Russia’s invasion of Ukraine, in what some fear will be Europe’s largest battle since World War II, has added volatility to markets which were already impacted by decades-high global inflation numbers, with interest rate hikes from various central banks (predominantly the US Fed) to follow during the course of the year. These combined events have…
Just how different this year is proving to investors! Most analysts expected some action on interest rates from the US Federal Reserve in 2022, but perhaps not the five rate hikes they’re now pricing in. Inflation was clearly driving upwards, but we’re seeing much higher, more consistent price increases. Since early January, many global institutional…
The book The Wisdom of Crowds by James Surowiecki refers to the idea that large groups of people are collectively smarter than individual experts when it comes to problem-solving, decision-making, innovating, and predicting. This is especially relevant as it pertains to financial markets, but there is an important caveat that participants in the crowd need…
The week was dominated by the mixed fortunes of two of the world’s largest companies, namely Meta, the holding company for Facebook, and Amazon. Facebook parent company Meta has produced less than stellar results, and – according to UBS – is the TikTok for “old people”. Its results led to a historic plunge in the…
The week kicked off with a manic Monday on Wall Street, followed by another selloff on Tuesday. The Nasdaq 100 now trades at 25 times forward earnings, down from 30 at the end of 2021. On balance, global markets have continued the week on this soft note, with the MSCI currently down 8.5% year-to-date. But…
Equity market corrections are certainly not unusual and are both more frequent and less severe than market crashes. The Nirvana, of course, is when markets move up steadily, such as the period between October 2016 and January 2018 when the S&P experienced positive returns for fifteen consecutive months, leading to a cumulative return of 36%…
Early last year, we published a news edition entitled “The year of the vaccine”. Our thesis was that the success (or not) of the vaccine rollouts would determine the timing and extent to which global economies would reopen and normalise. This would, in turn, have a profound impact on the sustainability of the equity market…
Last week’s introduction to our news flash concluded that “the Omicron variant does not warrant a change in our view that the global economy is on a road – albeit bumpy – to a full recovery”. As coronaviruses constantly mutate, they tend to lose their pathogenic intensity. Omicron seems to be following this path. Those…
Our header may appear presumptuous, but this week the Omicron fear factor that gripped financial markets last Thursday and Friday, appeared to have reversed as we initially witnessed rebounds in both equities and currencies, with subsequent market directionality driven primarily by a focus on the US Fed’s updated outlook. Last week’s global market declines, which…
