Commodities, Wages And Supply Chains-How Geopolitics Are Res…

(MENAFN– Khaleej Times) The war in Ukraine is shifting the conversation on what a post-COVID-19 world will look like. Highlights from a discussion on this topic from Gene Podkaminer, Francis Scotland, Michael Hasenstab and Stephen Dover.

Published: Thu 26 May 2022, 10:00 AM

1. Greater regionalization of trade flows will likely result in a more multi-polar world that is inherently less stable, creating more volatility. This ‘whiplash’ environment looks like cycles of very short, intense periods of growth and inflation.

2. Globally, central bank policy decisions will vary dramatically based on country-specific economic dynamics. Central banks in the United States and Europe have been behind Asia and Latin America in the pace of monetary tightening. Looking at the United States specifically, the Federal Reserve’s response has been slow and reactionary.

3. Commodity inflation in food and energy will likely continue over the near term and will be driven largely by supply issues. More persistent inflation could be influenced by the current combination of shortages in the labor and housing markets. Historically, inflation has tended to be more persistent when driven by shortages in the labor market.

4. Global economic recovery is stalling after strong growth in 2021. Since March 2021, rising prices have eroded purchasing power and durable goods orders have remained flat over the past six months. These factors have led to a slow ‘real growth’ (gross domestic product growth minus inflation) environment, creating an increased risk of recession.

5. With volatility across both bond and stock markets, selectivity becomes key in finding truly uncorrelated assets. Fixed income assets in Asia and Latin America look attractive to us as these regions generally benefit from higher commodity prices. We believe equity portfolios should favor regions primed to effectively manage inflation or have structural tailwinds to growth.

Explore more commentaries on the current market volatility from Franklin Templeton

Meet the new Franklin Templeton :

Copyright © 2022 Franklin Templeton. All rights reserved.

This document is intended to be of general interest only and does not constitute legal or tax advice nor is it an offer for shares or an invitation to apply for shares of any Franklin Templeton fund. Nothing in this document should be construed as investment advice. Given the rapidly changing market environment, Franklin Templeton disclaims responsibility for updating this material.

For professional investor use only. Not for distribution to retail investors.

Data from third party sources may have been used in its preparation and Franklin Templeton has not independently verified, validated or audited such data.

Franklin Templeton shall not be liable to any user of this document or to any other person or entity for the inaccuracy of information or any errors or omissions in its contents, regardless of the cause of such inaccuracy, error or omission.

A copy of the latest prospectus, the annual report and semi-annual report, if published thereafter can be found on our website : or can be obtained, free of charge, from the address below.

United Arab Emirates : Issued by Franklin Templeton Investments (ME) Limited, authorized and regulated by the Dubai Financial Services Authority.

Dubai office : Franklin Templeton Investments, The Gate, East Wing, Level 2, Dubai International Financial Centre, P.O. Box 506613, Dubai, U.A.E., Tel.: +9714-4284100 Fax: +9714-4284140.


Legal Disclaimer: MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button

Get our latest downloads and information first. Complete the form below to subscribe to our weekly newsletter.