Global Market Insights

Investors no longer "buy the dip"; Why oil prices remain high despite higher supply from OPEC

Real Estate sales at their lowest since 2020, and Australia experienced threats of blackouts amid failures in the energy market

The U.S. Fed raised rates again this week by 0.75%, and the ECB has also confirmed a rate hike in July.

The World Bank's Global Prospects Report re-iterates the challenges facing the global economy...

The U.S. Market has slightly recovered from its selloff last week, with the S&P 500 and Nasdaq on track to snap their 7-week losing streaks. Analysts however, believe that the stock market's rally in the last few days have been mainly fuelled by short-term optimism, with the overall trend still pointing towards a slowing economy and rising inflation.

Global equity markets continued their recovery last week, with countries like India, Hong Kong and Japan all rising over 3.0%. The S&P 500 index posted a second weekly gain after declining for seven consecutive weeks. The consumer discretionary and technology sectors which have performed the worst so far this year led the way higher.

The Consumer Staples sector came under pressure after several companies reported earnings that were negatively affected by inflation. China reported lower than expected industrial output and retail sales as Covid lockdowns took their toll on the economy.

So far, Q2 2022 is shaping to be a quarter where positive weeks are a rarity for market indexes. Even though the US Consumer Price Index printed 8.3% for April which is down from the 8.5% recorded in March, it's too early to say if inflation has peaked.

Over the last week, interest rates were the main focus of many markets as several central banks announced hikes to their benchmark interest rates. Every central bank attributed the rises to tackling the significant inflation affecting their economies and normalizing their respective monetary policies.

US stocks fell 3.19% last week after several notable companies delivered either disappointing results or lowered their guidance for the second quarter. Leading the downside was the consumer discretionary sector which was dragged down by its largest two components, Amazon ( NASDAQ: AMZN ) and Tesla ( NASDAQ:TSLA ). The S&P 500 index is now 14% below its highs, while the Nasdaq is down 23% and technically in a bear market.

While the majority of the U.S. market has been trading sideways for most of the week, some notable names experienced significant share price declines. Investors are still trying to estimate the effects of inflation as uncertainty increases across the board, and some companies' latest earnings reports are disappointing investors.

The U.S. Market finished 1.85% lower last week, as tech and telecom stocks took the brunt of the fall while energy stocks extended their gains by 1.1% for a total of 63% return from a year ago. While tech stocks have lost 3.5% over the last 12 months, the telecom and consumer discretionary stocks are the worst performers with both industries falling about 18% for the period.