Not so bad? Almost good

December has begun on a positive footing for investors. A renewed pivot in sentiment, with market participants choosing to focus on the positives rather than the negatives, has brought the third extended market upswing of 2022, with various equity markets now trading above bear market territory again.


November review: A good run does not equal certain recovery – yet

A surprisingly warm November brought rays of sunshine to capital markets. All the major equity markets (tracked in the table below) saw positive returns, while government and corporate bond yields fell, pushing up bond valuations, and most currencies made gains against the US dollar.


Emerging markets still defying gravity

Emerging markets (EM) are usually very sensitive to the ebbs and flows of global growth. Investors see EM assets as high risk but potentially high reward, meaning buyers are plentiful when the going is good, and sparse when things look bleak. In that respect, this year could hardly have been more difficult for EMs: global growth has stalled, interest rates are rising at the quickest pace in a generation, and the US dollar has been exceptionally strong. Many of the larger EM companies have substantial dollar-denominated debts, so this can be a toxic mix for developing nations.


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