Exposure rates of the Dorval Asset Management Range – 19th November 2021

Economic activity stats in the United States point to a robust recovery in growth in the fourth quarter, with the Atlanta Fed’s Nowcast model projecting growth of 8.2% on an annualized basis, as compared with the “timid” 2% in the third quarter. This uptick is being driven by two factors – economies reopening after the outbreak of the Delta variant in the summer and the gradual easing in bottlenecks.

We are seeing growing signs that bottlenecks are hitting their peak, although it will take several months for supply to fully normalize. For example, US automotive production recovered sharply in October (cf. chart 1), after grinding to a halt over the summer as a result of electronic component shortages, thereby slicing 1.4 points off GDP in the third quarter.




With inflation hitting the headlines in the financial press, freight cost indices seem to have peaked (cf. chart 2).


With winter getting well under way in the Northern hemisphere, Covid-19 has reared its ugly head as case numbers pick up in Europe. Meanwhile, the US also looks set to be affected over the weeks ahead (cf. chart 3).




Hospital admissions remain manageable as a result of vaccination levels (cf. chart 4), which should help countries get through this phase without creating excessive disruption for economic activity. The surge in new cases could actually even convince the remaining heel-draggers to get their jab. In any case, the resurgence in Covid-19 substantiates central banks’ cautious approach and eases the pressure for an acceleration in monetary policy normalization.



Covid-19 anxiety remains a source of volatility for the financial markets, although the experience over recent months has reassured on investors’ ability to look beyond such periods of doubt. We have slightly reduced our exposure in the most invested funds with a view to managing risk.



Download the weekly letter in PDF version: Exposure rates of the Dorval Asset Management Range – 12th November 2021

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