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We are at an important junction where the global economic recovery has largely been priced into markets. Investors are already anticipating inflation going up and Treasury yields rising further. So, the shift to value and to the more cyclical parts of the market – resources, energy and banks – has arguably played out to some degree.
Mid-January is an interesting inflection point, as in many ways this period represents the peak of good news – the uncertainty of the US election was removed; Biden was inaugurated; there were more positive developments on the vaccination front; and there was widespread optimism about economies re-opening. So, market movements already reflect the anticipated recovery to a large extent.