Walker Crips' Market Commentary

Volatility was the name of the game over the festive season, with both stock and bond markets on roller coaster journeys. In truth, some drama is probably to be expected given the size of the upward moves in asset prices since the pandemic started. Stock markets in particular had been unexpectedly calm given a quadrupling of the rate of inflation, a crisis in the Chinese property market, and conti...

Hopes for a quiet end to the year for equity markets were upended by an accumulation of negatives that put an end to the post-Omicron resurgence. The culprits included Omicron itself, central banks plus a senator from West Virginia. The week started on a sour note when Sinovac, the Chinese Covid vaccine, was found to be relatively ineffective against Omicron – a result that has been reinforced by...

Stock markets completed a fairly solid rebound from the initial Omicron sell-off, but it’s hard to pay much attention to recent performance with so much uncertainty ahead. Omicron is so infectious that, by the end of the next week, its likely trajectory in some countries should be fairly well-established. Although Omicron cases may be milder than previous variants on average, hospitals may still b...

Markets were pulled from pillar to post as the forces of Covid and inflation gave battle to investor enthusiasm for buying the dips. Federal Reserve Chairman Powell tempted fate early in the week by announcing an acceleration in the Fed's plan to wind down its $120 billion-a-month asset purchases, when investors were expecting his tone to have softened in the face of the Omicron variant. In the sp...

Stock market volumes were already thin when news emerged of the Omicron variant, on account of the Thanksgiving holiday in America, exacerbating the sell-off and causing the worst daily decline in more than a year. The European blue-chip Euro Stoxx 50 index fell back to earth with a thud, falling 4% in a day, though the real wonder was how it had kept rising at all given recent European Covid stat...

Following hot on the heels of last week’s rampant inflation data, US Federal Reserve governors were queuing up to signal a faster withdrawal from the Fed’s $120 billion a month bond-buying programme. The constant drumbeat from one governor after another, including the Fed’s vice-chairman, took a little of the shine off US stocks but ensures that no investor will be surprised when the news is forma...

Bond markets remained in a feverish state last week, after inflation data again suggested that central bankers are wrong about the risk of rising inflation. US inflation rose to 6.2% in October, its highest level in 30 years. One has to go back to the inflationary era of the 1970s and early 1980s to find a period when inflation was consistently above its current levels. With the prices of cars, re...

It has become quite common this year for stock markets to reach new all-time highs, and to do so without significant corrections along the way. This pattern was very much in evidence last week, as equities continued their amazing streak following October’s blip. The S&P 500 index rose to an all-time high for the seventh day in a row, and has broken so many records for undiluted optimism this y...

Having been a seismic event in capital markets, we should not be surprised that the pandemic continues to deliver aftershocks. It was the turn of bond markets last week, with gut-wrenching rises in interest rate expectations all around the world. Such was the unstoppable momentum that, at one point, investors were able to observe - in real time - the President of the European Central Bank explaini...

Investors continued to look on the bright side last week but, with persistent inflation becoming an inconvenient truth, it's more the case that every silver lining is now accompanied by a cloud. A new all-time high for the US stock market was only momentarily punctured after the US central bank's Chairman Powell admitted he had been wrong about inflation. "The risks are clearly now to longer and m...

Holding two completely incompatible ideas in your mind at the same time has become essential for investors since the pandemic began. It can’t be a good thing that 4.5 million people have died of Covid worldwide but, at the same time, it’s hard to argue that it’s not good to see global stock market valuations up by $30 trillion over the same period. And while it’s been wonderful for investors to ha...

It was a dismal week for forecasts of economic growth as investors grappled with the new reality that, just as governments are reducing Covid-related support for households, their purchasing power is also being squeezed by the surge in inflation. There is a hint of stagflation in the air, and it doesn’t help that the post- lockdown rebound in consumer spending had already failed to meet expectatio...

The credibility of central bankers took another knock last week, as surging costs in the energy sector not only increased estimates for peak inflation, but also prolonged the peaks themselves. It was always the case that the post-lockdown economic rebound would be accompanied by growing pains, but now the growth impetus is fading and the growing pains are taking centre stage. Stocks featured: Daim...

Having wobbled the previous week, equities climbed the proverbial “wall of worry”, shrugging off poor economic data, tighter monetary policy and further Chinese discomfort in order to recapture lost ground. European surveys of business activity disappointed expectations, confirming that the post-lockdown boom is over. Stocks featured: Evergrande, Google, Nike, Sunac China Holdings, Tesla, Universa...