Over the years I've grown more skeptical of anyone's ability (including my own) to consistently forecast the future. I take the perspective that strong existing trends typically persist for longer than seems likely possible in their early phases, and that smart [leaders / investors / consultants] are far better off planning for how they will handle the continuation of those trends, instead of assuming their January assumptions will still be valid in December.
In April I listed several key trends worth watching and planning for as 2022 played out. Below is my perspective on how those trends have played out the past 4 months:
Directional Trend from April | Current State |
The US Dollar continues its incredible bull run | Yes- the US Dollar Currency Index has strengthened another 7-8% the past 4 months |
USD and Euro reach parity | Yes- at parity as I write this |
10 year US Treasury rate, having blown past 3.0%, heads towards 3.5%-4.0% | Not so much- the rate has bobbed up to 3.5% and down to 2.5% but has spent most of its time in 2.8%-3.2% range |
Large pharma equities keep outperforming while small and midsize biotechs keep getting smashed | No- while biotech equities remain weak but mostly stable, large pharma equities have also weakened |
Inflation stays above 6-7% for at least 6 more months | Yes, globally |
The US economy enters a recession | Consensus lacking on US- Europe and Asia are far more problematic |
The Chinese economy enters a financial crisis | No- it looks ugly though |
Russia and Ukraine are still fighting 6 months from now (i.e., October) | Highly likely |
Would love to hear your thoughts on these trends and others you follow closely. Reach me at joel@marketcapconsulting.com or book a meeting on my calendar.
