Asset prices in The Monday Briefing
Stock market boom continues
The S&P 500 closed on Friday at a new all-time high. Since last year’s pandemic-induced crash, the index has almost doubled in value, reflecting a surprising feature of the COVID-hit global economy – buoyant equities. Indeed, stocks have rallied since last March, when the global economy was on the verge of the deepest downturn in more than a century. So far, investors have shrugged off a deadlier second wave, further lockdowns, the more transmissible Alpha and Delta variants and, most recently, concerns over rising inflation.
Commodity supercycle or normal cycle?
Commodity prices have boomed over the last year, boosted by low interest rates and a snap back in global demand. The Goldman Sachs commodity index has risen by 55% from its low and the rally has been broad-based, lifting metals, oil and agricultural commodities.
The coming infrastructure boom… and why it might not happen
The saying “Never make predictions, especially about the future” is attributed to individuals as varied as the physicist Niels Bohr and the baseball player Yogi Berra.
Cars: bust, boom, upheaval
In late 2019 we wrote a Briefing arguing that the car industry is a bellwether of the global economy and of globalisation. A few months later the sector faced the most destructive downturn since the financial crisis.
Creative destruction and the post-pandemic world
Recessions and shocks change the structure of the economy, accelerating the adoption of technology and new ways of working. Shrinkage in some sectors is accompanied by growth in others. The ‘K-shaped’ recovery is not new.
Global slump, equity boom
Strange though it might seem, amid the greatest economic downturn since the Depression, equities have soared. Markets had a dreadful start in 2020. The dawning realisation that the world faced a global pandemic triggered a crash, with global stocks losing a third of their value in the five weeks to 23 March. Since then, equities have staged a comeback, rising by 70% and shrugging off a rising death toll, the discovery of new, more contagious variants of the virus, further lockdowns, Brexit and America’s political turmoil. The world economy is significantly smaller today than it was a year ago, while global equity markets are 12% higher.
Is the economic emergency beginning or ending?
Join our next fortnightly COVID-19 webinar on Thursday, 3 December, at 13:00 GMT. We will discuss the impact of COVID-19 on the future of the city and what this means for the high street. Register here: https://event.webcasts.com/starthere.jsp?ei=1365454&tp_key=8f4d835e66&sti=mmb
Deloitte Monday Briefing: US elections, UK lockdown
Faced with choosing to write about the US elections or the lockdown in England in this week’s briefing we are doing the obvious thing and covering both.
The age of government activism
Join our next fortnightly COVID-19 webinar, focussing on building resilience, on Thursday, 5 November, at 13:00 GMT: https://event.webcasts.com/starthere.jsp?ei=1365454&tp_key=8f4d835e66&sti=mmb
Governments around the world have responded to the pandemic by borrowing, and spending, on a vast scale, equivalent to 12% of world GDP. Twelve years ago, in the financial crisis, monetary policy did the heavy lifting in supporting growth. Now, with interest rates near zero, the burden has fallen on fiscal policy.
The long COVID recovery
Join our next fortnightly COVID-19 webinar on Thursday, 22 October, at 13:00 BST where we will cover public health and economic developments in China, Germany and the UK. Register for this and our upcoming webinars: https://event.webcasts.com/starthere.jsp?ei=1365454&tp_key=8f4d835e66