There was plenty on the agenda last week, three rate rises from major central banks, a slew of earnings, an inflated jobs report, and a deflated spy balloon. And unfortunately, Punxsutawney Phil had some bad news for us. More info on the relevant bits below.


Some of you have been in touch noting the big gains of growth stocks so far this year, despite the move higher in interest rates. With the benefit of hindsight some of the selling of individual names (Meta springs to mind) looks to have been overdone, and the ‘belt tightening’  (read job cuts) by Big Tech so far this year has been well received by the market. However, this doesn’t explain it all.


We often talk about the forward looking nature of markets and how important certainty (or something resembling it) can be. Higher rates are not positive for growth stocks where you are discounting back future profits to today at a higher interest rate, which reduces the value in today’s terms. However, there is a growing consensus regarding the level that interest rates will settle at. This reduced the volatility of interest rates. Therefore, whilst rates are still going up, investors are more comfortable they know the pace and direction of travel. An all-important input into the fabled discounted cash flow model. However, Friday’s jobs report could shake some of that resolve in the short term.


As always, if you wish to discuss anything in further detail, please do get in touch.