3 themes for markets in 2021 – From our today’s newsletter

“….The first theme is the weakness of the US dollar, which probably will continue in 2021 and help the positive mood in markets and particularly the small caps & emerging markets.

The second theme is about the policies of the new US administration, especially on two fronts.
On the internal front, everybody is waiting for some kind of a “New Deal” to come and give rise to infrastructure spending, especially in Green Energy technologies. On the second front, everything is about the new US foreign policy and its relation with China & the new “cold war”.Thus, short term there will be most possibly positive news for the markets, although long term the “Thukydides trap” is there.

The third theme is the possible return of inflation. The non-visible inflation is here, but it is still contained in the financial system. Most possibly this liquidity will eventually be directed to the real economy and some inflation will come back. This upsetting development for the equities & bonds markets plus the expansionary US & China fiscal policies will favor greatly commodities like copper, iron, aluminum, etc., a trend that already has been apparent in commodities markets recently…..”
In any case , stay tuned!