Richard Bernstein: Global Economic Conditions Are Improving


Dec. 4 2020, Updated 10:53 a.m. ET

Richard Bernstein on the global economy

According to Richard Bernstein, global economic conditions are improving. Deflationary pressure and the fall in commodity (DBC) prices have challenged the global economy (ACWI) (VTI) in recent years.

However, the situation is changing now. Leading economic indicators around the world (VT) like consumer price indexes, wages, and unemployment rates are improving.

In the previous part, we mentioned that the US (IVV) (QQQ) ten-year break-even inflation rate is rising. Market participants expect that inflation will keep rising in the US. Other developed nations such as the United Kingdom (EWU), Germany (EWG), and Japan (EWJ) are also expecting inflation to rise.

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Leading economic indicators

Indicators are suggesting that the global economy is recovering from its deflationary situation. The countries that are above the diagonal line in the graph above are showing positive change in terms of leading economic indicators in comparison to the prior three months. The countries that are below the line have seen decreased health in their economic indicators. Most countries are above the diagonal line.

The improvement in global economic conditions is a welcome sign for markets. If the global market can recover from its deflationary situation, then economic growth will accelerate.

In the next part of this series, we’ll analyze Richard Bernstein’s view on bond yields.


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