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Institutional Investing / Macro Insights
Global Markets Review & Outlook Q1 2022
Inside, you will find a summary of market activity and our market outlook.
After hitting a 4 January high, global markets fell into this bull market’s first correction as investors feared rising interest rates, inflation and Vladimir Putin’s vile Ukrainian invasion. At its 8 March low, the MSCI ACWI Index was down -13.4% before rallying to put full quarter returns at -5.4%. Despite the volatility, we still believe 2022 should be good for equities, with Tech and growth leading.
- Early Year Volatility Appears to be a Classic Correction: Geopolitical uncertainty drove a sharp, early year decline in global markets. Despite the humanitarian tragedy, the scope of the conflict seems unlikely to derail the global economy or global equity markets.
- Increased Investor Pessimism: Depressed sentiment, driven primarily by Russia’s invasion of Ukraine and concerns on inflation, has significantly lowered investor expectations increasing the likelihood that markets realize a better-than-expected outcome.
- Global Markets Typically Reward US Political Gridlock: The incumbent party routinely loses power during the midterm year, reducing political uncertainty and the likelihood of extreme legislation. Increased gridlock likely acts as a tailwind for global markets in the back half of the year.
