Credit Suisse Suresh Tantia on Recent Market Selloff

The video discusses the impact of the Delta variant on economic recovery and market concerns, noting that while it may delay recovery, it is unlikely to cause major lockdowns. The bond market's confusing behavior is attributed to factors like the Fed's tapering plans and rate hike expectations. The yield curve is analyzed, with expectations of eventual steepening as inflation remains high. The equity market is expected to see short-term pullbacks but should rise by year-end, with cyclical sectors benefiting. Tactical indicators suggest caution, but the bull market is expected to continue as recovery progresses.

What is the expected impact of the Delta variant on economic recovery according to the speaker?

• It will cause severe economic disruptions.

• It will lead to a complete market crash.

• It might delay recovery but won't cause major lockdowns.

• It will have no impact on the economy.

What are some factors contributing to the confusion in the bond market?

• Delta variant and Fed's tapering plans.

• High inflation rates and stable growth.

• Strong currency and trade surplus.

• Low unemployment and high consumer spending.

How is the yield curve expected to behave according to the discussion?

• It will steepen as inflation remains high.

• It will remain flat indefinitely.

• It will become unpredictable.

• It will invert due to economic slowdown.

What is the short-term outlook for equity prices?

• They might experience a pullback but will rise by year-end.

• They will remain stagnant.

• They will crash and not recover.

• They are expected to decline significantly.

Which sectors are expected to benefit in the equity market?

• Real estate and energy.

• Utilities and consumer staples.

• Cyclical sectors like financials and materials.

• Technology and healthcare.