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Macro Trend of the Past Decade

samplegraph 1
  • GFC Crisis
  • US Fed + ECB in action with QEs
  • ECB has continued its bond buying program till date.
  • Interest Rate trend/ rising Bond Prices
  • 0% Japan for past decades
  • Negative rate in Europe since 2014
  • USA 10 year reached ~1.5% by 2019
  • ROW rates lowered to 2-6% band (mainly in Asia)
  • Bankruptcy and consolidation in many sectors
  • Almost 3 Trillion Dollars of retail savings moved from Equity to Bond markets in USA over decade
  • Large institutional participation in Equity markets across globe through MFs/ ETFs
  • Huge appreciation in valuation of growth stocks and under/ declining valuation of value/ asset based businesses.
samplegraph 2
  • Very low level of capacity creation across globe, barring China
  • Austerity measures in some countries in Europe
  • Deflation in Commodity Prices
  • Unprecedented COVID-19 Crisis and still continuing
  • Lock down across globe (first time) beginning March 2020 following China
  • Unemployment across globe, with USA touching -20%
  • USA Fed swung into action with massive bonds buying program (Corporate + Government)
  • US Government’s massive stimulus in terms of direct payment to citizens, to the tune of almost US$ 2 Trillion, leading to rise in retail savings
  • Fed lowering rate to ~0% for long foreseeable future
  • Europe, Japan and other Governments followed the path to protect their economy
  • Speedy approval of vaccines and implementation of vaccination across the globe
  • Slow and measured opening up of economic activity by all Governments, keeping close eye on COVID-19, mutation, death, etc.

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