The first quarter of 2022 was jam-packed with volatility-inducing events: rising inflation, war in Ukraine, rising interest rates, sanctions on Russia, and a new COVID-19 outbreak in China.
Here’s a brief review of what happened during:
A new COVID-19 outbreak in China led to a lockdown in Shanghai. On March 28, Shanghai, China, a city of 25 million people, was locked down amid a new COVID-19 outbreak. A source cited by Reshma Kapadia of Barron’s stated:
“…concern is growing about the scars it may leave on Chinese consumers—a crucial growth engine for the struggling economy but also for a host of global companies…Consumers will be more cautious this time around. Their pandemic savings are depleting, wealth has been destroyed in equities and property and wage growth has already turned down.’”
The Shanghai Composite Index dropped by almost 10 percent during the quarter, reported Reuters.
Overall, stock markets declined during the first quarter of 2022. The MSCI All Country World Index (ACWI) measures the performance of mid-sized and large company stocks in 23 developed markets and 24 emerging markets. It reflects the performance of about 85 percent of the investable stocks across the world and finished the first quarter of 2022 -5.36 percent.
The were some regions that delivered positive returns during the period. For example, markets in some commodity-exporting countries in Latin America, Africa, and the Middle East benefitted from the supply disruptions that followed Russia’s invasion of Ukraine.
We anticipate that markets will remain volatile in the coming weeks and, possibly, months. We will continue to monitor events around the world and the ways in which they may affect markets and asset prices and we hope peace talks will conclude the war in Ukraine.
https://www.economist.com/graphic-detail/2022/04/05/russias-war-in-ukraine-has-caused-at-least-68bn-in-physical-damage (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/04-11-22_Economist_Russias%20War%20in%20Ukraine%20Has%20Caused%20at%20least%2068Bn%20in%20Physical%20Damage_4.pdf)
https://www.morningstar.com/articles/1087132/13-charts-on-the-markets-first-quarter-performance (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/04-11-22_Morningstar_13%20Charts%20on%20the%20Markets%20First-Quarter%20Performance_5.pdf)
https://www.barrons.com/articles/crude-oil-prices-russia-sanctions-51649152164?refsec=oil (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/04-11-22_Barrons_Crude%20Oil%20Prices%20Rise%20on%20Threat%20of%20New%20Russia%20Sanctions_6.pdf)
https://www.economist.com/graphic-detail/2022/04/08/russias-invasion-of-ukraine-is-causing-record-high-food-prices (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/04-11-22_Economist_Russias%20Invasion%20of%20Ukraine%20is%20Causing%20Record-High%20Food%20Prices_7.pdf)
https://www.barrons.com/articles/shanghais-covid-lockdown-spells-trouble-for-chinese-consumers-thats-bad-news-for-global-companies-51649359398?mod=hp_columnists (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/04-11-22_Barrons_Shanghais%20Covid%20Lockdown%20Spells%20Trouble%20for%20Chinese%20Consumers_11.pdf)
https://www.msci.com/end-of-day-data-search (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/04-11-22_MSCI_Emerging%20Markets%20Standard%20(Price)%20as%20of%20Mar%2031%202022_14.pdf)
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