Issue 24 – Don’t Panic Over the Recession

The never-ending deluge of headlines taunting the developed economies with rising cost of living and recession fears belies favourable development on the inflation front. Relying solely on reading real-time stock market data to make predictions about where equity prices are heading is not a very good idea. Day-traders tend to hear what they want to hear and algos trade headlines. They tend to trade quickly around key words interpreting economic prints and off the cuff remarks without nuance. That is why price action in the immediate aftermath of prints and remarks is merely a reaction, making it notoriously unreliable in providing advice. Consequently, it is much better to watch what the bond speculators are up to because it is they who are the macro experts. In this connection, the current bond market is teaching the world that the so-called “war on inflation” is abating and that the prospects for inflation itself are improving.


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By Hubert Marleau

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By Hubert Marleau

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