Liontrust Views Spring 2023 - Flipbook - Page 5
RISKS
How far central banks will go to tame
Geopolitical issues persist too, with tensions
inflation is the obvious risk for investment
rising in Asia between the US and China
markets because of the extent to which
while the war in Ukraine passed its first
higher interest rates will dampen the
anniversary. Our view remains that a mild
economy. Fears of recession persist: the
recession is more likely in 2023 than a
fight against inflation does not look to be
protracted one as central banks will not wish
easing any time soon as core inflation
to crash the global economy, which remains
remains sticky, despite headline figures
on a fairly solid footing. Nor was inflation
having fallen from the highs seen last year.
going to return to 2% in just a few months
in western economies. The narrative still
appears to be that inflation will fall slowly.
FINANCIAL
MARKETS
Global financial markets recorded a second
withdrawals
quarter of modest recovery in the first quarter
largest bank (Credit Suisse) being taken
and
Switzerland’s
second
of 2023, after the rare run of three successive
over by its larger rival, UBS, all of which
quarters of negative returns in 2022. The
sparked concerns about the financial sector.
S&P 500 Index was up around 7%. But the
Policymakers intervened quickly to control
headlines were dominated by regional US
events and prevent runs on banks, and the
banks, most notably Silicon Valley Bank,
volatility subsided as the markets appeared to
convulsing in the face of significant depositor
move past the possibility of a systemic crisis.
CONCLUSION
A lot of bad news has been priced into
reasons to be optimistic. The banking
markets now and a more positive tone
issues in March demonstrated there are
underlies them. We believe pessimism
still reasons to be cautious, but we believe
among investors reached extreme lows
now is a good time to invest for those with
in the last quarter of 2022. As we look
a longer term perspective of two years ore
around global markets today, we see more
more.
LIONTRUST VIEWS – SPRING
5
