Does 2019-nCoV matter for markets?
The coronavirus has added uncertainty to an otherwise low-volatility market environment. Recent developments suggest that the spread of the virus can be contained.
Global financial markets have reacted strongly to rising concerns over the spread of a novel coronavirus. After starting the year on a positive note, most risky assets took a dive at the end of January when the outbreak intensified, though most of this correction has now been recovered.
In the near term, we expect more volatility as a result, but ultimately, we see this as a temporary phenomenon that should only marginally affect global economic growth and markets.
Inflation out of control? You might expect to see an inflation chart like this in an emerging market, but this is happening in the 5th largest economy in the world.
The almighty (and confusing) US consumer. US economic health is intricately tied to consumer behaviour with personal consumption accounting for ~70% of GDP. Predicting whether or not Americans will keep opening their wallets for a new car, a night at a restaurant or a nice vacation has far reaching implications.
Pricing power is back! Inflation remains top of mind for investors but has filtered through to Main Street. This chart from Macrobond Financial shows that more companies are planning to raise prices than at any time in the last twenty years.