Paul Christopher, Head of Global Market Strategy for Wells Fargo Investment Institute (WFII), covers with co-hosts Jeffrey Sherman and Samuel Lau his macro outlook for growth and inflation, the case for cyclicals, small caps and value in the U.S. stock market, commodities as a current “tactical favorite,” shortening duration for fixed income allocations and the suitability of a managed allocation to cryptocurrencies for qualified investors among other topics. While Mr. Christopher suggests the reprise of inflation might be stickier than foreseen by the Federal Reserve, he does not expect a return to 1970s rates of rising prices. “Inflation is really going to go with growth,” he notes. “And if we’re at peak growth, then you have to figure we’re at peak inflation.” The WFII, he says, expects inflation settling in at 2% to 2½%. “We don’t think that the market is worried about the Fed letting inflation go too far. That’s why the Treasury curve flattened the way it has.” Thus, Mr. Christopher likes stocks better than bonds, although he still recommends some allocation to shorter duration munis, corporates and preferreds to provide some ballast against the volatility of equities. This edition of the Sherman Show was recorded July 13, 2021.