Bonds to rally as economies slow

Financial markets are going through one of their periodic bouts of uncertainty. While 1999 was generally an excellent year, things have been more difficult in 2000, as highlighted by the performance of the Nasdaq, which doubled in value between October 1999 and March 2000 and then fell by around 30%. There is still plenty of potential good news out there. Inflation is unlikely to race ahead, bond yields have recovered from their lows seen in 1999, cash flow to mutual funds is robust, and the global economy is set to grow this year by around 3.6%. In normal circumstances, this would be a re...