Quarter in Review Q4 2021

Key themes

  • Global equities recovered from the drawdown experienced late in the third quarter and ended the year near record highs.
  • Market fears around the Omicron variant eased through December.
  • However, persistently high inflation readings and more hawkish stances from central banks gave rise to uncertainty.

Markets snapshot

  •  The MSCI AC World equity index rose 7.1% (8.8% in €).
  • The US rose 10.1% (12.2% in €), as a strong third quarter earnings season and a rebound in growth to a 7% annualised rate offset a more hawkish Fed
  • Europe gained 7.0% (7.8% in €) as growth remained strong despite the renewed rise in Covid case numbers
  • Emerging markets were down -0.8% (up +0.6% in €) and were negatively impacted by a stronger US dollar and tighter US monetary policy.
  • The ICE BofA Merrill Lynch Eurozone > 5-year sovereign bond benchmark fell -0.5% over the quarter, with the German 10-year yield rising 2bps to -0.18%. Yields were volatile, initially falling as the European Central Bank pushed back against market expectations of a rate rise in 2022.
  • The euro fell to 1.1370 against the US dollar; the Fed announced asset purchases will end in March and guided to three interest rate hikes during 2022.
  • Commodities rose 1.5% (3.4% in €), but were volatile through the quarter. At the same time, West Texas Intermediate oil rose 0.2%. European gas prices were extremely volatile, falling -21.5% over the quarter, but having risen over 115% at their peak.
  • Gold rose 4.0%, benefitting from lower US real yields.



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Each quarter, Lenny McLoughlin, Chief Investment Strategist sifts through market noise to pinpoint the key themes that have influenced markets – and impacted your investments. Lenny also shares his insights on the forces shaping markets in the short-to-medium term.

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