Are we to assume from Facebook’s name change that Mark Zuckerberg is embracing a corporate transformation? Or could it be an attempt to shift attention away from mounting regulatory headwinds? Perhaps, it is a bit of both.

Whatever the reason, Meta Platforms Inc. (Facebook’s new name) reflects the company’s growing ambitions beyond social media. To that end, the company is setting in motion a ten-year US $10 billion spending initiative to ensure that its platform and more than two billion daily active users will be the central player in the next iteration of the Internet… the “Metaverse.”

The latest Canadian data suggests that inflation, on a month-over-month basis, may be abating. Could it be that central bankers are right in the assertion that inflation is transitory? To address concerns that central banks may be ‘behind the curve’, let’s not forget that they employ some of the brightest economists who are constantly sifting through myriad data.

A central theme in portfolio management is risk-adjusted return. Weighing potential upside performance against downside variability is the essential element in setting an appropriate asset mix.

Conventional wisdom tells us that healthy bull markets climb a wall of worry. Ascending to new heights by scaling an abundance of negative factors that are seen as temporary stumbling blocks rather than permanent impediments.

In the current environment, there are plenty of “temporary” stumbling blocks for the bull to scale; the taper timeline, direction of interest rates, elevated valuations, irrational exuberance in sectors (meme stocks), Covid trends, vaccine uptake, inflation, supply chain disruptions, labor shortages, government debt… and the list goes on.

Buy now… pay later! That is the message being telegraphed by most governments as they engage in an unhindered and unprecedented spending spree. Supported by central banks’ quantitative easing, ultra low interest rates and a sense of urgency to support individuals and small businesses during pandemic lockdowns, rising debt levels have become politically palatable.

U.S. equities continued to rally through the first quarter of 2021 supported by strong consumer demand, plus outsized monetary and fiscal stimulus combined with ultra-low interest rates. The S&P 500 Index has been up for five consecutive months and at the end of June had gained 15.2% YTD.

It seems the US Federal Reserve (FED) is flexible when it comes to defining “transitory” inflation. The FED’s base case for 2021 year-over-year inflation was 2.4%. That number was bumped to 3.4% when updated inflation data was released during the second week of June. So too has the timeline for scaling back the US $30 billion per month bond purchasing program, and the FED is now beginning to talk about talking about raising overnight interest rates. FED speak at its best!

It did not take long for newly installed Republican party Representative Elise Stefanik (she is Liz Cheney’s replacement) to go after Joe Biden. It was grandstanding at its best. Standing at the Congressional bully pulpit in front of a scrum of news reporters Stefanik said the latest US jobs report (released on Friday May 14th) was the worst in over 20 years. “Unemployment is up, small businesses are struggling to hire workers,” and it is all the result of the Democrats "far-left radical socialist policies."

Central banks have been aggressively raising rates to slow economic activity so that global economies do not get caught up in a 1970s style wage and price spiral. While their aim is admirable, central bankers may be using a playbook that is not appropriate for the current situation.

Covid-19 was center stage throughout 2020 and will continue to frame expectations in 2021. The rise of new variants, the rollout of vaccines and the sentiment driven upward trajectory of financial markets, are influencing investor psychology. The overriding question being whether financial markets have gotten ahead of themselves.