Daily Market Commentary

September 23, 2022

Bonds & Stocks
It was a sea of red for equity trading desks around the world, with the rout in the S&P 500 pushing the gauge within a striking distance of its June bottom -- which stands 1.3% below current levels. The lack of fullblown capitulation may be a sign that the carnage isn’t over yet. Big fims like Goldman Sachs Group Inc. are slashing their targets for stocks, warning that a dramatic upward shift in the outlook for rates will weigh on valuations.

Investors are flocking to cash and shunning almost every other asset class as they turn the most pessimistic since the global financial crisis, according to Bank of America Corp. Investor sentiment is “unquestionably” the worst it’s been since the crisis of 2008, with losses in government bonds being the highest since 1920, strategists led by Michael Hartnett wrote in a note.

Investors dumped UK assets, sending bonds on a record plunge and the pound to a 37-year low, as the new government’s stimulus will balloon the country’s debt and stoke inflation. The yield on five-year bonds jumped as much as 57 basis points, set for the biggest increase ever, after Chancellor of the Exchequer Kwasi Kwarteng outlined tax cuts and spending plans. The pound plunged as much as 2.1% against the dollar to near $1.10, the lowest since 1985.

The information represented herein was obtained from various sources, which we believe to be reliable. Neither the information presented nor opinions expressed constitutes an offer to buy or sell any security. And it is not intended to guide the investor on which securities to buy, or when to buy or sell.

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