Welcome to my video presentation for today. My article below elaborates on the video’s investment themes.

While watching on television the beautiful art of synchronized swimming at the Tokyo Olympic Games, I couldn’t help but see a metaphor for the global economy.

“Synchronized” global growth is back this year, which is good news for investors who seek diversification and a wide array of opportunities.

World economies rarely move in tandem. In fact, a synchronous global recovery, whereby growth in all regions of both developed and developing markets expands during the same year, has happened only a dozen times over the past four decades. The last bout of synchronized growth was in 2017.

But this year, as the world’s economies recover from their pandemic-induced beating, we’re witnessing another sync. Not only are the world’s regions expanding at a healthy pace, but most sectors are coming along for the ride (see chart).

As global growth syncs, you should focus on value and cyclical stocks. It’s interesting to note that hedge funds are betting that freight rates for shipping will soar as demand for commodities rises. Shipping rates represent a reliable transnational economic indicator.

Read This Story: Scrutiny on the Bounty: Shipping Rates Turn Bullish

Generally, global stocks have been ascendant, with benchmark indices in positive territory. Let’s take a quick world tour of the positive economic trends that have been driving equities higher.

The U.S. economy is robust and should soon enjoy the added impetus of infrastructure spending. Monetary stimulus from the Federal Reserve is another tailwind.

Europe is on the mend as well, as manufacturing makes a comeback and overseas central banks follow the Fed’s lead in maintaining low interest rates.

Accelerating economic growth in the euro zone fueled by stabilizing government policies has made the Continent attractive but underappreciated as an investment destination. Europe’s blue-chip mega-caps are flush with cash and boast solid balance sheets, as well as appealing equity valuations.

Emerging markets have bounced back, thanks to commodities demand and favorable demographics. China has resumed its role as global growth engine, assuaging anxieties that it would sputter.

Taiwan and South Korea are expanding. With export-dependent economies oriented toward electronics and high technology, these two countries are positioned for sustained growth. Indeed, all of the Asian tigers have regained their roar. Even Japan is off the ropes.

Latin America is resurgent as well. The region enjoys plentiful natural resources, a diversified manufacturing base, and an abundant agricultural export market.

The there’s India. The “Jewel in the Crown” remains a major destination for information technology outsourcing. The country’s factories are humming and its tech firms are hubs of innovation.

In the U.S., the prospect of additional fiscal stimulus in the form of President Biden’s infrastructure plan is helping investors put aside their fears (for now) about COVID Delta.

On Wednesday, the Dow Jones Industrial Average jumped 220.30 points (+0.62%) and the S&P 500 rose 10.95 points (+0.25%). The Dow and S&P 500 once again closed at record highs. The tech-heavy NASDAQ slipped 22.95 points (-0.16%) and the small-cap Russell 2000 rose 10.98 points (+0.49%). Ahead of Thursday’s opening bell, U.S. stock futures were trading mixed.

Driving stocks higher Wednesday was an inflation report that quelled worries about economic overheating. The Bureau of Labor Statistics reported that the consumer price index (CPI) jumped 5.8% in July on a year-over-year basis, versus expectations of 5.3%. On a month-over-month basis, the CPI rose only 0.5% in July (see chart).

The core rate of inflation (which excludes volatile food and energy costs) rose by a mere 0.3% on a month-over-month basis in July, below expectations of 0.4%. To be sure, the core rate has spiked 4.3% on a year-over-year basis, but the latest numbers show that inflation is moderating, as you can see from the downward slope of the chart lines.

The little hawks who cry wolf…

You’ll still find fearmongers who harp about imminent “hyperinflation.” These inflation scolds are intellectually dishonest…and they’re tiresome. They’ve been warning about soaring inflation nonstop for more than two decades. These hawks are still crying wolf and they’re still wrong. Their real motivation is an ideological aversion to federal initiatives, such as Federal Reserve stimulus. The professional traders on Wall Street do not share this aversion, as evidenced by the powerful stock market rally this year.

Among credible economists without a political axe to grind, the consensus is that inflationary spikes will prove transitory. You should include inflation hedges in your portfolio as a precaution, but don’t get into a “defensive crouch” because of rising consumer prices. You’ll incur an opportunity cost.

Rising inflation right now is a good thing, because it reflects a healing economy. However, inflation isn’t running so hot as to torpedo the recovery and stock market. That’s the sort of “Goldilocks” balance Wall Street likes.

Admittedly, COVID Delta remains a menace. Just ask the beleaguered residents of Florida. However, for the most part in America and around the world, prudent social distancing and rising rates of vaccinations are mitigating the variant’s impact, precluding a return to business lockdowns.

So enjoy the synchronized show, while you can. It doesn’t happen very often.

In sync with copper…

In the second half of 2021 and beyond, as global economic growth accelerates and infrastructure spending booms, so will demand for one of the world’s most important raw materials: copper.

Gaining exposure to the “red metal” is one of the most effective ways to profit from synchronized global growth. To learn more, click here for our special report.

John Persinos is the editorial director of Investing Daily. You can reach him at: mailbag@investingdaily.com. To subscribe to his video channel, follow this link.