While much has transpired in financial markets over the past quarter, much remains unclear about the road ahead. Bond yield melt down, equity trap door decline, financial repression, sovereign debt infection, all have become front-page news. Does this mean all is in the price and one can go bargain hunting? Not so fast remains the counsel, not so fast.
Three big risks remain. First, the shape and timing of the EU sovereign debt end game. Second, the effect of sharply lower OECD growth on US corporate earnings. Third, the rising risk of stagflation in the emerging economies.