Markets around the world are giving up some of the explosive gains made during the latter part of 2020 and the first few months of 2021. The USA has seen their 10-year bond yield spike, which is an indication of future inflation concerns.
In SA, however, we have seen inflation numbers going down rather than up and interest rates being kept on hold. Many businesses that have been able to survive with very little economic activity over the past 12 months are now capitulating and employees are being laid off. Unemployment is causing crime to pick up in SA and first-year university students are missing out on normal social interactions due to classes being held online, adding to their frustration at having missed out on a normal matric year. Covid lockdowns in Europe are far worse than in SA, but we are having a disastrous vaccine rollout which will come back to haunt us in the years to come.
All in all, there are many problems in the world and as we have seen in the past, the saying “adapt or die” will ring true once again. We are also seeing some interesting contradictions happening in some areas of the markets. In the USA, for example, property prices are going up but new house sales are going down. Apparently there are enough wealthy buyers with cash to completely block buyers who need a bank loan to make a bid, and due to delays and rising costs newly erected houses are more expensive.
Perhaps it is time for all of us to read Spencer Johnson’s book, “Who moved my cheese”, once again. This motivational business fable was a huge hit in 1998 and it is a quick read – only 94 pages.