01 Nov Viewpoints November 2021
PRESSURES
Stocks drifted lower over the last two months before catching a bid in early October. Rising energy prices have raised concerns about growth and inflation. There have also been pressures from the Common Prosperity initiatives being pursued in China. We have seen a rise in the U.S. 10-year yield to nearly 1.6%, mostly tied to an increase in 10-year inflation expectations to over 2.5%. Yet the S&P 500 is now barely off its all-time high. A favorite leading indicator of brewing troubles – the credit markets – aren’t signaling concerns in the developed markets as developed market investment grade and high-yield spreads are well-behaved. However, emerging market high-yield bond yields have seen a significant increase of late (see chart), tied to deteriorating credit in China property markets. Read the full Viewpoints November 2021 newsletter.
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