Will we get another Roaring 20’s again?

Abraham George Macro View

Happy New Year to all!

Last year was a year that will linger on for a long time, with most of us in the trading and investment field. We entered the year with a lot of high expectations. There was already the beginnings of a global fiscal stimulus program with japan leading the way. We also entered 2020 with the introduction of 5G and a possible end to the trade war.

We were all set to move ahead like another “roaring twenties” but instead got derailed with a global pandemic. Think we will still get back on track as the ingredients are there for another roaring twenties. The 1920’s were defined by major innovation in the automobile sector and widespread access to electricity. Similarly the 2020’s will be defined by many new innovation mainly through the ever present connectivity via 5G.

Add to that, there are trillions of new dollars floating around to fund this next wave of the information revolution. There are plenty of risk to consider as well. There could be an escalation of US and Iran tensions and further tensions between China and the democratic world.

There is an immediate risk tomorrow as we get the state senate runoff in Georgia. A Democrat sweep would put Biden in pole position with an aligned congress. This will lead to further multi- trillion spending for clean energy. All this can fuel further rise in asset prices and a lot of money will flow into emerging markets as well. Tomorrow the Congress will formally count the electoral college votes. The expectation is that it will be objected by members of the Senate and the House. It could be wild in the markets for rest of the week.

I will resume with updates on individual asset classes with the next report.

Abraham George is a seasoned investment manager with more than 40 years of experience in trading & investment and portfolio management spanning diverse environments like banks (HSBC, ADCB), sovereign wealth fund (ADIA), a royal family office and a hedge fund.