Market Update – 6th April 2022.

It has been a quiet week, with few market moving headlines, which isn’t a bad thing after a tumultuous month. Markets have now largely made up lost ground after the chasm created in the last 5 weeks. This is why it is vital to avoid any knee-jerk reactions following market shocks, and stick to your investment plans set out for the medium to long-term horizon.

The traditional Chinese Qingming festival took place on Monday and Tuesday – a holiday to visit, remember and pay respects to ancestors. The Shanghai Stock exchange was closed, but many ceremonies and traditions were muted, given the current zero-Covid measures in Shanghai. Despite the current Covid outbreak in China, corporates in the region remain robust with the support of the government and the People’s Bank of China (PBOC). As the outbreak will likely have a short-term impact on markets, we may see further compressed valuations making equities more attractive in the region.

Amongst the data released this week, we saw healthy PMI for the UK, US and Eurozone, which bolsters our medium to long-term outlook that equities in the space look attractive.

Later today, we have the minutes from the last Fed monetary policy meeting. These minutes give us an insight into the discussions that the Fed are having, as well as the deliberations and thoughts of members that didn’t make it to the press conference. However, we are well aware that whilst it is useful to get a glimpse as a fly on the wall, the meeting was last month, and some of their thoughts may have changed. As part of the minutes, we fully expect to see a more detailed plan of how the Federal Reserve will likely shrink its immense balance sheet.

Investment Management Team.