Since the beginning of this year, global financial markets have been very depressed. Major stock indices around the world have fallen by 5-10% amid higher investment risks derived from three factors:
– First, inflation risk: Although we see evidence that some of the supply chain problems that were pushing up prices are starting to ease, some other major factors causing rising inflation still persist.
The huge number of ships waiting at Long Beach Port in Los Angeles and Rotterdam in the Netherlands is finally declining. Inventories in the US are rising, meaning more businesses now have what they need to make products to fill order backlogs.
Also in the US, growth in house prices is decelerating and claims for unemployment benefits are falling. This indicates that inflation pressure from rents and wages may be reduced in the future.
However, rising crude oil…
