Today in our Switzer Report for subscribers who like to invest for themselves, I look at whether it’s time to invest now or wait. There’s no one answer for all investors, but I did point out that I wouldn’t be surprised to see stocks going up and down for a few months more until the pressure from positive news turns sentiment around.

Given the persistence of the Ukraine war, it makes sense that stock markets are nervous, especially with oil, gas and petrol prices spiking to keep pressure on inflation, as well as interest rates, which in turn could cause a recession if they go too high.

That’s understandable, but a number of charts showing what’s going on in a positive sense, keeps me sticking with stocks for 2022 and 2023. I could get nervous in 2024 but that’s a story for another day.

As was implied, the Ukraine war is the big gamechanger and if that should end before the year is up, then stocks should surge higher. Reports that Vladimir has cancer and is a target for assassination would be left-field developments that would be good for stocks but this kind of stuff is more appropriate in Hollywood rather than on Wall Street.

That said, if Putin should encounter some bad luck, stock markets and oil prices would like it.

But what other news that affects the global economy inflation, interest rates and the likelihood of a recession is out there, sending positive messages for economies and ultimately stocks?

Here’s the first from Goldman Sachs, which looks at the end of lockdowns. You can see the red line for China is coming down.

Goldman Sachs effective lockdown indexes

As lockdowns fall economic activity spikes, as the following chart from Shane Oliver at AMP shows. You can see that both Australia (the blue line) and Europe (the black lines) are growing strongly as they throw off the implications of locked down economies.

Note how the US (the red line) has started to level out. You can blame the Fed’s interest rate rise policy that’s intended to slow the economy down to lower the country’s 8.1% inflation rate.

And on that subject, Shane Oliver has a nifty chart that shows what’s happening to inflation globally.

You can see how the pandemic’s impact on China especially, as well as other affected suppliers of imports worldwide, and the cost shocks on oil and other commodities from the Ukraine war, have sent inflation up nearly vertically!

But the recent signs say these inflationary pressures are easing, with China gradually getting out of lockdown being a big help.

If I wanted to look for charts that made me negative for the short term, I could find a long list of worrying trends, but many of these are reacting to the threat of too many interest rate rises to kill off inflation. But these expectations could be like the bond market, which has given me another reason to be cautiously positive.

When you get the 10-year US bond yield and deduct the 2-year yield, you get the yield curve. When it’s inverted (i.e. it’s negatively sloping), it says we could see the US going into a recession. Right now, short-term interest rates on 2-year bonds are lower than longer-term rates, which means the yield curve is sloping up and therefore not inverted. You can see the graph line above going up not down!

Let’s hope it stays that way. Falling inflation, fewer interest rate rises from the Fed over the rest of this year and good growth for the global economy, will keep me arguing that stocks will make a comeback later this year.

And if we could get an end to the Ukraine tragedy, the kickup of the economy and the stock market could send share prices off the charts! But there are a few ‘ifs’ and ‘buts’ in that optimistic call.

Go optimism!