The market had slipped back when inflation jumped and the Federal Reserve brought forward interest rate hike planning, but stabilized as Chair Jerome Powell pledged to take a measured approach to tightening.
In an unstable market, it can be futile to search for catalysts behind every shock. Instead, last week’s risk asset selloff validated our calls that fragility risks were rising.
With the technological acceleration there has been a rebirth of active management and that discretionary hedge funds based on fundamentals have behaved better than quantitative ones.
Global stocks rose in the first quarter, but volatile trading patterns reminded investors that the road to normal will be bumpy. By carefully considering the risks that lie ahead, equity investors can prepare for the next phase of recovery from the pandemic.