Via Bloomberg
The surge in stocks during November show a world that is set for a recovery. Whether that surge can keep pushing higher right now is open for debate. As long as the US stimulus bill is thought to be coming along then that should keep stocks supported. However, politics aside, here is an opinion piece from Bloomberg making the case for a cyclical recovery:
- South Korean and Taiwanese stocks lead the surge higher
These two industrial exporters of North Asia benefit from being in China's slipstream. They are both strongly higher.
2. Industrial metals are soaring. Iron ore is up around 50% on the year and Copper is at a 7 year high having gained around 30%.
3. Transport stocks, another bellwether for global growth, have overtaken the market
What's next?
This is where things become a little murkier. However, some key theme emerge to watch.
- How much have future returns been borrowed this year from all the central bank intervention?
- Are risk assets overpriced?
- Large amounts of money supply should result in inflation. Look at the large amounts of money supply added on the chart below. The last time that money supply was increased this much (around 1944 on the chart) inflation surged to over 15%
What's your take on where things are headed?
