Last month's update was entitled "Who would have predicted that?" - we could almost run the same title again. While fears of stagflation dominated sentiment early in the month and the Strait of Hormuz remains closed, markets ended the month in an exuberant mood.
Markets moved higher despite geopolitical shocks, rising energy prices and volatile headlines. We look at the disconnect between headlines and markets, and the role of AI and corporate earnings in driving returns.
It was a chaotic month in geopolitics and in global financial markets. The Iran conflict and the effective closure of the Strait of Hormuz, a global oil superhighway, sent oil prices higher and threatened the supply of numerous systemically important industrial commodities.
While the US market finished the month slightly lower, global markets moved higher. Market leadership continued to rotate as last year’s winners fell behind and cheaper, overlooked markets attracted renewed interest.
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