Market Perspectives April 2022

04 April 2022

Welcome to our latest edition of Market Perspectives, which aims to provide much-needed context and clarity, at a time when volatility and uncertainty weigh on investors’ minds.

This year’s surge in oil prices can be found in elevated inflation levels and has led to economists rushing to reassess global growth forecasts. For instance, Barclays Investment Bank now assumes global growth of 3.4% this year, down from 4.3% in January. In this month’s report, we look at what effect soaring crude costs may have on equities, bonds, and other asset classes.

Understanding the effects of oil price shocks on equities matters. Over the last 50 years, global markets typically troughed seven months after such shocks start. While energy and basic materials tend to perform well, technology usually takes the biggest hit. But the good news is that the economy is better placed to withstand such events now than it was in the 1970s.

Bonds have suffered this year as elevated inflation persists and leading central banks remain hawkish. In this context, a defensive positioning in medium-term bonds appeal most, but we’re starting to find more opportunities for yield generation.

Beyond our usual asset class and financial market analysis, you’ll also find our latest sustainability insights.

Companies are increasingly pledging to fight climate change by producing net-zero carbon emissions by 2050. But the devil is in the detail. Taking a look into the commitments made can help to unearth those businesses set to be net-zero pioneers, and well-placed to profit from the transition to a low-carbon world.

As always, we hope you enjoy the report and we thank you for entrusting us with your investments.

Jean-Damien Marie and Andre Portelli, Co-Heads of Investment, Private Bank

Insights for April

Related articles