The Fed’s hawkish attitude towards interest rate hikes has slowed down, which has eased the stock market investment sentiment. According to EPFR statistics quoted by Bank of America Merrill Lynch, the weekly net inflow of US stocks was US$21.758 billion, the highest in the world, and was significantly improved from the previous value. It is recommended to follow up It is necessary to pay attention to the impact of six major trends on the market, including the geopolitical situation in Ukraine and Russia, supply chain conditions, inflation expectations, central bank monetary policy, U.S. government bond yields and dollar trends.
Allianz Investment Trust said that the U.S. employment data was stable, and the minutes of the Federal Reserve meeting also showed that there is no intention to adopt a more aggressive pace of interest rate hikes. Some risky assets, including the stock market, ushered in buying orders. All contributed more than 6% increase, of which Philadelphia Semiconductor rose 8.12% the strongest, echoing with the significantly improved net inflow of funds, and the volume and price grew synchronously.
Allianz Four Seasons Growth Portfolio Fund Manager Zhuang Kailun said that with the ongoing geopolitical events in Ukraine and Russia and inflation expectations still high, the global central bank has accelerated the pace of interest rate normalization. The impact of monetary policy tightening on the economy has been reflected in advance, resulting in sharp fluctuations in financial markets. Major global asset classes including government bonds, credit bonds and stock markets have all experienced headwinds since the beginning of the year. The MSCI World Index has also mostly declined during the same period except for energy. .
However, it should be noted that the global inflation pressure in the market in the first half of the year is still high, and under the influence of the turmoil in Ukraine and Russia, the global economy has a tendency to slow down, but it is expected that the inflation pressure is expected to ease in the second half of the year. The rate of interest rate hikes by the central bank is expected to slow down, and with the unblocking of various countries, it may be beneficial to the increase in people’s consumption.
DWS said the threat to stocks this year has mostly come from bond movements. U.S. inflation-adjusted 10-year Treasury yields have risen to 0.2 percent from -1.1 percent, which is expected to weigh on stocks.
DWS said that future corporate profits are expected to be eroded by higher interest rates, which is especially bad for growth companies, but the vote provides investors with some ability to fight inflation, but valuation multiples have been revised down significantly from recent highs. Expect the stock market to recover after another drop in volatility.