Businesses designed products in one country, manufactured them in another, and sold them worldwide. Lower labour costs meant cheaper goods for consumers and higher profit margins for companies. Markets loved it.
“You have this wonderful dynamic – probably even better than the Goldilocks scenario of low inflation and low interest rates – of ever-expanding profits and valuations,” says Chad Padowitz, co-chief investment officer at Talaria Asset Management.
“From a pure equity market perspective, it’s fantastic.”
But that dynamic is shifting. According to Talaria’s latest outlook, we may be entering a new era defined by economic nationalism and onshoring, and that could change the game for investors.
“We are in the midst of a fundamental change to the global integration we’ve witnessed in the past three decades,” Padowitz says.
“This will require a fresh assessment of capital, risk, and how countries depend on each other.”
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