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What's going on?

The OECD predicted on Wednesday that the global economys still headed for its biggest ever annual shrinkage, but it’s not all doom and gloom.

What does this mean?

Things are bad, the OECD admitted, but not quite as bad as it thought they would be: the organization updated its annual forecast for this years global economic decline from 6% to 4.5%. And its not alone, with some major central banks having made their own less pessimistic predictions lately. Still, there are plenty of countries in varying levels of lockdown, and even those that arent might not see industries like travel and leisure recover any time soon dragging down the global economy for years to come.


According to the OECDs forecasts, Chinas the only major country thatll grow its economy this year, albeit barely. And while the organization still reckons the US and Europe will shrink, their actual declines probably wont be as bad as when it made its predictions back in June. Prospects for emerging markets like India and South Africa, on the other hand, are only getting worse.

Why should I care?

For markets: Here come the taxes.


The OECDs update should be a positive sign for stock markets, which in theory reflect the wider economy. But investing heavyweight Blackstone doesnt think thatll hold up this time around (tweet this). Government tax cuts, low interest rates, and ongoing central bank support have helped cushion the economic collapse and send stocks to record highs, but Blackstone reckons theyll eventually give way to rising interest and tax rates. And given that high borrowing costs and taxes eat into company profits, that could limit share price rises over the next five to ten years.



The bigger picture: Control, alternative, dont delete.


Investors who share Blackstones concerns might now be looking elsewhere for returns namely fine art, private equity, and other alternative investments. And with good reason: those once-exclusive assets are increasingly accessible to everyday investors via fintech platforms, as well as traditional investment managers.

Originally posted as part of the Finimize daily email.

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