Monthly financial markets outlook | June 2022

Markets continued to be volatile in May with investors now more concerned about potential spill over of financial risks to the real economy. Grim earnings reports and guidance from some consumer-related companies in the US alongside a slump in business and consumer confidence raised recession and stagflation concerns. Locally, political risks were also elevated following corruption allegations levelled against the president. However, despite a negative backdrop, major asset classes closed almost unchanged in May, thanks to the relief rally towards the end of the month.

  • 27th June 2022
  • By 27four Investment Managers
  • Featured

Monthly financial markets outlook | May 2022

The painful retrenchment across major asset classes which commenced at the beginning of the year accelerated in April with some segments giving up all their post-Covid gains. Fears of entrenched inflation, tightening financial conditions, the Ukraine war and slowing growth were once again the dominant themes. The Chinese Communist Party’s (CPP) decision to seal off some Chinese provinces with key industrial hubs in its attempt to combat rising Covid-19 infections also sent shivers across the market, with investors worrying about a potential dent on an already fragile global growth outlook. Correlations between risk assets and safe assets remained elevated which means that even a well-balanced portfolio cratered this month.

Monthly financial markets outlook | April 2022

Financial markets experienced a sharp pullback during the first quarter as inflation, recession and the spectre for higher policy interest rates took centre stage. The Russia and Ukraine friction in late February somewhat exacerbated risks faced by investors.

Monthly financial markets outlook | February 2022

Global risk assets bounced back strongly in October with the MSCI ACWI gaining 5.1% led by US large caps (+7%) and developed markets growth stocks (+6.7%) in dollars. Tech stocks that had come under pressure on news of policy normalisation performed exceptionally well buoyed by strong third-quarter earnings. More than 83% of tech companies that had reported their earnings at the end of October outperformed expectations.

Monthly financial markets outlook | November 2021

Global risk assets bounced back strongly in October with the MSCI ACWI gaining 5.1% led by US large caps (+7%) and developed markets growth stocks (+6.7%) in dollars. Tech stocks that had come under pressure on news of policy normalisation performed exceptionally well buoyed by strong third-quarter earnings. More than 83% of tech companies that had reported their earnings at the end of October outperformed expectations.

Monthly financial markets outlook | October 2021

All major global asset classes ended in the green in July, but the headline numbers do not tell the full story about the market dynamics that led to that outcome. The performance of global equities was very narrow reminiscent of 2020. The S&P 500 which houses the US’s largest companies touched a new all-time high in July supported by above-average earnings deliveries by most of its constituents. European equities were up 1.8% on the back of the reopening momentum as most governments in the bloc ease lockdown restrictions. The fixed income segment was driven by inflation linkers and investment-grade bonds. Global inflation-linked bonds jumped 4%, followed by global investment-grade bonds and US high yields which delivered 1.3% and 0.4% for the month.

Monthly financial markets outlook | September 2021

All major global asset classes ended in the green in July, but the headline numbers do not tell the full story about the market dynamics that led to that outcome. The performance of global equities was very narrow reminiscent of 2020. The S&P 500 which houses the US’s largest companies touched a new all-time high in July supported by above-average earnings deliveries by most of its constituents. European equities were up 1.8% on the back of the reopening momentum as most governments in the bloc ease lockdown restrictions. The fixed income segment was driven by inflation linkers and investment-grade bonds. Global inflation-linked bonds jumped 4%, followed by global investment-grade bonds and US high yields which delivered 1.3% and 0.4% for the month.

Monthly financial markets outlook | August 2021

All major global asset classes ended in the green in July, but the headline numbers do not tell the full story about the market dynamics that led to that outcome. The performance of global equities was very narrow reminiscent of 2020. The S&P 500 which houses the US’s largest companies touched a new all-time high in July supported by above-average earnings deliveries by most of its constituents. European equities were up 1.8% on the back of the reopening momentum as most governments in the bloc ease lockdown restrictions. The fixed income segment was driven by inflation linkers and investment-grade bonds. Global inflation-linked bonds jumped 4%, followed by global investment-grade bonds and US high yields which delivered 1.3% and 0.4% for the month.

Monthly financial markets outlook | June 2021

All major local asset classes delivered decent returns in April. The JSE All Bond Index bounced back on easing global inflation concerns on the back of an unequivocal commitment to defend the low-interest rate regime from the US Federal Reserve Bank (Fed). The Fed reassured markets that the inflation prints and employment numbers are still far from its targets.

Top 5 controversial AGM resolutions for May 2021

We exercise our voting rights on behalf of our clients diligently because we believe it is one of the most effective ways of entrenching corporate citizenry. We therefore review the voting issues per resolution at each annual general meeting and vote in line with our policy. In March, we voted on 90 resolutions of which 59 were in favour and 31 were against.