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.

Latest

Insights

Market Pulse

Quarter in Review Q4 2021

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.

Read more Download

Insights

Latest Weekly Market Review

ILIM Weekly Market Review - Week 1 2022

Each week, our Retail Investment Manager, Cian O'Mahony, looks at the main stories in the Irish and global investment markets.

Read more Download
See all insights