Last Wednesday (16th Feb) our Partner, Brown Shipley ran an online talk entitled Economic Update, most of which was delivered by Cyrique Bourbon, their Asset Allocation Manager. The talk was introduced by Phil Harris who is our main link to Brown Shipley.
Economic Update by Cyrique Bourbon
Significant bottlenecks in supplies still exist causing inflation and wage growth. Since 1st Jan equities are down 4-6%, commodities are up 25% and everything else down 5-6%.
Brown Shipley are positive on the growth side. 80% of world trade goes by boat, most involve China. The supply side is improving but slowly. There isn’t enough copper or other materials for electric vehicles. Oil is 46% of energy used; it will take a long time to replace.
Chip shortages have gone.
It’s not new to have a dip. We are going to increase exposure to emerging markets and some sectors e.g digital. Markets are punishing some sectors very hard like some banks but not others.
We are looking for high returns; we like emerging market bonds. The US is the engine of innovation.
We’re forecasting 4% growth in 2022 and 2-3% in future years. Mortgage rates will go up; house prices will stabilise. So far Ukraine has only had a small effect on markets.