What to watch in the second half? [Video]

Ipek Ozkardeskaya Swissquote Bank Ltd

The first half is finally over, but the pain is certainly here to stay.
Economic data looks bad, employment softens, and inflation is up. The S&P500 closed the first half in the bear market, having lost more than 20% since the beginning of the year, while Nasdaq, which is more sensitive to the Fed policy and to the rising interest rates, closed the first half more than 30% down.

Gold did a good job as a hedge to turmoiled markets, but the rising US yields increase the opportunity cost of holding the non-interest-bearing gold certainly limited the upside potential of the precious metal.

Bitcoin proved to be an imperfect hedge against both inflation and the falling markets, while the DAX is down by more than 20%, and the FTSE, which benefited from surging oil and commodity prices, could lose its advance.

Funnily, Chinese stocks diverged positively in the latest quarter, to catch up the losses for the year. Nasdaq’s Golden Dragon China index rebounded by more than 65% since the March dip.

What’s next? The pain may not be over, as the Fed is expected to remain as aggressive as needed until it sees a material and a persistent softening in inflation.

Author

Ipek Ozkardeskaya

Swissquote Bank Ltd

Ipek Ozkardeskaya began her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked in HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients.

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