The Omnis Investment Club podcast is now out - this week Rohit Vaswani, Client Portfolio Manager interviews Colin Gellatly, Deputy Chief Investment Officer, on the market developments from the beginning of 2022
In another volatile week in markets, the focus remains on how central banks plan on taming inflation and the impact this could have as economic growth around the world continues to slow. Last week, both the US and UK central banks raised its interest rates. China’s zero-tolerance to Covid shows signs of impact on the Chinese economy, and the associated supply chain disruptions are having repercussions globally.
It was a challenging week for markets across the world with many different factors affecting sentiment. Covid-related lockdowns in China has led investors to worry about the economic fallout China and supply chain consequences globally. In Europe, Macron’s victory provides some continuity in France and in the UK, the latest economic data reinforced a picture of stuttering economic growth.
It continues to be a somewhat uncertain time for markets as fears over higher inflation and Russia’s invasion of Ukraine dominate, whilst at the same time much of the world continues to transition towards slowly learning to live with COVID-19.
Conflict in Ukraine continues to dominate the headlines. Financial markets remain exceptionally sensitive to any hints of diplomatic progress, with sentiment shifting by the hour. Meanwhile, investors must keep a weather eye on the interplay between economic growth, inflation and interest rates.
It was generally a positive week in markets across the world, but it is obvious that risks remain across particularly with the ongoing conflict in Ukraine, rising inflation and the prospect of central banks raising interest rates aggressively. Russia’s stock markets partially reopened in a shortened and volatile trading session on Thursday, as the country’s invasion of Ukraine reached the one-month mark.
It was generally a positive week in markets across the world – with China the only major market to register losses, though we did see a turnaround later in the week. This week is a clear example of what we mean when we talk about volatility – volatility means you can get big swings either way in markets. Last week Omnis published a video that looks at why it’s important to stay calm when markets become volatile.
Events in Ukraine continued to dominate headlines, demanding attention from all, investors included. From a market perspective, Europe’s decision not to follow the US in embargoing Russian oil and gas was critical to developments over the week, as it has removed some of the worst scenarios for European the economic growth outlook.
On yet another volatile week, markets across the world were sent tumbling down as Russia’s attacks on Ukraine continue. European and UK stocks were the worst impacted during the week. The West continues to take further action against Russia, whilst Ukraine and Russia continue to negotiate. Please bear in mind that this update was written on 6 March 2022 and was correct at the time of publishing.