Weekly Market Summary

💡1. Asian stock markets were mixed Thursday after notes from the Federal Reserve’s latest meeting confirmed expectations for more interest rate hikes but contained no surprises to rattle investors. The Shanghai Composite Index SHCOMP, +0.50% rose 0.7% and the Nikkei 225 NIK, -0.27% in Tokyo advanced less than 0.1%. The Hang Seng HSI, -0.27% in Hong Kong shed 0.6%. Investors are uneasy over the impact of interest rate hikes in the United States and other Western economies to cool surging inflation. Wednesday’s Fed release showed board members support 0.5-percentage-point hikes at their next two meetings. That will weigh on economic activity but already was factored into stock prices.

💡2. Wall Street stocks extended their earlier gains on Wednesday afternoon after minutes from the Federal Reserve’s most recent policy meeting emphasised the US central bank’s desire to tame stubbornly high inflation. Consumer prices in the US rose 8.3 per cent year on year in April, down slightly from the previous month but still close to a 40-year high. The S&P 500, which dipped into bear market territory last week after a difficult few-month for global equities, finished 0.9 per cent higher, rising shortly after the minutes were released, having been up 0.2 per cent beforehand. The technology-heavy Nasdaq Composite rose 1.5 per cent.

💡3. Since the 10-year US Treasury yield peaked at 3.1% on May 6, the S&P 500 Index has resumed its slide, hitting 3,900, a number last seen in March 2021. Although the index has been reasonably resilient at this level, it’s still in bear market territory, down 18.7% from the Jan. 3 all-time high. The market narrative has turned from concerns about the Federal Reserve’s ability to execute a soft landing for the economy and tame inflation to concerns about corporate earnings and the risk of recession. The market narrative is centering on earnings disappointments and fears of recession, but what we are witnessing is a reversion from the extremes of the COVID stimulus.

💡4. The economy should avoid a recession because typical excesses like overbuilt capacity or credit bubbles are absent. The switch to positive real interest rates has victims, and prices for those companies have fallen hard. The real economy should benefit from robust capital spending, strong household balance sheets and excellent labor markets. Watch for earnings revision breadth and economic surprise indexes to bottom. Consider using market volatility to move portfolios toward maximum diversification, quality factors and active management. Deploy cash in investment grade bonds, non-US stock funds and cyclical such as financials, energy and industrials.

You can find the latest "Weekly Market Summary" 📔 here: https://drive.google.com/file/d/1NAW7Sb8s7qtdcovyprDx9PSAksoqn78I/view?usp=sharing 

                        ————————————————

One of the must-ask interview questions for banking and finance is: “Have you read any news recently?”, with the follow-up questions: “How would you link this news to the market and what investment suggestions would you give to your clients based on this news?” .

Showing your market sense and ability to provide feasible investment ideas would help to differentiate you from other candidates. Therefore, apart from the weekly news update / investment insights, we have also generated this Weekly Market Summary for you to have a quick understanding of the market development and tips to answer some hot discussion topics. Take a look of the summary and WhatsApp us in the group if you have questions."