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Monthly Review - September 2022

2 months ago

QUICK LOOK
The Markets

August

-9.3%

S&P 500

-5.7%

EURO STOXX 50

-5.4%

FTSE 100

-5.9%

CAC 40

-5.6%

DAX 30

-6.0%

BEL 20

-4.2%

FTSE MIB

-6.6%

IBEX 35

-6.5%

TOPIX
   
 Source: Bloomberg 30.09.2022
Dollar ascendant

Dollar ascendant

Events aligned to push the dollar to its highest level for 20 years. The Fed announced a 75 basis points interest rate hike, while the Bank of England slowed its anticipated hiking pace in response to growth fears. The Bank of Japan intervened in the currency markets for the first time since the 1990s, as the yen marked a fall of almost 25% against the greenback this year. Plans to mobilise more Russian troops in Ukraine pushed the safe haven dollar higher still. Meanwhile, the World Bank warned of growth risks if interest rate hikes continue.

Global warning

Global warning

The share price of FedEx, the package delivery giant, fell over 20% as the company announced a decline in package shipping volumes. Competitors such as UPS also fell. The new CEO described a ‘volatile operating environment’ due to falling demand, even predicting a global recession. FedEx is seen as a bellwether of worldwide economic growth, as it ships such a huge range of products. And this follows news that China’s export growth dropped sharply in August, missing economists’ forecasts, as surging inflation reined in demand from customers across the world.

Climate in focus

Climate in focus

The United Nations General Assembly in New York heard a strong message on climate change. Their leader called for major multilateral banks, such as the World Bank, to redistribute wealth to the poorer nations at the forefront of climate risk. In a well-timed move, Norway’s sovereign wealth fund, owning $1.2 trillion of assets, pledged that companies it invests in should all reach net zero emissions by 2050. And Al Gore, the former US vice president, flagged IPCC (Intergovernmental Panel on Climate Change) research findings that once true net zero is reached, global temperatures could start to drop back within five years.

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