As risk-on traders take a victory lap amid surging equity markets and now renewed monetary policy accommodation, the expectations for a soft landing in the U.S. economy now form the base case scenario for a preponderance of U.S. investors.
Japan had been hiding in the same place where it was last seen in 1989 off the coast of north east China; but apparently while no one was watching (or at least no one in the American financial press) the Japanese stock market’s bell weather index, the Nikkei 225, surpassed its historical high set in 1989.
Investors’ 2023 New Years’ resolution was apparently to forgive and forget their travails of 2022, as global markets spent 2023 shrugging off the prior years’ anxieties. Excluding emerging East Asia, major global markets have already fully recovered from their losses related to the inflation induced rate cycle kicked off in early 2022.
Already responsible for an estimated $5 billion in stimulative consumer spending – the equivalent of the entire annual earnings of Starbucks, American Airlines, or FedEx – the Taylor Swift ‘Eras’ Tour is doing more than its part to save the global economy. However, the economic phenomenon being dubbed ‘Swiftonomics’ will forsake China, as the pop legend’s tour plays four dates in Japan and a record six dates in Singapore, but not in the world’s second largest economy.
The investment ocean is roiling. The steady ship of 60/40 had its worst year in a generation and many investors are left feeling either adrift in the storm or run aground on a deserted isle.
