Surprise Surprise…PIMCO likes bonds
“moving away from a “TINA” world
(where “there is no alternative” to equities) to one in which
bonds look cheap relative to equities. Now, bonds also appear
attractive due to the current stage of the economic cycle…
We maintain our underweight in equities and take a cautious
approach, with a focus on low-leverage and high-quality stocks,
particularly those that can grow earnings through an economic
downturn. Looking at traditional equity factors, quality has
historically delivered strong risk-adjusted returns relative to
other factors both during late-cycle expansions and the initial
stages of recession.”
Former White House adviser and foreign policy expert Ian Bremmer discusses the changing global power dynamics over the last few decades. He identifies three factors contributing to geopolitical tension and conflict: Russia’s decline and anger over not being integrated into Western institutions, China’s rising power and integration into US-led institutions, and the neglect of citizens in wealthy democracies who felt left behind by globalization. He predicts in the next 10 years, there will be three different orders (SECURITY, ECONOMIC, and DIGITAL), each with immense importance for how we live.
He speculates the digital order could be split in two, resulting in a technology cold war, or where technology companies become dominant actors on the global stage and erode government capacities, resulting in a techno-polar order. Bremmer calls for accountability from technology companies as they release new and powerful artificial intelligence, and for concern over advertising models that are driving hate and misinformation, which are turning citizens into products and ripping apart society.
Social welfare has influenced Vladimir Putin’s political views and actions in Russia, focusing on the importance of pensions and their impact on Russian retirees. Putin has subsidized monotowns and increased pensions to keep over 46 million pensioners from extreme poverty but had to raise the retirement age in 2018 due to demographic imbalances caused by low male life expectancy, which resulted in a significant backlash. Taking away pensions could potentially lead to the collapse of the social contract supporting modern-day Russia.
Commodities:
https://www.barchart.com/futures/heat-map
Crude, nat gas, and RBOB all down more than 2% today!
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