Read our market review and find out all about our theme of the week in MyStratWeekly with our experts Stéphane Déo, Axel Botte, Aline Goupil-Raguénès and Zouhoure Bousbih.
This week :
Topic of the week: China 2022: in the “eyes of the Tiger”
- The “common prosperity” had the immediate effect of a slowdown in activity and distortions in Chinese financial markets in 2021;
- The priority for 2022 is sta-bi-li-ty, which should result in pro-growth economic policies and less aggressive regulatory actions except for the real estate sector;
- Chinese financial markets should be less volatile in 2022, but real estate risk should continue to weigh on investor sentiment;
- The main challenge for China is demographic as it threatens the country's status as a world power;
- China is counting on the integration of its rural population in order to expand its middle class and increase its labor productivity.
Market review: Fed signals ‘game over’
- Powell signals March hike, QT coming soon;
- Extreme volatility in equity markets;
- US yields trading wildly amid curve flattening;
- High yield under significant widening pressure.
Chart of the week
More than half of the Nasdaq values, 56% to be precise, have lost 50% or more from their historical highs. However, these values account for only 7% of the market capitalization of the index.
This explains why, despite the very marked correction for a large majority of values, the index held up fairly well in comparison. It remains carried at arm’s length by the few “mega-caps” that have resisted much better.
Nevertheless, the correction of excesses is ongoing and the dispersion of performance is very marked.
Figure of the week
The current drawdown (drawdown = loss from the previous high) of a Bund portfolio with a 7 to 10-year maturity.
Third worst since Euro launch in 1999.
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