Imperium Capital Publication

Global Matters Weekly – 28 November 2022

Has gold lost its shine?

by Stephen Nguyen, CFA — Portfolio Strategist

— Historically, gold has proven its ability to preserve its purchasing power when compared to fiat money as it cannot be devalued by central banks

As we approach the end of 2022, it is worth reflecting on asset class returns this year. Global equities and bonds have both suffered significant declines and as a result the traditional balanced portfolio, anchored by these two asset classes, has struggled. Risk assets have had a torrid time due to a combination of factors including bleak economic and earnings outlooks, inflation concerns and heightened geopolitical tensions, which have all weighed on investor sentiment. Surprisingly, gold which has traditionally been deemed as a ’safe haven’ asset has also disappointed this year. Gold is often thought of as a hedge during market downturns and in an inflationary environment, so why has it struggled this year? And does it still warrant a place in investors’ portfolios.

Market Snapshot

    • Global equities rallied 1.7% on the week
    • China locked down one-fifth of the country due to a COVID-19 outbreak
    • Brent crude lost 4.6% on the week, down to $83.6 a barrel
    • Gold returned 0.2% on the week to trade at $1754.9 an ounce

Global Matters Weekly – 21 November 2022

The World Cup effect

by Gary Moglione — Portfolio Manager

— If the S&P 500 declines over the next month you can be confident that the subconscious actions of billions of heartbroken football fans will be partly to blame

As a keen student of behavioural investing, I love reading articles on how human behaviour is influenced by emotion and how this translates to stock market movements. If only there was an event that stirred up extreme emotions that the majority of the world will participate in. It just so happens that the FIFA World Cup is here, and according to audience data around 3.6 billion people watch the tournament on television.

Market Snapshot

    • Global equities rose 6.7% last week
    • Last week saw US midterm elections, key developments for Ukrainian forces, and a below-expectations Consumer Price Inflation (CPI) report that gave the market signs of a potential Federal Reserve (Fed) pivot
    • Brent crude fell by 2.6% over the week to $96.0 a barrel
    • Gold rose by 5.3% to $1771.2 per ounce

Viewpoint – October 2022

After the sharp falls in September, there was some respite for investors in October, with a strong rally in equity markets. Led by the US, +8.1%, the MSCI World Index of developed markets returned 7.2% in the month, recovering all the ground lost in Q3.

Global Matters Weekly – 07 November 2022

Yet another update on China

by Lorenzo La Posta, CFA — Portfolio Manager

— China is facing a different set of issues that still have global consequences

For some reason, any time it’s my turn to write our weekly Global Matters blog, there is something happening in China worth writing about. Or perhaps, it is just my colleagues deliberately leaving me with the honour of updating our readers on the latest developments within the Chinese walls (pun intended). Luckily, these days we are not short of significant news and while the west is struggling with rising rates and elevated inflation, China is facing a different set of issues that still have global consequences.

Market Snapshot

  • Global equities fell 2.1% last week
  • Early voting in the US midterm elections has begun, with Republicans expected to take control of the house and gain a slim minority in the Senate
  • Brent crude rose by 2.9% over the week to $98.6 a barrel
  • Gold rose by 2.3% to $1681.9 per ounce

Global Matters Weekly – 31 October 2022

Will the strong dollar continue to spook markets?

by Robert White, CFA — Portfolio Manager

— At times such as this it is important to remember that the global economy is cyclical

We are living in a dollar-dominated world, a fact most famously captured by John Connally, President Nixon’s Treasury Secretary, who once told a group of global finance ministers “the dollar is our currency, but it’s your problem”. Students of economic history will be aware of the disruption that a strong US dollar can cause, however, at times such as this it is important to remember that the global economy is cyclical, and such periods eventually do pass.

Market Snapshot

  • Global equities returned 4% last week
  • Developed markets saw positive returns whilst emerging markets were a mixed picture with China notably seeing a large decline
  • Brent crude oil rose 2.4% last week to $95.7 a barrel
  • Gold fell 0.8% last week to $1644.9 per ounce