Weekly Market View from Realm Investment Management. Week ending 15th July 2022.
Corporate-earnings season kicked off in a week when the Euro fell to parity against a strong Dollar, and Wednesday’s CPI inflation data, once again, came in hotter-than-expected.
The US Federal Reserve has been raising interest rates at the fastest pace for forty years and another 0.75% hike is expected this month with some investors expecting that even a full 1% may be on the table. Interestingly though, markets are also pricing in three rate cuts next year with the Fed expected to pivot and begin another round of easing as the US economy slows rapidly.
Commodity prices have been falling recently which could take the pressure of the Fed and provide a boost for corporate profits. Investors will hope that if that happens the Fed won’t make things worse by hiking too far.
The European Commission lifted its forecast for inflation in the region and lowered its economic forecast citing the continuing negative impact of the war in Ukraine.
Data from the ONS (Office for National Statistics) showed that the economy unexpectedly grew in May raising the possibility that the UK may not contract in the second quarter.
U.S. Risk Barometer 15th July 2022
Europe Risk Barometer 15th July 2022
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