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The writer is global chief investment strategist at the BlackRock Investment Institute
Market sentiment has been swinging between extremes: one day the concern is runaway inflation; the next, the gloomy prospect of a deflationary spiral.
That financial markets are struggling to find their footing should be no great surprise: the world’s worst pandemic for 100 years shut down much of the global economy for close to a year. As it restarts, the question markets are grappling with is: what comes next?
There are no case studies that provide anything close to a working hypothesis. So much in financial markets and global trade has changed since the 1918 influenza pandemic that there is little to be gleaned from that experience — beyond, perhaps, the influence of a similar psychological trauma on our behaviour.