Volatility returned to the markets as Omicron, a new variant of Covid, scared investors. With 50 alterations, including 33 on the spike protein, the markets looked for clues to its contagiousness, lethality and efficacy of vaccines and treatments. Several countries have reintroduced travel restrictions, increasing the downside risks to growth. In a year when market performance has been solid, this heightened uncertainty has prompted a rapid adjustment of portfolios to preserve annual returns.
Sggested review: what are the best laptops for music production? [updated 2022]
At the moment we do not have enough information on this new variant to have a definitive view on its impact. However, our initial analysis of market movements leads us to believe that investors overreacted to Omicron's potential negative impact. In fact, contrary to previous concerns related to Covid, the sale was indiscriminate, with issues oriented towards the reopening of economies that had an equally negative trend as the securities that had benefited from the lockdowns. Furthermore, for the moment, the Delta variant remains the main problem, especially in Europe, where the main countries are reintroducing restrictions that should limit mobility and dent consumer confidence. For now, our baseline scenario after Omicron is one of moderate impact, which is likely to hinder but not derail the economic recovery.
Europe has now come to a point where mandatory vaccination is being discussed, as evidenced by what is happening in Austria, by the ongoing discussions in Germany, as well as by Ursula von der Leyen calling for an EU-wide discussion on ' subject. Regardless of any ethical discussion, and limiting itself to the impact on the market, mandatory vaccination would be a potential strong windfall for risky assets, as it would significantly reduce the likelihood of another round of restrictions.
However, what really caught our attention is the tightening of tone initiated by Fed chairman Jay Powell when he ditched the term "transitional" for inflation in his speech to Congress. Given the uncertainty surrounding Omicron's potential impact on business, the timing and speed of this major shift are odd, marking a significant shift in the Fed's assessment of the trade off between inflation and growth. What is surprising is not so much the need to normalize. In fact, Powell didn't add much to what he was already known for. Activity is buoyant, inflation is high and has spread beyond the volatile components. The brutality of the change of tone, however, marks a clear reorientation of the Fed's priorities (which, among other things, complicates things a lot for the ECB, given that the dynamics of inflation are different in Europe). Part of this reversal can probably be attributed to the fact that inflation has now become a political problem in the United States.
Midterm elections are scheduled for 2022, and curbing inflation was likely central to President Biden's confirmation of Jerome Powell in his role. The point is that this change of tone comes at a time when Omicron could further cloud the Fed's visibility. On the one hand, the variant is weighing on energy prices (crude has lost more than 20% since late October), and it could be a global drag on activity, which should help limit price pressures. On the other hand, it has the potential to further increase supply chain pressures, especially given China's zero-tolerance Covid policy. This could prove inflationary, but for "bad reasons" that cannot be controlled by central banks.
For the moment, the Fed has indeed only gotten close to what the market had already predicted. The weaker-than-expected December labor market report (210,000 jobs versus 550,000 expected) and weaker hourly wage growth (4.8% per year versus 5.0% forecast) lead us to maintain our expectation of two rate hikes next year, starting in June. From an asset allocation perspective, the combination of Omicron and a tougher Fed does not derail our core scenario, which is a slowing but still solid business next year, with EPS growth rising remains in positive territory. While monetary normalization is gaining momentum, real rates will remain deeply negative, which should continue to favor equities over sovereign bonds.
Source: Lyxor AM, Allianz Research
The fourth edition of ITIL (IT Infrastructure Library) was presented by Axelos in February 2019. The ITIL v4 (PDF and other versions available) focuses on practical aspects of IT management and provides a holistic approach with emphasize on Agile, DevOps and digital transformation topics.#2The Subtle Art of Not Giving a Fuck
The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life. In this generation-defining self-help guide, a superstar blogger cuts through the crap to show us how to stop trying to be “positive” all the time so that we can truly become better, happier people. For decades, we’ve […]#3Read People Like a Book
Read People Like a Book: How to Analyze, Understand, and Predict People’s Emotions, Thoughts, Intentions, and Behaviors (How to be More Likable and Charismatic).#4Fundamentals of Corporate Finance
Fundamentals of Corporate Finance 13th Edition (International Edition). This book was designed and developed explicitly for a first course in business or corporate finance, for both finance majors and non-majors alike. In terms of background or prerequisites, the book is nearly self- contained, assuming some familiarity with basic algebra and accounting concepts, while […]#5The Intelligent Investor
One of the greatest investors of the twentieth century, Benjamin Graham, proposed his philosophy of “value investing” that could protect investors from dramatic errors and teaches them to develop long-term strategies. This approach is exhaustively explained in The Intelligent Investor (PDF download available) book, which remains the stock market bible since its first […]#6How Money Works
Money is the oil that keeps the machinery of our world turning. By giving goods and services an easily measured value, money facilitates the billions of transactions that take place every day. Without it, the industry and trade that form the basis of modern economies would grind to a halt and the flow […]#7Business Communication
Everyday Business Storytelling: Create, Simplify, and Adapt A Visual Narrative for Any Audience. Communication is one of the basic functions of management in any organization and its importance can hardly be overemphasized. It is a process of transmitting information, ideas, thoughts, opinions and plans between various parts of an organization. Good and effective […]#8How Business Works
Every type of business has to choose an ownership structure. Although there are variations globally, most countries offer similar types of legal entities, from a single- person private enterprise to a massive organization trading on a stock exchange. There are three key considerations: how big the venture is expected to grow; the complexity […]#9The Essential Manager’s Handbook
The step up to a managerial role can be an exciting, but daunting, new challenge. Suddenly, you are responsible for making sure your team is working together, achieving results, and that overall your department is running smoothly. There is no single technique to becoming an excellent manager, but the Essential Manager’s Handbook provides […]#10Operations Management
Operations Management is important, exciting, challenging, and everywhere your look! Important, because it’s concerned with creating all of the products and services upon which we depend. Exciting, because it’s at the centre of so many of the changes affecting the world of business. Challenging, because the solutions that we find need to work […]
In 1940 Fred Schwed, a stockbroker whose father had lost everything as a short seller on Wall Street during the Roaring Twenties, published this timeless classic on how the stock market really works. Schwed, a pleasure-loving, cultured man who had been expelled from Princeton University in his final year for entertaining a lady […]#12Corporate Finance 11th Edition
Corporate Finance, Eleventh Edition This book has been written for the introductory courses in corporate finance at the MBA level and for the intermediate courses in many undergraduate programs. Some instructors will find our text appropriate for the introductory course at the undergraduate level as well.#13ISE International Business: Competing in the Global Marketplace
The 13th edition provides a complete solution that is relevant (timely, comprehensive), practical (focus on applications of concepts), integrated (integrated progression of topics) and the most up-to-date on the market. Available with Connect: Our highly reliable homework and learning management solution that embeds learning science and award-willing adaptive tools to improve student results.#14Winning: The Unforgiving Race to Greatness
Winning: The Unforgiving Race to Greatness (Tim Grover Winning Series) From the elite performance coach who wrote the international bestseller Relentless and whose clients included Michael Jordan, Kobe Bryant, and Dwyane Wade, comes this brutally honest formula for winning in business, sports, or any arena where the battle is relentless.#15Your Next Five Moves: Master the Art of Business Strategy
From the creator of Valuetainment, the number one YouTube channel for entrepreneurs, comes a practical and effective guide for thinking more clearly and achieving your most audacious business goals. Both successful entrepreneurs and chess grandmasters have the vision to look at the pieces in front of them and anticipate their next five moves. […]#16Your Next Five Moves
Your Next Five Moves: Master the Art of Business Strategy (Hardcover / Audio / Kindle). Creator of Valuetainment, the # 1 YouTube channel for entrepreneurs and “one of the most exciting thinkers” (Ray Dalio, Principles author) in business today, provides a practical and effective guide to thinking more clearly and getting the most out […]#17Finding the Winning Edge
When those who chronicle the history of the game list the individuals who had the greatest impact on the National Football League, Bill Walsh will clearly be among the names of Halas, Lombardi, Brown, Landry, Noll and Shula. But when you consider who has impacted the game most in terms of those who […]#18International GAAP 2020 2021
Generally Accepted Accounting Practice under International Financial Reporting Standards. The content of this book takes into account all accounting standards and other relevant rules issued up to September 2020. Consequently, it covers the IASB’s Conceptual Framework for Financial Reporting and authoritative literature listed below. References in the main text of each chapter to […]#19Schweser FRM Part I Secret Sauce
This review book is a valuable addition to the study tools of any FRM exam candidate. It offers concise coverage of exam topics to enhance your retention of the FRM curriculum. We suggest that you use this book as a companion to your other, more comprehensive study materials.#20We Should All Be Millionaires
We Should All Be Millionaires: A Woman’s Guide to Earning More, Building Wealth, and Gaining Economic Power. Are you ready to fill your life with more peace, power and joy? We Should All Be Millionaires details a realistic, achievable and step-by-step path to create the support, trust and plan you need to master […]