 ... 2014-10-21

1nvest
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Re: Global Market Outlook 2021 from Russell Investments

#401936

Postby 1nvest » April 5th, 2021, 10:32 pm

merluzzo wrote:although their prediction that inflation will not rear its ugly head until 2023 may be optimistic.

How many trillions have each of Japan, US and Euro printed .... trillions upon trillions. How much inflation has that so far generated - recent figures indicate ... Japan -1%. US +1.7%, Euro +1.3%. Under currency wars printing only generates inflation if others permit such. If others print in lockstep no devaluation occurs.

Much of debt expansion is simply the central banks printing to buy up the treasury's bonds (Gilts), and then return all interest paid on those bonds/Gilts back to the treasury. Might just as well not exist, however the action pushes up demand/prices, which pushes yields lower. Tally up the UK's debt and cost to service that debt and its less now in inflation adjusted terms than back in 2007. And where a large chunk of that debt could in effect just be torn up (QT by the BoE to return or destroy the gilts it holds). BUT they don't just buy UK gilts, they buy others (US, Japan, Euro ...etc.) as part of the 'equalisation' process. it's also used a a reason to increase taxes ... 'look at how big the debt is'. The UK reality is that helicopter money has been directed at certain individuals/bodies but not others. One neighbour might be receiving £2500/month, another nothing. But where both will be expected to 'pay down' the debt. Much of money has also been directed at 'mates', the likes of Johnson to Cameron etc. via government contracts or otherwise. As have some Tory voting regions been rewarded whilst other Labour voting regions been side stepped. Not that such bribes will pay, as Johnson has made such a pigs ear of things, such as not opting to close the borders so his father can continue to jet between the UK and Europe residences; Pretty much devastated care homes; Selectively deployed helicopter money etc. that Starmer will walk it at the next GE. That is more likely when inflation will show as with a larger majority than even the current government they'll be some 'interesting times'.

jonesa1
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Re: Global Market Outlook 2021 from Russell Investments

#401972

Postby jonesa1 » April 6th, 2021, 10:14 am

1nvest wrote:Johnson has made such a pigs ear of things, such as not opting to close the borders so his father can continue to jet between the UK and Europe residences; Pretty much devastated care homes; Selectively deployed helicopter money etc. that Starmer will walk it at the next GE. That is more likely when inflation will show as with a larger majority than even the current government they'll be some 'interesting times'.


I'm not a BJ fan, but I think you're underestimating the regency bias of voters - e.g. the success of the vaccine roll out may be remembered more than previous problems, especially when compared to the EU's efforts. Also, I don't really see many working class voters wanting Starmer (basically a charisma-free patrician who seems disliked by the activists in his own party), nor many from the Tory heart-land wanting any sort of Labour government. Combine that with Labour getting next to no MPs from Scotland and the idea of a large Labour majority doesn't look very likely to me. A loose Labour / SNP coalition could be on the cards though.

merluzzo
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Re: Global Market Outlook 2021 from Russell Investments

#401973

Postby merluzzo » April 6th, 2021, 10:17 am

Much of debt expansion is simply the central banks printing to buy up the treasury's bonds (Gilts), and then return all interest paid on those bonds/Gilts back to the treasury.


What you are describing is a perfect example of monetization of debt. The government will not repay the interest or principal on those gilts, other than in a fictitious way (i.e. to the BoE, that will at some point return the money to the Treasury).

This injects new broad money straight into the economy, especially when the government embarks in gigantic stimulus spending. The combination of quantitative easing and fiscal stimulus may be the trigger for generalised inflation. So far inflation has been mainly channeled into property and shares, but it may be a matter of time before it spreads elsewhere.

As somebody said (Dalio, perhaps), trying to control inflation once it has started rising is like trying to catch a tiger by the tail.

everhopeful
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Re: Global Market Outlook 2021 from Russell Investments

#402022

Postby everhopeful » April 6th, 2021, 1:57 pm

1invest is entirely welcome to his views on politics but I for one don't want to hear them. This sort of left wing agitprop has no place here imho. One of the strengths of this Board is the relative lack of political rants.


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