We closed out the first half of 2022 last Thursday, and there was plenty for investors to reflect on. Particularly in the US (gearing up for the long holiday weekend) as the S&P 500 experienced its worst first half of the year since 1970; with US treasuries seeing their worst half year ever. Irish investors fared slightly better, as currency fluctuations softened the blow. It’s also worth noting that stock markets hit an all-time high on 3rd January of this year, which somewhat amplifies the stark nature of year-to-date numbers.


It was another tough period on the economic data front last week (more info below) as investors start to focus on slowing economic growth. Inflation expectations (as measured by consumer sentiment and derivative markets) have dropped significantly in recent weeks. This dovetails with commodity price action, with the prices of a range of metals and softs down over 20% (including gas, wheat, aluminium) from their highs of this year. The balancing act of central bankers, as they attempt to curtail inflation whilst not derailing economic growth, is likely to be the key focus for the second half of 2022. The phrase ‘soft landing’ (which I’m sure many will recall from our own policymakers in 2008) has entered the conversation as recession fears start to grow. However, as always, looking to history can help inform our views. A recession does not predict future negative stock market returns, nor does a bear market for equities predict a recession.


Finally, we are currently finalising our half year update to our Investment Outlook, so please keep an eye out for that in your inbox over the next week or so.