The S&P/ASX 200 (ASX: XJO) finished the week down 2.1% while all three US benchmarks closed lower between 1% and 3% over the five days.
Here are my three key investor takeaways from the week.
Energy crisis
All eyes are on the Northern Hemisphere this week as energy is centre stage once again. The oil and gas sector has seen significant underinvestment in terms of both exploration and production for any number of reasons.
Whilst the future is clearly renewable, the shortages of energy that are spreading across Europe and Asia confirm there is a long way to go in the transition and it will likely be extremely bumpy.
Despite calls that fossil fuels were coming to an end, the global economy seems as reliant as ever.
Volatility returns
October has traditionally seen the most volatility of any month, with most of the biggest crashes coming in the final quarter of the year. Is it happening again?
The month has seen a volatile start, with the threat of tapering, combined with inflationary conditions and what appears to be a tired bull market likely to see volatility here to stay. As always, volatility offers opportunities for the patient.
Can rates really increase?
Economists around the world continue to predict interest rates to move higher ahead of the dates announced by central banks, but can it really happen?
It is becoming more and more evident, in my view at least, that we are facing real supply chain and supply-side issues, something that rate hikes will likely exacerbate rather than solve.
If anything, we may be looking at a period of stagflation, being slowing growth and higher costs, rather than the positive inflation many are hoping for.
Perhaps this is why Australian Super feels comfortable enough to pay $1.9 billion, or a multiple of 38 times earnings, for 2,000 Optus telecommunication towers.
