In addition to electoral pressure in developed countries for jobs to be brought back home, supply chain disruptions and geopolitical risks mean globalisation is evolving. As companies seek to diversify supply chains, profits may well decline while consumers can expect to pay higher prices.

Given the inverted yield curve, some investors fear the US economy is stalling, which could see the end of the equity market bull run. However, not only are there doubts about the yield curve’s ability to accurately predict a downturn, other indicators that monitor US recession risk remain healthy.

Europe and the UK rely on imports from Russia for a third of their gas, putting them at risk from disrupted deliveries amid fighting in Ukraine. The US should be more resilient given trends in household savings and spending on energy.

China can’t just abandon its zero-Covid policy if it means health care services would be overrun, especially in rural areas. Economic reopening has facilitated robust recoveries in the US and Europe but it has also led to a number of challenges.

The Fed’s more aggressive policy-tightening stance is not surprising in the face of US inflation. Yet, the expected interest rate rises two or three times a year seem relatively restrained given that unemployment is not a huge concern.

Losing control of the House or Senate would make it harder for Biden to pass his reform agenda. Policies can still be pushed through via executive order, although this would add to uncertainty for investors and businesses.

The breadth of Beijing’s reforms have received much attention, but policy proposals elsewhere show it is far from alone in seeking to put people before profit. However, governments also have to strike a balance between improving equality and achieving growth.

In 2013, Treasury yields fell as tapering began, leaving bond and corporate debt markets higher. This time, US bond yields are likely to rise and could dampen returns in a stock market already jumpy from overheated valuations.

Three factors have been driving US inflation – energy prices, production bottlenecks and aggressive stimulus programmes. But as these risks subside in the next two to three quarters, investors cannot afford to be complacent, given high equity valuations and the hot property markets.

The pace of vaccinations globally, the US Federal Reserve’s policy intentions and the UN climate change conference could all move markets.

Asian governments need to accept that infections will occur even after their populations have reached herd immunity. Lockdowns, closing borders and social distancing restrictions are only temporary and carry high economic costs.

China’s ambitious emission goals and the US returning to the Paris Agreement have energised environmental efforts. The global shift towards renewables is good for the environment and a multi-decade trend that investors should embrace.

Economies that have failed to control the virus so far might be able to compensate with successful vaccination programmes. Those who can catch up at this part of the race against Covid-19 can still emerge from the pandemic stronger.

As the US Federal Reserve is unlikely to raise rates soon, Asian central banks’ ability to take the lead is limited. Instead, policies that target credit growth and build buffers to protect the lenders and borrowers can help prevent overheating.

The new US president’s focus will be on taming the pandemic at home, not rolling back Trump’s trade measures against China. But the recovery of the US economy, especially the service sector, is critical to boost the global economy.

Over a long horizon, a contrarian investment strategy does not pay off. Instead, it is preferable to bet on trends that look set to stay, such as innovation in the technology sector and policy shifts that support carbon-neutral goals.

Further fiscal stimulus to support the economy must also be high on Biden’s list of priorities, given that earlier support measures have expired. A divided Congress means he must operate down the middle to gain bipartisan support.

US and European government bonds used to be an insurance policy but now investors are paying a higher price for protection that might not be as effective. Hong Kong’s inflation-linked bonds offer an alternative, while Chinese bonds are drawing international attention.

Fed’s switch to allowing inflation above 2 per cent means US rates will stay lower for longer, boosting demand for higher yielding bonds, particularly in emerging markets.

Recovery may be delayed but is unlikely to be derailed with more fiscal stimulus coming, low interest rates, targeted lockdowns, and businesses finding creative ways to operate.

Central banks, under pressure to buy assets and keep rates down to support government debt, have promised to keep it temporary to avoid the risks of inflation and capital flight. But unwinding the policy will prove very difficult.

Governments lifting coronavirus measures and allowing some businesses to resume operations suggests stage one of a global recovery has begun. The second stage will be more challenging with lingering economic damage and US-China trade tensions.

While companies will push to diversify supply chains and pay more attention to ESG factors, their preference for globalisation – and the profits it brings – won’t change

The zero-interest rate environment is likely to continue long after the crisis abates and government debt will balloon. Governments will have to make difficult decision on which companies to save, without upsetting the principle of market forces.

The Covid-19 outbreak is holding up production in parts of China, and making relocation a more concrete possibility. However, China’s logistics infrastructure and huge consumer market give it advantages over other production locations.

Justifiable fears about a full-scale US-Iran conflict gave markets the jitters, but they quickly calmed down. For investors, the key is to understand whether a particular event will have a sustained impact on the global economy and corporate performance.

This month, China’s central bank cut lending rates by just 5 basis points. Unlike during previous slowdowns, the PBOC is keen to avoid flooding the economy with liquidity and starting another boom-bust cycle.

History shows that 68 per cent of incumbent presidents get re-elected. So Donald Trump is likely to stay, the division between the House and the Senate is likely to continue, as are US-China tensions.

Central banks like the Fed and ECB can hit the accelerator of policy easing all they like but the moribund global economy can only gain traction if governments start spending and geopolitical tensions ease.

A greater diversity of investors minimises volatility and subjects Chinese markets to greater scrutiny, strengthening them in the long run. In return, Chinese investors with greater access to overseas markets could diversify their portfolios and bring best practices home.