Walker Crips' Market Commentary

A bounce in equity markets had been overdue, and was duly delivered, with the US technology sector leading the way. Investors were initially somewhat cheered by an American service industry survey that showed only a slight reduction in activity from the previous month, bucking the trend from other nations for much larger declines. More importantly, the minutes of the US Federal Reserve’s last meet...

It was a week in which market behaviour began to shift away from fear of interest rates rises towards fear of recession. This was most evident in a recovery in government bond markets where, at the short maturities that most clearly reflect the expected path of interest rates, a dramatic shift could be seen. In the blink of an eye, seemingly, investors have shifted from being convinced that the US...

The previous week’s rally in US government bond markets, that may have heralded a change in sentiment towards the Federal Reserve in its fight against inflation, was repeated around the world. British government bonds followed their US brethren upwards after the release of UK inflation data that showed a surprising decline in so-called core inflation, which excludes more volatile components such a...

The bad news is that stock markets slipped again last week. The good news is that things could have been much worse, with a fairly modest move down despite the US Federal Reserve raising rates by 0.75%, its biggest hike in 30 years. The Fed is following through on tough talk over the past few weeks, and Chairman Powell made it clear, repeatedly, that the Fed won’t stop hiking until it sees a clear...

Movements in capital markets are increasingly being driven by two economic factors, inflation and interest rates, that are beyond the ability of individual investors to control. While a particular company’s prospects still matter, as evidenced by the impact of recent profits warnings in the retail sector, changes in portfolio values are more likely to reflect the latest news on rising prices, the...

Skittish stock markets struggled to maintain the positive momentum of the previous week and, following a barrage of bad news, it’s beginning to look like the previous week may have been the aberration. The week started with an outsized jump in Eurozone inflation in May, to 8.1%, and the fact that the announcement of this data coincided with the announcement of the European Union’s embargo on Russi...

Having been rocked by a profit warning from retailing giant Walmart in the previous week, stockmarkets shrugged off the fear of recession and managed an impressive rally. America led the way, with the major indices there bouncing nearly 10% off their recent lows. European markets had already been outperforming but, nevertheless, enjoyed the additional tailwind. Indeed, it was a week in which just...

The week started promisingly enough, with the most hawkish comments yet from the US central bank failing to disrupt equity, bond or currency markets. In an interview with the Wall Street Journal, Federal Reserve chairman Powell said something that central bankers have not had to say for decades: that the Fed intends to raise rates until they slow economic growth, and that they are prepared to risk...

UK and continental European stockmarkets managed to bounce last week, but it was cold comfort after the declines of the last month or so. American markets could not follow suit, and weren’t helped by another shock from the monthly US inflation data. Nothing has yet appeared to alter the picture of persistent inflation and slowing economic growth. In recent weeks, economists have taken a hatchet to...

Summary: The past week saw the US Federal Reserve (Fed) do exactly as markets expected as it increased its benchmark interest rate by 50 basis points (to a range of 0.75% - 1.0%), constituting the biggest single increase in US borrowing costs since the year 2000. The Fed also announced plans to reduce its gargantuan $9 trillion balance sheet. In June, July and August, The Central Bank plans to red...

Volatility in stock markets was back to its post-pandemic peak last week, with the mighty S&P 500, the world’s largest stockmarket index by value, falling by 2.8% on Tuesday, only to rise by 2.5% on Thursday, before selling off 3.6% on Friday. So much of the value of the S&P 500 is now concentrated in a few technology behemoths that their fate determines its fate. Thursday’s rebound had mu...

A lacklustre week for stock markets was dwarfed by another wave of panic in bond markets, as the US central bank turned up the volume on its inflation-fighting rhetoric. A two-year US government bond now yields about 2.7%, and yields have only been higher than that once since before the Credit Crunch. US government bonds have now had their worst start to a year since the early 1970s. Bond markets...

Stock markets initially threatened to continue their advance, before retreating to end the week lower. The initial setback was the US Federal Reserve or, more specifically, the written minutes of a Federal Reserve meeting that took place four weeks ago. Such is the scrutiny being applied to the change in interest rates by the Fed that the market was falling even before the minutes were published,...

Stock markets largely completed their recovery from the Ukraine-war sell-off last week. However, not all markets are equal, with the very large companies comprising the S&P 500 stock market index and the FTSE 100 comfortably beating the performance of their continental European peers, and with smaller and mid-sized companies languishing everywhere. In the Far East, Japan’s Nikkei index has far...

Stock markets continued to enjoy the post-Ukraine rally last week, with notable enthusiasm for all things American and, especially, American technology stocks. Also coming back into favour are some speculative favourites, including cryptocurrencies. Recent announcements of stock splits by American technology companies have been greeted with extremely outsized responses, despite the fact that they...

Stock markets largely completed their recovery from the trauma induced by the conflict in Ukraine last week, and European markets are back to within 5-6% of their pre-war levels. This amount is approximately equal to a year’s return on an equity index, and seems reasonable given the war’s implications for energy consumption and inflation. US markets leapt ahead last week, especially the technology...

European stock markets recovered some poise during the week, rallying off their Ukraine-war lows, and moving more into line with their American peers. As concerns surrounding the conflict receded, however, fear of inflation increased, prompting bond markets to plumb new lows for the year. This latest move can be attributed partly to the war, which has unleashed a spike in commodity prices, and par...

Stock markets had their worst week since the depths of the pandemic, with European equity indices particularly hard hit. The blue-chip Euro Stoxx 50 index fell over 10% during the week, and entered official bear-market territory (meaning that a decline of at least 20% from peak to trough has now taken place). It is also now below the levels reached during a brief rally in 2015. US equities have be...

Stock markets recovered some poise during the week, but only after having fallen to new lows for the year to date in most regions. The extent of poor performance was roughly proportional to the geographical proximity to Ukraine, with the Euro Stoxx 50 blue-chip index falling 5% early in the week, before recovering to end the week down only 1.5%. The FTSE 100, which had been largely immune to infla...

The stand-off in Ukraine produced a conventional rush for safe havens last week, with bond markets benefiting across the whole spectrum from the additional demand and stock markets wobbling. Precious metals were among the few positive sectors within equity markets and gold, in particular, is now back to its highs of the past year. Traders’ screens were mostly red, however, with travel and leisure,...

Things were looking up at the beginning of the week, with the previous week’s blockbuster US employment report having given stock markets a confidence boost. By mid-week, with a bounce well and truly underway, it looked like markets might even be making an attempt to reclaim their previous highs. The mood darkened, however, after the US inflation report on Thursday, which showed that inflation had...

The action switched back from equity to bond markets last week, as a one-two punch of central bank meetings reinforced the hawkish change in monetary policies. This was then followed by a positive shock in key US employment data that sent bond yields spiralling upwards. First up was the Bank of England, which raised rates - as expected - but also tried to send a relatively dovish message, reinforc...

Enthusiasts for buying the dip were finally rewarded this week, as stock markets reclaimed some of their lost ground since the beginning of the year. The bounce was broad-based, with the technology sector, smaller-companies and cryptocurrencies all participating to varying degrees. Markets eventually overcame a wobble caused by the US Federal Reserve’s monthly press conference, at which Chairman P...

Bond market investors were, no doubt, delighted to pass the baton of extreme volatility to equity markets last week, but the theme continues to be the same: markets themselves are making the headlines, and not in a good way. The technology sector has taken a pummelling, and the Nasdaq Composite index came within a hair’s breadth of closing below its level of a year ago. All the sound and fury of t...

Once again, the excitement was in bond markets with US government bond yields making new pandemic-era highs. The action was most intense at shorter-term maturities, which are now pricing in four rate rises in the next 12 months. Coming alongside hawkish comments from US Federal Reserve governors, the moves anticipate that containing inflation will require more concerted action on rates, and sooner...