Quarterly Outlook
Equity outlook: The high cost of global fragmentation for US portfolios
Charu Chanana
Chief Investment Strategist
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June markets were raining blood
Market Rewind
Søren Otto Simonsen
Senior Investment Editor
Summary: The global financial situation grows increasingly concerning, which is evident in this month’s financial performance as equities, bonds and commodities all end in minus.
Global equities fell more than six percent. This could indicate that the events that have dominated 2022, i.e., the Russian invasion of Ukraine, supply chain issues, commodity and energy shortages, which among other things have driven up inflation to numbers we haven’t seen in several decades are still prevalent.
All equity regions fell more than five percent. The Western world suffered the biggest losses, whereas Asia and Emerging Markets performed slightly less negative.
Within the equity sectors, there are big differences. Most notably, while the energy sector was the best performer in May, it is now the second-worst performer. The fall can probably be attributed to a very sharp increase previously in the year and the increased fear of recession, especially in the US, which could lead to less energy consumption. The sector is still the best performer for the year.
Commodities fell by more than seven percent in June. Some of the reasons for this are that a global recession could lead to less demand for core commodities, as well as prolonged lockdowns in China. While oil and gold fell less, there was negative performance across almost the entire commodity scale. Natural gas, wheat and cotton were among the worst performers.
Check out the rest of this month’s performance figures here:
Sources: Bloomberg & Saxo Group
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.
*Data is month-to-date figures for June 2022 from 30 June, 09.30 CEST.
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.
*Data is month-to-date figures for June 2022 from 30 June, 09.30 CEST.
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