Q2 2022 Global Markets Review & Outlook

Inside, you will find a summary of market activity and our market outlook.

• Continued Negative Volatility is Not a Foregone Conclusion: Global markets have likely priced in well-known fears including a mild recession, which is far from certain, in our view. Meanwhile, positive economic factors are largely ignored.
• Investor Sentiment Supports an Unexpected Recovery: Depressed sentiment, driven by concerns on inflation, global monetary policy, China’s lockdowns and a variety of other factors has significantly lowered investor expectations, increasing the likelihood that markets see 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.