As we hit the first quarter of 2022, the global stock market recorded its biggest quarterly loss since 2020 when the spread of the virus and the issue of the Covid-19 pandemic shook the world.
Among the biggest factors contributing to the worst record was investor concerns about the recession and the Russia-Ukraine war that prompted sell-offs, further causing U.S. shares to decline more than 1.5% yesterday.
Based on the portfolio rebalancing for the first quarter of 2022 by the U.S. Treasury Department, there was an increase in demand for bonds and a decline in yields despite the U.S. Treasury yield curve in reversal after it reversed briefly on Tuesday.
Generally the inversion of the yield curve, in which short -term treasury yields more than long -term debt, is a sign of a recession.
According to Nicholas Colas, co -founder of DataTrek Research, the inversion on the yield curve is a signal that future U.S. equity returns are somewhat disappointing.
Clearly, with the geopolitical risks affecting the rise in oil prices, it is almost certain that returns in 2022 will be negative even if treasury yields fall below 2 years.
In line with the yield surge, U.S. 10 -year Treasury yield rose significantly in the first quarter even as it retreated to 2.343% yesterday.
On Wall Street, the Dow Jones Industrial average was down 1.6%, the S&P 500 was down 1.6%and the Nasdaq Composite was down 1.5%.
For the European market, the STOXX 600 lost 0.94% and for the first quarter of 2022, it declined by 6.5% which is its biggest decline since the beginning of 2020.
The world MSCI equity index, fell 1.3% with its worst quarterly decline in 2 years at 5.7%.
ANZ Bank Australia analysts noted that riskier assets remain vulnerable as the US earnings season begins around April 11, so many are expecting a wave of income downgrades.
Meanwhile, investor confidence in a settlement between Russia and Ukraine was fading as Ukrainian President Volodymyr Zelenskiy said no quick settlement was expected as well as the country was preparing for a new attack.
Meanwhile, Bitcoin fell 2.8% to US $ 45,771.20.
