Weekly Market View from Realm Investment Management. Week ending 29th July 2022.
Stock-markets were higher in a week when the International Monetary Fund (IMF) downgraded its global growth forecast. US Second-quarter earnings continue to roll out and Apple, Amazon and Alphabet posted better-than-expected results. More disappointingly, US GDP shrank by 0.9% on an annualised basis. This was the second consecutive quarter of contraction and technically puts the US economy in recession.
As expected, the US Federal Reserve raised short term interest rates on Wednesday by 0.75% with Chairman Jerome Powell surprising markets with the announcement that future policy will be determined on a meeting-by-meeting approach and be dependent on current data – in other words no more forward guidance from the Fed. Markets responded in a very positive fashion but this may well mean a further period of high volatility, especially if data does not match expectations.
Eurozone inflation reached a new record high but European equities were up last week helped by data showing that eurozone GDP increased by 0.7% in the second quarter, much better than expected.
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