“Blood” flowed into equity, bond and cryptocurrency markets in the first half of the year, while commodity markets soared.
The war in Ukraine brought the “perfect storm” as the “fire” of inflation and interest rate hikes by central banks caused drama in the markets.
Investor sentiment remains under pressure, with the war in Ukraine showing no sign of abating and inflationary pressures persisting, forcing central banks around the world to aggressively raise interest rates, fueling concerns of a serious slowdown or even recession. global economy.
About 13 trillion dollars dissipated in equity markets, with the benchmark S&P -500 index experiencing its worst six-month period since 1970, the era of stagflation.
Strong sell-off in bond markets as well with 10-year US Treasury recording worst first 6 months of year since 1788.
The picture of the markets in the first half of this year is summarized as follows:
– Wall Street indices: The S&P is down 20.58% since the start of the year, its worst first half since 1970. Meanwhile, on a quarterly basis, the Dow Jones and S&P 500 posted their worst performance since 2020, when the pandemic. Accordingly, the Nasdaq recorded its worst quarter since 2008, plunging more than 20%. In the first 6 months, the Dow Jones fell by 15.31% and the Nasdaq by 29.51%.
– Euromarkets: The Stoxx 600 closed at -9% for the quarter, the worst performance since the beginning of 2020, while since the beginning of 2022 it has lost 16.6%.
The DAX-30 index fell in the first six months of 2022 by 19.52%, the CAC-40 index by 17.20%, while the FTSE-100 index presented a better picture, falling 2.95%.
-Bonds: Losses in 10-year US Treasuries hit 13%, worst first-half performance since 1788(!), as concerns intensify that high inflation is here to stay and interest rate hikes will be much bigger than originally estimated. Losses of 22% were recorded for German bonds and 25% for Italian bonds.
– Commodities: And while the rest of the markets were experiencing an endless descent, that of commodities was galloping with “driver” energy. It was the strongest rally for commodities since World War I. The CRB Commodities index has gained 30% since the beginning of the year.
– Oil – Natural gas: The brend in the first half of the year strengthened by 40.42%, in the second quarter by 6%, however it registered losses of 6.5% for June. US crude ended the first half of the year with a 40.86% increase in price, while it gained 5.5% in the second quarter, after losing 7.8% in June. The price of natural gas has increased by 48.45% since the beginning of the year.
– Gold: Down 1.51% in the first half. A strong dollar and concerns about rising interest rates continue to weigh on the precious metal, with gold unable to benefit from investors’ continued aversion to risk holdings.
– Cryptocurrencies: Bitcoin between April and June records a drop of 58% – the most since the third quarter of 2011.