February market performance: It’s not always a one-way street February market performance: It’s not always a one-way street February market performance: It’s not always a one-way street

February market performance: It’s not always a one-way street

Market Rewind
Søren Otto Simonsen

Senior Investment Editor

Summary:  Up and down and up and down. We really should have seen it coming. February’s market performance follows the three previous months’ trend of a good month followed by a bad one. What’s different this time, though, is that there’s now misalignment between the regional performance. For the first time since October, we see regions in both red and green.

Global equities fell 2.5 percent during February. It was a month where the markets – once again – had a tough time figuring out whether to believe one outlook or the other. Whether we are moving into a recession, or the stock market will bounce back is still a key question to ponder. One area where February was different than the last small handful of months is that ever since November, the regions have moved in tandem either up or down. This month, there’s regional differences in equity performance. Overall volatility has been lower than the last few months.

US -2.6%.
The US stock market declined almost the same as the global index. The negative performance was caused by a wide variety of things, where two dominate: 1) a surprisingly high PCE inflation for January, which spooked the markets and 2) the continued focus on structural (long-term) inflation and with the long-term increases in US bond yields, which together could be feared as signs of moving into potential recession territory.

Europe 1.6%.
Europe registers as the only region with positive performance this month. The green figures (or blue in this article) is mainly driven by strong consumer consumption figures and easing inflation figures which in total can be interpreted as lesser risk for a recession on the European continent.

Asia –5.9%, Emerging Markets –6.4%.
Both the Asian and Emerging Markets fell more than five percent during February. While several components in both were in red this month, especially Hong Kong had a tough time. The negative performance was based on economic, policy and geopolitical uncertainties.

All sectors ended in minus in February. The best-performing was the popular information technology sector, which basically hit status quo. Energy, materials and real estate all fell more than five percent due to increasing interest rates, recession fears, and inflation and geopolitical uncertainties. The overall sour picture shows the volatile nature of the financial markets these days.

Global bonds fell 1.6 percent on an aggregate level, with corporate bonds falling more than sovereigns. The move should mainly be seen as a countermove to January’s robust performance for the asset class. This was based on investors moving into bonds with an expectation that the fiscal tightening regime that the central banks have imposed in recent times would soon end. But with some economic data like e.g., the aforementioned PCE inflation and a strong US job report suggesting that further tightening is needed to quench inflation, investors likely have moved towards expecting more tightening than they originally hoped, which in turn sends bonds south.

Check out the rest of this month’s performance figures here:

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.