Michael Sprung's Top Picks: December 9, 2021
BNN Bloomberg
Top picks from Michael Sprung, president, Sprung Investment Management
MARKET OUTLOOK:
As 2021 comes to a close, markets are becoming choppy as investors contemplate some of the risks that are pervading market sentiment following a year in which the trend has been decidedly bullish.
Pandemic conditions continue to restrict civil liberties as new variants appear and caseloads rise in yet another wave. The latest variant, Omicron, appears to be spreading at a faster pace than its predecessors and its resilience to the current vaccines is still being determined.
The disruption to the economy resulting from the response to the pandemic has caused severe strains on global supply chains. Over the past few decades, supply chains have adjusted to cater to a more globalized, just-in-time process, that does not work in a world of restricted borders.
It will take some time for supply chains to reorganize the logistical issues of providing goods and services, particularly if a greater level of national security is desired. These disruptions are most apparent in the resurgence of inflationary concerns exacerbated by shortages in both goods and labour. Central banks at first postulated that these inflationary pressures would be temporary and dissipate as a recovery quickly ensued, but doubts about the speed of any recovery are now taking hold.
Valuations have become stretched during as markets have advanced. 2022 may well prove to be a more challenging year and markets may be much more volatile.
