There was a huge amount of news to digest last week as we saw interest rate rises, a stellar US jobs report, a 25% fall in after hours trading for Meta, and Punxsutawney Phil predicting another six weeks of Winter. We are aware that some of the weekly commentary these days can feel a little like Groundhog Day, as the inflation & interest rate narrative continues to dominate the price movements of risk assets. However, last week was slightly different as we saw a rate hike from the Bank of England and a shift in language from ECB President Lagarde take centre stage. Markets are currently hypersensitive to the concept of higher interest rates. For example, Lagarde’s omission of the phrase ‘very unlikely’ when answering a question regarding higher rates in the eurozone sent both equity and bond prices lower in the single currency bloc.

In relation to earnings the news came thick and fast with over 112 S&P 500 constituents reporting last week. Amazon helped markets close the week higher after their results after hours on Thursday, but it was the sharp fall in Facebook parent Meta the day before which caught the headlines. After offering guidance about slower future revenue growth the company saw the aforementioned fall of over 25% – knocking a record $240 billion off its market cap. Finally, although we are getting hit with inflation, spare a thought for Turkey which due to its ‘unconventional’ monetary policy, saw prices rise at an annualised rate of 49% in January.