Kerr Neilson is perplexed by the persistent caution expressed by investors and wraps up his view of the financial world in the recent quarterly report
Kerr Neilson is perplexed by the persistent caution expressed by investors and wraps up his view of the financial world in the recent quarterly report. 1) The global economy is gradually healing. 2) Inflation risks are low - no need to hike rates yet. 3) Higher rates will come first in the US and UK. 4) The most intriguing distortion is the low-cost at which non-investment companies can raise money - the lowest in 25 years and lower than the historical average paid by the US Government for 10-year bonds. 5) Higher share prices can co-exist with higher rates on account of dissipating risks. Conclusion: Neilson is shifting more money to Asia and thinks Investors should prepare for an acceleration of corporate activity... as rates begin to move upwards. Whilst there are risks, for now at least one can be reasonably optimistic about markets.