Market Commentary on the Q2’2021 Results Season: From Reflation Trade to First Signs of Stagflation?

Having followed closely the first three weeks of the Q2’2021 reporting season, Kirkow Consulting GmbH & Co KG has just published the regular market commentary, with a specific focus on the outlook provided by various management teams in comparison with the hard economic data published for the eurozone economy on Friday, 30 July 2021. Kirkow features specifically market reaction to growing inflationary pressure, leading to a repricing of assets and the unwinding of the global reflation trade, which had dominated global stock markets since the emergence of coronavirus vaccines in late October 2020. Kirkow Consulting also observes a new „green rush“ to commit to reaching a net zero goal in greenhouse gas emissions and discusses various companies’ insights into first lessons learned from the energy transition and how to accelerate the decarbonisation effort.

One key observation is the predominantly muted outlook for the current quarter between July and September – in stark contrast to record results being published for April to June 2021 – as supply-chain disruptions further unravel due to labour shortages, the massive price increase of raw materials, as well as semiconductor bottlenecks and logistical constraints.

The analysis is structured along the following themes:

• Cryptocurrency and trading
• Unwinding the global reflation trade
• Signs of a new green rush
• Focus on labour

You can find the complete study here.