Note Précis March 27,2019: More of the Same and yet Different- At a mature phase of capital markets, more of the same appears and yet seems different at the same time. Compared to prior cycles of hubris, companies do appear more cognizant of the importance of revenues, margins and the like. Still needing care are share buybacks and IPO volume increases in sectors in vogue. It is classical as markets mature. Fresh company reports are imminent. Noteworthy as a risk is that with the S&P 500 as an indicator in 2000 and 2008 cycles, equity indices tended to peak after rather than ahead of earnings. Unlike the 1980s, central banks appear more cohesive but also reactive. Latent distortion risk seems little understood even amid a decade of massive quantitative ease. As well, central bankers appear currently increasingly reticent to challenge political assumptions.
Risk could arise from political misunderstandings. Wars, populisms, deficits and trade tensions are all flared up. Absent crisis management, addressing deficits currently fight for profile. Moving beyond one-off announcements, trade talks appear fragile worldwide. In recent cycles, markets have appeared reactive rather than being proactive. On policy pronouncements, seemingly so are the central banks. Even as markets appear returned to momentum in investments, quality appears called for. StrategeInvest’s independent consultancy operates as Subodh Kumar & Associates. The views represented are those of the analyst at the date noted. They do not represent investment advice for which the reader should consult their investment and/or tax advisers. Any hyperlinks are for information only and not represented as accurate. E.o.e.