What should investors consider during periods of high inflation? The stock market, as measured by indices like the S&P 500 and FT Wilshire 5000, has been very resilient from the bottom of the Great Financial Crisis of 2008/2009. We believe the primary drivers of this performance have been low interest rates, low inflation, and cheap energy.
By now, most of you are aware that federal regulators have shut down Silicon Valley Bank (“SVB”), a big lender to start-ups in tech and venture capital (roughly 40% of tech start-ups were customers of SVB), after its parent company disclosed losses that raised fears about other banks. As a result, many financial companies have had steep declines over the past few trading sessions as questions about the health of the banking sector have come into focus.
The economy, interest rates, inflation and stock market valuations have all changed dramatically in a very short period. This has generated many questions.
It’s yet to be determined just how high the Fed is willing to raise the fed funds rate, and though cyclical inflation will recede, we believe core inflation will prove to be more persistent than the Fed and most investors believe.
Arnold discusses the current economic and market environment, covering important topics such as inflation, energy transition, the commodity super cycle, US debt and the budget deficit, and the digital revolution.
In this 26-minute presentation, Arnold Van Den Berg discusses the current economic and market environment, covering important topics such as inflation, energy transition, the commodity super cycle, US debt and the budget deficit, and the digital revolution.