The article continues:
“The war will have many long-term economic consequences, Fink warns, as deglobalization drives inflation even further, leaving central banks with a difficult choice between higher prices or lower economic activity.”
Decoupling Chinese suppliers with cheap labor would be difficult for Canada and the US in the short term
On the other hand, a split of the United States, Canada and countries in Europe would be catastrophic for the Chinese economy, as it would cut off Chinese manufacturers from some of the richest markets in the world, leaving them with emerging markets as buyers of their goods. .
The tectonic shift and the economic process are not likely to go smoothly. We need to redesign global trade routes and rewire supply chain processes. There is a chance of errors. And as I wrote above, there are costs involved.
Latest tweet/thought on this, from David Roseneberg of Rosenberg Research and Associates.
In fact, globalization is so dead that Canada and the UK have opened free trade talks. Not to mention Canada stepping into the void by increasing oil shipments by 5%. Perhaps this crisis will ultimately bring the West closer together, and not the opposite. #RosenbergResearch
— David Rosenberg (@EconguyRosie) March 25, 2022
The smart US ETFs are moving to value stocks
I believe that exchange-traded fund (ETF) investors are much “smarter” and more aware than those who buy or have been sold mutual funds to them. We may see more evidence of the superiority of ETF investors in the US. From 2021 and through 2022, investors are embracing US value indices that are outperforming in 2022.
This post Understanding the markets this week: March 27
was original published at “https://www.moneysense.ca/save/investing/making-sense-of-the-markets-this-week-march-27/”