Insights

Highlights from the week of May 6 – May 12, 2022.

Volatility pummeled stock prices as U.S. markets fell for a sixth straight week. Investors struggled with the Fed-led hawkish shift of global monetary policy, persistently high inflation and macroeconomic overhangs from China’s Covid lockdowns.

As investors grapple with a new era of macroeconomic uncertainty, liquidity is king in the near term.

In an extremely volatile week, U.S. stocks ultimately retreated, as investors digested comments from the Federal Reserve and reacted to the possibility of slower economic growth as a result of the Fed’s shift towards more hawkish monetary policy.

Following the bond market’s recent beating, term yields have already priced in aggressive Fed rate hikes, positioning core bonds to effectively diversify credit risk.

Global stocks lurched lower for the fourth straight week, ending a brutal month marked by concerns of rising interest rates and increasing headwinds from supply disruptions, China’s Covid lockdowns and the Russia–Ukraine war.

An effective factor investing strategy should be both contextual, that is, able to take into account differences across business segments, and adaptable as markets change over time.

January 1, 2022 marked a significant milestone in the transition from LIBOR to alternative reference rates. 

U.S. stocks retreated, and volatility intensified, as investors digested 1Q22 earnings reports and braced for tighter monetary policy. The global growth outlook weakened on slowdown in China and inflation aggravated by the war in Ukraine.