Stocks fell last week as concerns grew about the effect the Federal Reserve’s tighter monetary policy would have on the markets.
www.ft.com/content/9c9e1211-4864-4965-a916-4a633a37bbf7

Stocks are having to deal with multiple issues at once:

1. Interest rates have been increasing. The 10-year real rate is now back to 0%, its pre-pandemic level. This has hit the beneficiaries of low real rates, such as $XLK, $TLT and $BTC .
fred.stlouisfed.org/series/DFII10

2. Inflation expectations are at risk of becoming de-anchored. The closely-watched 5y5y inflation swap rate is now 2.44% in Europe and 2.83% in the US. Both are well above the 2% inflation target. This is putting pressure on central banks to tighten policy further.
corporate.nordea.com/article/73850/eur-rates-spoiler-alert-risks-ahead

3. Russia and Ukraine seem to be moving further away from a diplomatic solution.

4. COVID lockdowns in China are intensifying, while the property market there continues to slow down.

“It is hard to find good news anywhere and I can find good reasons to be negative on almost every asset class,” says Neil Birrell, chief investment officer at Premier Miton Investors.
www.ft.com/content/b393d41f-2690-47a2-9c54-20bd146e8309

We believe there is scope for a 10% sell-off to below 4000 on the $SPX500 index as the narrative pendulum swings further towards negativity.

A sell-off would present a good buying opportunity, though, in our view. We believe the economy, particularly manufacturing, will slow down significantly this year.
corporate.nordea.com/article/73850/eur-rates-spoiler-alert-risks-ahead

But we also believe that strength in the services sector means a recession will be avoided.
www.etoro.com/news-and-analysis/in-depth-analysis/macro-insights-recession-risks-in-context/

We are keeping our positioning defensive for the time being but would increase risk by buying beaten-down cyclical stocks if a further sell-off were to occur.

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@triangulacapital -0.3%
$SWDA.L -10.3%

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