Our Market Optics chartbook contains data-driven insights that power our portfolio management teams’ views, ideas, and decisions. Each week, we’ll take a look a closer look at one of the charts.

This week’s topic: Global economy: Growth and inflation comparison



·         The economic restart is getting real. China, the U.S., and the U.K. are further along with their vaccinations and reopenings. The eurozone is likely following quickly. Emerging markets are still suffering under elevated COVID-19 cases, so their recovery may be delayed. Still, growth is looking better day by day.

·         The challenge for many areas is in the demand-supply disconnect. Consumer spending is rebounding faster than supply chains can restart. That is contributing to some price pressures. Different industries will likely get those pressures relieved over different time frames. That means not only some (hopefully) transitory inflation but heightened price dispersion where some prices rise faster than others.

·         From an investing perspective, to us, this means it’s likely a good time to consider security selection within countries and industries to hopefully identify the relative winners and losers from this growth-inflation dynamic.

 

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