The latest version of the index shows that pressure remains elevated, but is unmistakably declining:
Pulling The Chain; Intense Supply Pressures Are Starting to Ease Again | New York Fed Global Supply Chain Pressure Index is moderating. This doesn’t mean the issue is over. It does, however, suggest that one of the world’s most acute problems is beginning to ease. Which is reason to be cheerful.
Covid-19
We all know from personal experience that the pandemic hasn’t gone away altogether. It’s still around, grumbling away as a problem that diminishes quality of life. But at a global level, Covid-19’s ability to take lives really does appear to have been curtailed. These are the latest global numbers as reported to Johns Hopkins University. Omicron was a savage wave, but in its wake the pandemic’s death toll has declined as never before. Nobody will say that it’s over with any confidence after the false dawns of the last two years, but it’s hard to see how anyone could hope for numbers much more encouraging than this, particularly after the horrors of omicron at the turn of the year:
Incidentally, it’s interesting to note that deaths peaked and started to decline exactly at the point when vaccines began to roll out. There is no proof of cause and effect, of course, but there’s a widespread mantra now that vaccines “don’t work.” The facts suggest otherwise. On the critical issue of keeping alive, the circumstantial evidence suggests they’ve worked very well indeed.
Put together a China prepared to prime the pump again, easing supply chains, and the most promising signs yet that Covid can be controlled, and that’s a case for the global economy to perform much better than most assume over the rest of this year.
Keep these thoughts in mind as you brace for Payrolls Friday.
Errata
If you want to read the research paper on factor investing under inflation by Robeco that I mentioned Thursday, you will need to look for it at this link, and not the one I previously offered. My apologies.
Also, in an error that amazingly only one reader appears to have spotted, I butchered a chart of the differential between US and German 10-year yields. I said it had been eliminated. It hadn't. The point that the gap between 10-year yields has narrowed while the gap between two-year yields has widened remains intact, but the correct chart (below) of the gap in 10-year yields is much less dramatic than I made it appear. Again, my apologies.
Survival Tips
I’m writing this immediately after hearing the Abe news. It puts the fate of Boris Johnson, whose resignation address struck me as lacking in contrition and saturated with self-pity and entitlement, into a cruel and worthwhile perspective.
It also puts the note I was planning to write, on the pleasures of watching Wimbledon in high summer, into a pretty harsh perspective. I'll press on, because at times like this it’s especially important to seek comfort. Tennis has charms to soothe the troubled brow, particularly when it takes placee in the cheerful greenness of south-west London. It's a good idea to unwind and get your fill of it this weekend. Some of my favorite matches from the past: Bjorn Borg and John McEnroe's 22-minute tiebreaker in the 1980 final; Borg vs. the late Vitas Gerulaitis in the 1977 semifinal; and Rafael Nadal dethrones Roger Federer in the 2008 final — you can watch either the whole six-hour event, or these edited highlights, or these very edited highlights. Plus here’s Serena Williams at her imperious best in 2015, and, to prove that it happened once, losing to Maria Sharapova for the last time in a major, in the final of 2004.
I will be traveling next week, and probably not sending a newsletter each day. Have a good weekend everyone, and enjoy next week.
John Authers is a senior editor for markets and Bloomberg Opinion columnist. A former chief markets commentator and editor of the Lex column at the Financial Times, he is author of “The Fearful Rise of Markets.”