The temperature is rising. In the US, yields on long-term government bonds have jumped to the highest level since early 2020. Oil prices are rising, and copper is more expensive than it has been in almost ten years – clear signals that markets are bracing for a strong economic recovery.
Not so fast, says David Rosenberg. The internationally renowned economist and strategist from Toronto has no doubt that the pandemic will subside. But he also thinks that the post-opening growth spurt in the economy will soon lose steam and structural problems will resurface and reality sets in. «And then, we have to assess how these massive deficits and debts are going to be regressed, he’s warning.
In this in-depth interview with The Market/NZZ which has been edited and condensed for clarity, the founder of Rosenberg Research explains why he sees attractive prospects for commodities such as oil, gas and copper despite subdued demand. He’s also bullish on US banks. Globally, he sees the best investment opportunities in Asia, where the economy is benefiting from China’s robust growth.
Mr. Rosenberg, one year ago today, the global outbreak of the pandemic triggered the worst market crash since 1929. Since then, the S&P 500 has fully recovered and gained another 15%. What’s your take on the current state of the financial markets against this background?