Photo by Josh Appel
Macro-guru or astute stock picker alike – investors will perhaps never forget this quarter.
Crushed is an understatement for the majority of consensus trades coming in 2022, such as long value stocks, yield curve steepens, and purchasing euros. The world has seen the most distressing volatility in years.
The first three months of the year have stoked the most substantial commodities upturn after World War I and the most rapid upswing in global interest rates in decades.
However, with the dust clearing up in the first quarter, stock markets are steadily locating the right track again. US stocks are back to within 5% of the top-of-the-range January 4 strike.
A global stock index will conclude the quarter at a lower level of approximately 4%, its poorest performance after the pandemic hit two years previously; however, well over the 14% year-to-date fall just two weeks previously.
Meanwhile, bonds and currencies have fared more adversely. For example, a Bank of America US Treasuries index is on its poorest quarterly performance in 25 years.
On the other hand, the Japanese yen has dropped a tremendous 6% over the last three months, a rate of dropping only countered by the British pound following the Brexit referendum vote. Volatility has skyrocketed among asset brackets.
However, looking at the 30,000 feet perspective over the quarterly market performance, a few extended-term trends are coming into view.
Russia’s attack on Ukraine denotes that the global supply chain will stay strained for the expected time ahead, and global lawmakers will have difficulty regulating pervasive inflation without smothering growth.
At the moment, markets are trying to stay hopeful. The future of the US and European stocks are soaring, and oil prices are further down on hints the Biden administration is planning a massive release of crude oil from US reserves to counter inflation.
But Chinese stocks downturn as product data mirrors the harmful effects of resumed lockdowns in technology and factory hubs, severely affecting Asian markets. Treasuries serve as additional price gains; on the other hand, a part of the curve has withdrawn a short inversion that caused worries about an approaching economic decline.
Opinions expressed by Influencer Daily contributors are their own.
