While demand is expected to reach the record highs set before the -pandemic, supply of the black diamond is unlikely to keep pace and is most likely to remain stagnant or even fall eventually.
Investors should be prepared for the biggest inflation scare since the 1980s, warned Christopher Wood, global head of equity strategy at Jefferies in his weekly note to investors, GREED & fear. “For now investors should be prepared for the biggest inflation scare since the early 1980s, and wait to see how the (US) Fed reacts. In the meantime, Treasury bonds are likely to sell off more, and cyclical stocks rally more, before any such tapering scare,” Wood said. That said, he believes that if inflation really does return on a longer term basis, it would mean that equities and bonds would become positively correlated on the downside - that is they will both go down in price together.
A steady fall in Covid cases coupled with a sharp economic recovery in India has made Christopher Wood, global head of equity strategy at Jefferies reiterate his bullish view on Indian equities. In December 2020, Wood raised exposure to Indian equities twice in his Asia ex-Japan long only portfolio. “With Covid cases in India now 88 per cent off their peak amid growing hopes of herd immunity, India looks right now Asia’s best post-Covid recovery story,” Wood wrote in his weekly note to investors,
GREED & fear. For the stock market to have a real nasty unwind at the global level rather than just a bull market correction, Wood believes there needs to be a catalyst in the form of an economic downturn or a material tightening in US Federal Reserve s (US Fed) policy. He ruled out the possibility of either of these catalysts materialising.