A jubilant subject
by Robert White, CFA
While we generally do our best to avoid home bias here at Momentum, I propose to break that rule today in recognition of last week’s Platinum Jubilee celebrations. Whatever your views on the monarchy, no one can deny that to serve one’s country as Head of State for 70 years is truly an impressive feat. Since her ascension to the throne on February 6th 1952, Queen Elizabeth II has lived through seven recessions, met 13 US Presidents and outlasted 14 UK Prime Ministers.
Market Snapshot
- Global equities fell 0.8% last week
- Russia’s war with Ukraine passed the 100th day
- Brent crude rose 0.2% to $119.72 a barrel
- Gold returned -0.1% to $1851.19 per ounce.
Upside Down
by Gary Moglione
In our industry there is often a level of expectation placed upon fund managers to fully understand everything that is going on and, worse still, to have Sage like skills in predicting the future. This pressure is heightened should the unfortunate individual concerned be in the public eye or rolled out in front of the media to give comment on events. Of course, the investment industry is not alone in this.
Market Snapshot
- Global equities gained 5.6% last week
- Most global markets saw positive gains following declines in recent weeks
- Brent crude rose 0.1% last week to $119.4 a barrel
- Gold rose by 0.4% to $1853.7 per ounce.
Definitely Maybe
by Richard Parfect, CFA
In our industry there is often a level of expectation placed upon fund managers to fully understand everything that is going on and, worse still, to have Sage like skills in predicting the future. This pressure is heightened should the unfortunate individual concerned be in the public eye or rolled out in front of the media to give comment on events. Of course, the investment industry is not alone in this.
Market Snapshot
- Global equities fell 1.6% last week
- The S&P has seen seven consecutive weekly declines for the first time since the dotcom bubble burst in 2001
- Brent crude rose 0.9% over the week to $112.6 a barrel
- Gold returned 1.9% to $1846.5 per ounce.
Venturing overseas
by Andrew Hardy, CFA
With the skies and borders mostly open for international travel again, I’ve been visiting our parent company’s home market of South Africa this past week, a welcome opportunity to catch up with colleagues and clients in person. The hot topic has been investing overseas, following the local central bank’s recent relaxation of offshore investment limits; now investors can take up to 45% overseas. One of the many questions this brings into focus – for investors there but also around the world – is the risks that come with having so much of a portfolio invested overseas, and how best to manage them
Market Snapshot
- Global equities declined 2.1% last week
- Goldman Sachs have cut US growth forecasts.
- Brent crude fell 0.7% to $111.5 a barrel
- Gold fell by 3.8% to $1811.8 per ounce.
The war in Ukraine, and widespread evidence of Russia’s depravity as its advance falters, continues to cast a dark shadow over the world. With Russia’s invasion now into its third month, and both sides increasingly intransigent with no signs of a negotiated end in sight, the probability of a long, attritional war is rising. The longer the war drags on, the greater the risk of longer lasting economic damage, transmitted primarily through global energy and agricultural commodity prices. Yet in April it was deepening worries about economic imbalances, which had been developing long before the invasion, that drove financial markets – ultra-loose monetary and fiscal stimulus adding fuel to the fire of post-pandemic release of pent-up demand, triggering excess demand in supply-constrained markets, in turn leading to high and persistent inflation.
Central banks get serious
by Robert White, CFA
After the first 50bps interest rate rise by the Fed in over 20 years (with more to come) and the announcement of quantitative tightening starting in June, there is no doubt that the Fed is getting serious about containing inflation. Inflation data in April continued the pattern of the past year, generally exceeding expectations, with price rises becoming more broadly based and accelerating to multi-decade highs in the US and Europe.
Strong demand, supply chain shortages, and war in Ukraine have combined to push producer price inflation (PPI) in the US up by 11.2% in the year to March
Market Snapshot
- Global equities fell 1.1% last week.
- Most indices saw declines after a volatile week with interest rates and inflation fears weighing on sentiment.
- Brent crude rose 2.8% to $112.4 a barrel following an EU proposal to ban Russian imports.
- Gold fell 0.7% to $1883.8 per ounce
Investing goals
by Stephen Nguyen, CFA
As an avid sports fan, I have always enjoyed being involved in all things sports related. Having participated in various team-based and individual sports throughout my life, I of course enjoy watching a variety of different sports, be it golf, tennis, or football. Sporting events often bring people together and teach us the importance of values and hard work. If we look at successful sports teams or individuals, there are lots of similarities that can be drawn between them and professional investors
Market Snapshot
- Global equities declined 2.6% last week
- Lockdown restrictions widen in China as concerns escalate in the capital Beijing
- Brent crude fell 4.5% to 1067 a barrel amid concerns about China’s demand and after Libya said it would resume output at its closed fields in the coming days
- Gold fell by 0.2% to $1,931.6 per ounce
The benign conditions enjoyed by financial markets in the 18 months since the depths of the pandemic were well and truly shattered in the first quarter of 2022, driven by two powerful shocks, both largely unexpected and each with huge consequences globally: Russia’s invasion of Ukraine and the Fed’s very sharp hawkish shift in policy. The immediate consequences of the war produced surges in energy prices and further disruptions to key commodity markets and supply chains, adding to the damage inflicted by the pandemic. But away from commodities, there were few markets that could withstand the heightened risk of a significant slowdown in global growth and much higher interest rates than anticipated only a few months earlier.
Whatever it takes, China
by Lorenzo La Posta, CFA
This is not the first time I have written about Chinese equities and loyal readers will remember last August, when the media were calling it an “uninvestable” market, we were finding pockets of value and interesting opportunities. This year, a new wind is blowing under the Red Dragon’s wings.
But let’s rewind the tape and press play on February 2021. Valentine’s Day had just gone, the stock market was at a peak, but no one knew what was coming
Market Snapshot
- Global equities fell -1.4% last week
- President Macron is set to face far-right rival Marine Le Pen in the second and final stage of the French presidential election in two weeks’ time
- Brent crude fell -1.5% over the week to $102.8 a barrel
- Gold returned +1.1% to $1947.5 per ounce
Jordy Shore
by Alex Harvey, CFA
Covid travel restrictions have now finally been lifted for passengers arriving in the UK. I’ve been fortunate to travel abroad in recent months including a trip to Jordan, with its rich cultural heritage spanning ancient civilisations and sites sacred to Christianity, Judaism and Islam. One regional constant over the millennia has been the Dead Sea; the world’s deepest hypersaline lake. Its shores emerge from a depth of over 300m to mark the lowest land elevation on our planet at 430 metres below sea level
Market Snapshot
- Global equities increased by +0.3% last week.
- Russian and Ukrainian negotiators will resume remote talks today.
- Brent crude decreased by -13.5% to $104.39 a barrel on plans for a release of US reserves.
- Gold decreased by -1.7% to $1925.68 per ounce
