What we’re reading (4/17)
“The Biggest Risk To The Global Economy No One Is Talking About” (CNN Business). “Nearly 400 million people across 45 cities in China are under full or partial lockdown as part of China's strict zero-Covid policy. Together they represent 40%, or $7.2 trillion, of annual gross domestic product for the world's second-largest economy, according to data from Nomura Holdings.Analysts are ringing warning bells, but say investors aren't properly assessing how serious the global economic fallout might be from these prolonged isolation orders.”
“Bond Rout Promises More Pain For Investors” (Wall Street Journal). “Battered by high inflation readings and sharp messages from Federal Reserve officials about the need for interest-rate increases, bond prices have tumbled this year at a pace investors have rarely seen. In the first quarter, the Bloomberg U.S. Government bond index returned minus 5.5%, its worst performance since 1980. This month, it has lost another 2.4%.”
“Buyout Funds Are Unlikely To Escape Inflation’s Pain” (Institutional Investor). “After a banner year for the mergers and acquisitions markets, dealmakers have slowly found themselves trapped in an environment in which rising prices pose real threats to the valuations of their target companies. And without valuation certainty, they’re in no rush to make deals happen.”
“Bitcoin Risk-Reward Calculation Is Being Upended By Rising Rates” (Bloomberg). “The aggregate 30-day moving-average volume for Bitcoin across Coinbase, Bitfinex, Kraken and Bitstamp is at its lowest level since August 2021, according to data compiled by Strahinja Savic at FRNT Financial. Over the last month, the aggregate daily volume on those venues has averaged just over $1 billion. That reading stood at $2.57 billion in May 2021, a nearly 60% decline.”
“The State Of Globalization In 2022” (Harvard Business Review). “[G]lobal cross-border flows have rebounded strongly since the early part of the pandemic. In our view, the war [in Ukraine] will likely reduce many types of international business activity and cause some shifts in their geography, but it will not lead to a collapse of international flows.”
