While we have already written much about inflation this year, it seems appropriate to continue in this vein as the actions of central banks, and the consequences of market participants pre-empting or second-guessing their actions, have global equity markets on the brink of being classified as bear markets – defined as being down 20% from…
History shows that turning points in bear markets occur at the points of maximum pessimism where there is almost a vacuum of optimism. Although markets initially reacted well last week, as US Federal Reserve chairman Jerome Powell pushed back against incremental 0.75 percentage point rate increases (the actual hike was 0.5 bps), markets have since…
The Federal Reserve this week announced a 50 basis points increase in its rate, the first hike of this magnitude in 20 years. This move did not come as a surprise at all and was in line with many analysts’ expectations and, indeed, with the Fed’s communications. FOMC meetings are becoming a bigger event as…
We wrote in March about how the war in Ukraine could change everything. In fact, according to Professor Yuval Harari, an Israeli public intellectual and historian, what’s at stake for everyone across the globe increases as the conflict continues. More than two months into the conflict, Ukraine and Russia have not yet managed to reach…
The IMF has revised its global growth outlook for 2022 and 2023 downwards to 3.6% for both years. This is despite inflation risks falling. The question is whether we are now facing a recessionary environment. According to UBS research, there are three factors that can mitigate this risk: First, European spending firepower should limit the…
The “bullwhip effect” was coined in 1997 and refers to a phenomenon within supply chain management whereby shifts in consumer demand cause greatly exaggerated changes further up the supply chain. Inventory swings act in bigger and bigger “waves” in response to consumer demand, with the largest “waves” impacting the suppliers of raw materials – either…
There is no doubt that the onset of the conflict in the Ukraine led to increased inflationary pressures across the globe, arguably setting the scene for a deeper drawdown on global equity markets than had been experienced up to 24 February, the date of the invasion. For example, the S&P 500 was down 12.82% on…
The Russian invasion of the Ukraine late in February started against a backdrop that was already proving to be a challenge for some regional equity markets, specifically in the US. As 2022 dawned, market participants turned their collective focus to the looming benchmark policy interest rate hikes by the US Federal Reserve in response to…
According to John Mearsheimer, a respected international relations scholar in the US, law and morals and ethics matter in the international system, except when they are in direct conflict with a nation’s own strategic interest. This with reference to an article penned by Oscar van Heerden and published by the Daily Maverick on Wednesday. Van…
