Weekly Market View from Realm Investment Management. Week ending 3rd June 2022.
Last week, stock-markets gave back some of the previous week’s gains.
Investors are focused on the problem of inflation and whether a recession can be avoided as the US Federal Reserve takes steps to get it under control. However, US economic data released last week was better-than-expected and supportive. Friday’s jobs data beat expectations showing that 390,000 jobs were added in May and the ISM May purchasing managers index rose to 56.1, again beating expectations.
US inflation data released later this week will be closely monitored. Markets are expecting the Fed to raise rates by a further 0.5% this month and next, although there is already speculation that a further hike in September may not now happen. Federal Reserve Vice-Chair Lael Brainard said last week that financial conditions had already tightened a lot but it was too early to say whether inflation had peaked. She added that it was “very hard to see the case” for a pause in rate hikes and “we’ve still got a lot of work to do to get inflation down to our 2% target”.
Eyes are also on the European Central Bank (ECB), as inflation in the eurozone rose 8.1% year-on-year in May, another record high. It is now thought likely the ECB will raise rates from negative to positive in the near future.
Market Sentiment 3rd June 2022
U.S. Risk Barometer 3rd June 2022
Europe Risk Barometer 3rd June 2022
Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.
This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’
