Monthly Commentary
3rd February 2023
December was a difficult month as world equities fell almost 5%, with the US and Japanese indices down even more. Bonds were also hit, especially in Europe and the UK.
Commodities were largely flat except for precious metals, which rallied as the USD index gave back more than 2% - a large move by forex standards. Bitcoin fell “only” 3% but a not insignificant 64% for the year.
2022 was not a good year
The world witnessed a blatant war of aggression and brutality by Russia, the return of double-digit inflation in the west after many decades, and a worsening global economy. Financial markets fell hard, knocking a typical 60-40 equity-bond portfolio by almost a fifth.
There were not many places to hide. Even commodities that, on aggregate, were up about 15% for the year had all that gain occurring in only the first two months of 2022.
What will markets do in 2023?
We’ll start with quoting Bloomberg:
“To kickstart the new year, Bloomberg News has gathered more than 500 calls from Wall Street’s army of strategists to paint the investing landscape ahead. And upbeat forecasts are hard to find, threatening fresh pain for investors who’ve just endured the great crash of 2022
It may be one of the most anticipated recessions of all time, but that doesn’t mean it won’t hurt.
Barclays Capital Inc. says 2023 will go down as one of the worst for the world economy in four decades. Ned Davis Research Inc. puts the odds of a severe global downturn at 65%. Fidelity International reckons a hard landing looks unavoidable...”
December was a difficult month as world equities fell almost 5%, with the US and Japanese indices down even more. Bonds were also hit, especially in Europe and the UK.
Commodities were largely flat except for precious metals, which rallied as the USD index gave back more than 2% - a large move by forex standards. Bitcoin fell “only” 3% but a not insignificant 64% for the year.
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