The “Buy the Dip” correlation has really changed: the intermarket scenario, in which this umpteenth rebound and recovery takes place, has perhaps reached its peak. Indeed, commodity prices have risen by 43% in the last 12 months. In the same period, yields rose by 90 bps on the ten-year US bond, despite a monetary policy that is still hyper-expansive.
We believe that the quarterly reports of Q3 may reveal ugly surprises: companies will not be able to completely unload the component of the increase in raw materials on finished products and therefore will have lower-than-expected profits.
The point is to understand how far below expectations will be. Not only that, the tightening of energy prices will most likely bring the world economy into recession as early as the fourth quarter of this year. Perspectives that do not justify, at least for the moment, the assumption of further investment risks.
We believe that the quarterly reports of Q3 may reveal ugly surprises: companies will not be able to completely unload the component of the increase in raw materials on finished products and therefore will have lower-than-expected profits.
The point is to understand how far below expectations will be. Not only that, the tightening of energy prices will most likely bring the world economy into recession as early as the fourth quarter of this year. Perspectives that do not justify, at least for the moment, the assumption of further investment risks.
