In August 2020, we postulated as to whether the recovery of the world economy would take the shape of a V- or a U- or an L. What we are seeing emerge instead is a K-shape recovery, where different parts of the economy and different countries recover at different rates and in different magnitudes. A…
The world economy is showing surprising resilience in the wake of the pandemic, boosted by fiscal stimulus and low interest rates. Several large economies have reported higher than expected GDP growth for the first quarter of this year. Year-on-year, China’s economy grew by a record 18.3% in the first quarter, while US output in the…
US President Biden has set out the first part of a grand infrastructure and jobs proposal, which will see $2 trillion ploughed into America’s infrastructure and its shift to greener energy. The White House plans to pay for the proposal by raising corporate taxes and eliminating tax breaks for fossil fuels. The massive spending on…
Generous central bank and government stimulus programmes have helped to keep the world economy and equity markets afloat since the start of the pandemic. As vaccination drives accelerate across the globe, economists and analysts are speculating about what will happen when these programmes run to an end. Equity markets in China offer us some insight,…
Fund managers around the world are scrutinising human rights and environmental concerns in their investment decisions. BlackRock—which last year committed to selling stakes in fossil fuel companies—has signalled that it now plans to press companies about their policies related to human rights, as well as biodiversity, deforestation and water. Economists forecast that a failure to…
Australian virologist and Nobel prize winner Sir Frank Macfarlane Burnet declared in 1962 that one of the most important revolutions in history was the “virtual elimination of social diseases”. After all, within two decades, smallpox and polio would be eliminated from most advanced nations. Yet, according to the Financial Times, Burnett had not fully considered…
Economists and analysts have, from early in 2021, signalled the danger that stock markets may face a ‘taper tantrum’ this year – in other words, a surge in US treasury yields in response to an indication that the Fed may begin tapering quantitative easing, despite the Fed’s continued reassurances to the contrary. The fear is…
Despite steep losses in US stocks on Wednesday and Thursday, much of the narrative this week focused on how the world economy will move beyond the pandemic into recovery. With more than 225 million vaccine doses already administered across 100 countries (according to Bloomberg) – and an accelerated pace of inoculation – hopes are rising that the worst of the…
Bitcoin again captured news headlines as the cryptocurrency surpassed the $54 000 level on Friday. The currency has moved more mainstream with companies such as Tesla and MicroStrategy having recently acquired/added to their holdings, and PayPal allowing 346 million users to buy and spend Bitcoin on their platform. But the explosive rise in the Bitcoin…
