S&W The Pulse

Markets have had a volatile start to the year, with particular weakness from the technology sector. The immediate catalyst appears to have been the hawkish minutes from the most recent FOMC meeting, which raised expectations of faster and steeper interest rate rises. Global equities have fallen around 4%.1US equities have led the decline, with a significant sell-off in the 6 US mega caps, including Apple, Microsoft, Alphabet, Amazon, Tesla and Meta Platforms. Valuations had become stretched and the sector had looked ripe for a re-rating. Value markets, such as the UK, have fared better. While inflation, Covid variants and geopolitical tensions continue to weigh on investor sentiment, policy easing in China should improve global growth prospects and mitigate the impact of US rate rises. Inflation remains the key variable for the coming months. Source1 Refinitiv, Smith and Williamson SUBSCRIBEStay up to date with our latest insights, subscribe to our mailing list here and choose the topics you’re interested in: