Highlights

  • Reflation to inflation to stagflation?: The rise in prices in many sectors in 2021 was a major trend tracked. If commodity prices keep running while equity markets fail to keep pace, stagflation may be realized.
  • The end of the great bond bull market: Since 2008, the prospect of rising rates may not have been considered by many investors. But, from a technical perspective in 2021, positive correlation between stocks and bonds may signify that a period of more sustained inflation could actually lead to rising rates.
  • Value vs. growth rotation: If interest rates do indeed rise, the performance of growth vs. value stocks could be impacted. The correlation between value and growth stocks and the change in the slope of the yield curve are charted and explained.

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