August markets were a game of Squid Game not hide-and-seek
Søren Otto Simonsen
Senior Investment Editor
Summary: August is synonymous with summer holidays, closed schools and time to have fun and play games. In the financial markets, however, there was little fun to be had last month. Like playing hide-and-seek in a completely empty room, there was no escaping negative performance. Rather, like in the infamous Squid Game, there was a target on everyone’s back and only very few left as winners.
As dark clouds of recession fears started forming over equity markets in August – especially in the US – global performance took a hit and fell more than 4 pct. This happens as leading indicators are closing in on territory that signals recession may be on the horizon, while inflation keeps running wild, interest rates take flight and the risk of an energy crisis increases by the day.
As the two best-performing regions, Asia came out of the month falling a bit more than one pct., whereas Emerging Markets ended August status quo.
Global equities are measured using the MSCI World Index. Equity regions are measured using the S&P 500 (US) and the MSCI indices Europe, AC Asia Pacific and EM respectively. Equity sectors are measured using the MSCI World/[Sector] indices, e.g. MSCI World/Energy. Bonds are measured using the the USD hedged Bloomberg Aggregate Total Return indices for total, sovereign and corporate respectively. Global Commodities are measured using the Bloomberg Commodity Index. Oil is measured using the next consecutive month’s WTI Crude oil futures contract (Generic 1st 'CL' Future). Gold is measured using the Gold spot dollar price per Ounce. The US Dollar currency spot is measured using the Dollar Index Spot, measuring it against a weighted basket of the following currencies: EUR, JPY, GBP, CAD, SEK and CHF. Unless otherwise specified, figures are in local currencies.
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