Inflation, central bank policy tightening and Covid-19 infection rates continue to threaten the bull run for stocks.
James Solloway, chief market strategist at SEI's Investment Management Unit, struck a similar tone last week, noting that GDP growth will decelerate, labor markets will tighten, inflation will peak and Covid will continue to have a short-term negative effect, the global economy should continue to manage through the periodic setbacks.
Although the data so far has indicated that the highly transmissible omicron variant may not be as severe as previous iterations of the virus, Mazars Chief Economist George Lagarias said Thursday that markets should avoid complacency about the possibility of other pandemic-related shocks. "All it takes is one new vaccine-resistant dominant variant to undo months of global vaccination and throw predictions out of the window."Lagarias also highlighted that U.S. stocks, in particular, are expensive and concentrated — a feature highlighted during last week's weakness among tech behemoths — but noted that investors have few alternatives to stocks in general at present.