The release of the minutes of the FOMC did not reveal any striking news. Fed board members reiterated their skepticism about the risk of inflation getting out of control, noting the emphasis placed since August on the desirability of dwelling on realized inflation in lieu of expected inflation. The watchword is once again: patience.
These conclusions were echoed by the “shadow central bank” of the United States. In the annual letter to shareholders, JP Morgan CEO Jamie Dimon anticipates an economic boom set to last until 2023, fueled by the $ 5 trillion US household savings set aside, advances in mass vaccination and the upcoming mega package. of infrastructure spending presented by the Biden administration. Shortly before, the Monetary Fund revised its global growth estimates upwards, finding confirmation in the consensual forecasts released by Bloomberg: + 5.60%, is the most recent estimate, for terrestrial GDP in 2021 net of inflation. Almost double compared to expectations (+ 3.1%) just a year ago. With the United States this year destined to grow dramatically more than China.
In this idyllic context (Goldilocks scenario, argues Dimon); it is not too surprising the recovery achieved by the stock markets around the world. The MSCI ACWI, a recurring benchmark for equity management, is at an all-time high; also in the equally weighted version, in which the weight of the USA is appropriately reduced. The S & P500 in turn reached a new all-time high last night, and even our Stoxx600 eclipsed the peak of February 2020: keeping the promise made in the aftermath of exceeding what we referred to at the time as the last diaphragm in 399 and 404 points.
An absolutely amazing performance, but 21 years ago the index was quoted at roughly the same levels as it is currently (393 points); for an average compound annual balance of + 0.5%: nothing impressive, indeed. It can be done better.
The Eurostoxx50 is more delayed, although it has recently risen to the highest levels of the last thirteen years, finally pushing beyond the peaks of 2015 and early 2020.
On the road to the 2007 maximum, however, now there are two obstacles. The first at somewhat close range.
Author: Gaetano Evangelista For more news, analysis, interviews, visit the Trend Online website
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