Bassanese Bites: Laugh or cry? – June 27 2022
Week in review
A feisty 6.4% rebound in the S&P 500 was the major market highlight of the past week, supported by declining bond yields and commodity prices.
With aggressive interest rate hikes slowly but surely starting to take the edge off global growth, equity investors are unsure whether to laugh or cry. Last week, they were trying to find comfort in the hope that slowing growth may mean central banks need not be too aggressive and a hard landing can be avoided. Signs of softening in some US growth indicators, along with some tempering in consumer and financial market inflation expectations are helping in this regard. Oil and iron-ore prices have dropped over 10% in the past two weeks, and the expected peak in US and Australian policy rates has been revised down somewhat.
