Navigating rocky markets as 2022 starts with a whimper | February 2022

 

 

Fears over rising rates, geopolitical tensions and inflation have seen a rocky start to the year for markets. However, help may be at hand, with the Chinese government set to loosen monetary policy in the face of flagging growth.

In the meantime, there has been a sharp rotation from growth areas, such as technology, into value sectors such as financials and energy. This has been bad news for the US market, but good news for the UK, which recorded its best relative monthly gain over global peers for more than 20 years.1

Challenges persist for global stock markets. Inflation remains the most immediate concern, with energy prices likely to remain elevated as environmental policies make fossil fuels more expensive by restricting supply. This will determine the direction of US interest rates over the coming months. Expect equities to be volatile as central banks grapple with these problems.

Sources: Refinitiv, Smith and Williamson

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This episode was recorded on 31/01/2022

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Podcast information:

The Pulse from Smith & Williamson

Investment Show: The impact of shifting monetary policy

Episode 30

Broadcast on Smith & Williamson Thursday 3rd February 2022

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