IGI Logo

Below is Daily Global Market Update 14 June 2022 By Asheesh Chanda, Kristal.AI

“Monday saw a continuation of the brutal melt down across multiple asset classes after Friday's release of the US CPI numbers. The Invesco NASDAQ100 ETF QQQ posted a loss of -4.65% on the day, 2yr and 3yr yields continued to rise at a record pace and yield curves in US treasuries started to invert again. Markets are now pricing in a more aggressive Fed this week, with 50bp an almost certainty, and a 30% chance of even a 75bp hike. Futures in the morning session in Asia are bouncing back a little, but it is too early to say whether we have reached a bottom here. All sectors were in the red, pointing to broad based liquidation. Bloomberg Media states that around $ 1.3Trillion in market cap have been wiped out since the rout in stocks started last week.

Corporate credit spreads widened in line with deteriorating risk sentiment and ahead of fears of an upcoming recession. The Markit CDX US IG CDS Index reached a high of 100bp yesterday, its highest since May 2020.

Our advisory team and IC remains cautious at current levels. We reiterate the call, that for long term oriented investors gradual accumulation into weakness is probably the best strategy here. As our advisory note stated, in a 20-30year investment journey, one can expect to see at least 4-5 bear markets in that time, and right now we are fully in one.

Next big support levels in the S&P500 are at around the 3,650 level, and 10,600 in the Nasdaq 100.

We might have entered now a rare phase, where a more hawkish Fed might even be supportive for the market, as it would change perception that the central bank is ready to take full resolve to fight inflation aggressively. But challenges for the market remain.

In our managed strategies we maintain a view towards adding value stocks into weakness, while maintaining an underweight on growth stocks in the current environment.

It is important to keep the long term investment targets in mind, even in times of short term turmoil. Please reach out to your RM or advisor should you have any questions regarding your portfolio!”

Above views are of the author and not of the website kindly read disclaimer