A New Age for Geopolitics and Global Markets
Matt Eagan, Portfolio Manager and Co-Head of Loomis Sayles' Full Discretion Team, lays out three key themes for fixed income investors.
- An increasingly multipolar world suggests that the world order is in flux with global players like China, Russia and India challenging American dominance. This means that the world is a less stable place where peace may no longer be a sure thing.
- Waning global security and stability, suggesting an unwinding of the globalization trend of recent years, may lead to sovereign, investment, and corporate risk in the form of supply lines and energy sources. More broadly, the increasing implementation of financial sanctions, while perhaps expedient politically, could risk the US dollar’s preeminence as the global reserve currency (particularly in light of China’s desire to put the renminbi forward as a prominent global currency).
- The third theme for discussion is a declining working age population in some countries, which could lead to increasing labor bargaining power and worker wages, and ultimately, potential challenges to corporations and their earnings.
This material is provided for informational purposes only and should not be construed as investment advice. The analysis and opinion expressed represent the subjective views of Matt Eagan as of March 2022, and may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted. Actual results may vary.
CFA® and Chartered Financial Analyst® are registered trademarks owned by the CFA Institute.