The week in review

Amid the continuing war in Ukraine and its geopolitical fallout around the globe, many markets were able to claw back their losses in the week of 21 March. While bond yields surged as the US Federal Reserve took a more aggressive approach to raising interest rates.
Published 29 March
4¼ mins

What’s happened in markets?

FTSE All Share0.810.490.26-0.0813.145.634.55
Euro Stoxx 50-0.83-2.46-8.75-9.673.488.545.60
S&P 5001.813.74-3.52-4.3517.8319.5116.21
Japan Topix3.785.61-0.09-0.503.5010.457.51
MSCI Asia Pac.-0.64-3.97-8.28-9.38-14.225.446.63
MSCI Emerg. Mkts.0.22-3.78-7.38-8.39-10.535.105.77
Jo’burg All Shares-0.550.755.312.2520.0114.5111.28
UK Gov’t Bonds-1.71-2.61-8.30-7.93-7.27-0.980.52
US Gov’t Bonds-1.83-3.11-5.25-6.36-4.921.151.59
Global Corp. Bonds-1.33-2.61-7.64-7.76-5.532.202.91
Emerg. Mkt. Local0.00-4.74-5.64-5.56-6.76-0.450.97
Figures in the respective local currencies as at the end of trading on 25/03/2022.

Moving into its second month, the Russia-Ukraine conflict continued to dominate the geopolitical scene. However, there were indications that the initial phase of the conflict has had less impact than expected on economic activity. The latest global purchasing managers’ indices (PMI), which are forward looking indicators, came in better than projected.

In the US, the flash composite PMI from S&P Global was 58.5 for March, indicating the fastest rise in private sector output since July 2021 and marking a further recovery from the pandemic-induced slowdown.

However, inflation remains an issue and Federal Reserve (Fed) chair Jerome Powell signalled a more aggressive stance after raising interest rates for the first time since 2018. An interest rate rise of 50 basis points is now widely expected at the Fed’s May meeting, with further increases likely at subsequent meetings through the year.

The strong US labour market may also add to inflation pressure by pushing up wages. The latest jobs report, to be published on 1 April, could see unemployment dropping even further below the current 3.8% – a level generally seen as effective full employment.

In the Eurozone, the flash S&P Global composite purchasing managers’ index fell to 54.5 in March – down slightly from February’s five-month high, but still above the pre-pandemic average.

A US-EU deal for increased export of US liquified natural gas – intended to reduce Europe’s dependence on Russian fossil fuels – was among the striking developments in the week of 21 March. Meanwhile, all eyes are on the 31 March meeting of the Organization of the Petroleum Exporting Countries (OPEC), in the hope that oil supply targets will be raised.

The week of 21 March saw many markets claw back the losses sustained from the Russia-Ukraine conflict, with the S&P 500 now at levels above those seen before the invasion of Ukraine. However, the conflict is still raging and its full effects will be seen in longer-term economic impacts.

Emerging market equities (-7%) have lagged developed market equities (+5%) over the last 30 days. Growth stocks (+5%) performed slightly better than value stocks (+3%) and there was little difference in performance between small capitalisation stocks (+3%) and large capitalisation stocks (+4%). Unsurprisingly, energy remained the best-performing sector (+8%), with the performance of oil up 26%. Global property also performed well (+4%), while the worst-performing sector was consumer staples (-2%).

Bond yields were one of the big stories over the week of 21 March as a result of the hawkish stance taken by the Fed. Yields move inversely to prices and the yield on the US two-year Treasury bond surged above 2%, its highest level since 2019. While the US dollar has appreciated.

On the corporate front, shares in Tencent dropped after the Chinese social media giant reported its slowest revenue growth since it listed on the Hong Kong Stock Exchange in 2004. The company has been hit by China’s regulatory crackdown on its technology sector.




UK GDP (QoQ)1.01.0
UK PMI59.7
UK CPI (YoY)6.2
EU GDP (QoQ)0.3
EU PMI54.5
EU CPI (YoY)5.9
US GDP (QoQ)7.07.0
US PMI56.558.0
US CPI (YoY)7.9

What’s happened in portfolios?

While our slight preference for European equities brought exposure to the effects of the Ukraine war, our recent allocation to S&P 500 stocks has helped to balance this out.

Our short duration position in fixed income assets continues to help us on a relative basis as yields begin to rise. We will be looking for an opportunity to slowly build on our risk exposure in this market, tilting out of credit and into duration. Taking interest rate risk as that starts to be priced in.

However, we retain a much stronger preference for real assets and alternative strategies, which have taken on the traditional portfolio role played by fixed income in past decades. It gives us the opportunity to find yield and income within the portfolio with a lower correlation to other assets.

In real assets, we topped up our portfolio position in The Renewables Infrastructure Group (TRIG) by participating in its successful capital raise. The event was oversubscribed and attracted almost £280m. It reflects the current appetite for renewables and provides a greener link to rising energy prices.  

We are also excited about the addition of Sustainable Development Capital LLP (SDCL) to the portfolio. Specialising in energy efficiency solutions for business and industry, the fund offers us a different angle to typical renewable investments.

Finally, in alternative assets, we were pleased to see Hipgnosis values rebound strongly, after the songs fund was briefly hit by artist Neil Young’s withdrawal from Spotify and wider market unease.

What's happening this week?

31 Mar • UK GDP Growth Rate | 31 Mar • US Initial Jobless Claims | 01 Apr • EU Consumer Price Index

Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how their portfolios are responding to market events, or call +44 (0)1624 645000 to speak to our client services team.


If you would like to find out more about how we manage clients’ investments, please contact us on the same number as above. Or you can get in touch using the links to the forms towards the end of this page.

Sources: Nedbank Private Wealth and (1) Bloomberg, (2) Reuters, (3) Markit Economics, (4) US Bureau of Labor Statistics and (5) CNBC.

The value of investments can fall, as well as rise, and you might not get back the original amount invested. Exchange rate changes affect the value of investments. Past performance is not necessarily a guide to future returns. Any individual investment or security mentioned may be included in clients’ portfolios and is referenced for illustrative purposes only, not as a recommendation, not least as it may not be suitable. You should always seek professional advice before making any investment decisions.

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