Tis the season for talk of black swans, market trends and bold calls for 2017
London — The broad view on markets next year among investors is that the 35-year bull run in bonds is over, inflation is back and central banks are maxed out. Also, for the first time in a decade, any stimulus for the global economy will come from governments. That, after a year in which politics, economics and finance were turned on their head, suggests bets on further increases in bond yields, developed world stocks and the dollar. Emerging market currencies, stocks and bonds are expected to struggle under the weight of higher US bond yields. Cyclical equities are favoured over defensives, banks should benefit from steepening bond yield curves, while infrastructure spending could boost housing and construction stocks. That’s the consensus. But what goes against the grain and catches the eye? Where might the wrinkles appear? 1. Bond yields to fall? HSBC, which correctly called the recent slide in US bond yields to historic lows, says bond yields may well rise next year and expects ...
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