Equity markets year-to-date have been marked by volatility. In the past few weeks, markets have partially rebounded, and investors are wondering what comes next.
Bond yields have sprinted higher on ballooning inflation and hawkish comments by central banks. Yield spikes have often spelled trouble for stocks, but we believe the past is an imperfect guide in a world shaped by supply shocks.
Scarcity inflation is here. Supply shocks have created shortages of goods, energy and food that are driving up prices. We see this making inflation more persistent. It’s also spurring central banks to normalize policies faster. This is needed, in our view, as the economy no longer requires stimulus.
Last week saw lacklustre performance for many equity markets as focus turned to hawkish rhetoric from the Federal Reserve (Fed), COVID-19 concerns in China and uncertainty around the outcome of the French presidential election. In addition, the war in Ukraine continues to grind on with little or no sign of progress in peace talks.
During 2021, MeDirect Group moved forward dynamically in the implementation of its strategic roadmap and demonstrated continued resilience and ability in responding to a rapidly evolving market environment through its transformation and technology strategy.
The West is trying to wean itself off Russian energy in the wake of the tragic war in Ukraine. We see this hurting growth and increasing inflation in the short term. More supply of U.S. and other non-Russian fossil fuels will be needed to alleviate pressured consumers.
Markets seem to be looking towards a ceasefire in Ukraine. Reports over the rest of the week showed little hope of any imminent de-escalation, with the crisis appearing to deepen in some areas of the country as Russian forces appeared to regroup, especially in the south and east.
MeDirect Bank Malta has launched a “Buy Commission-Free” campaign whereby clients are not charged any brokerage fees when purchasing securities. The campaign is valid for the whole month of April.
It has now been over four weeks since Russia launched its invasion of Ukraine, and there are very few signs that the conflict will be coming to an end soon. But, it still feels like hope is a big driving factor behind relative equity market strength despite the clear headwinds.
The tragic war in Ukraine has resulted in a global energy shock. We see this increasing inflation, pressuring consumers and hurting growth, especially in Europe. The Fed has started to talk tough on inflation and has projected a large increase in rates.
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