The S&P/ASX 200 (ASX: XJO) delivered its third straight week of gains
while US stock markets were mixed over the five days.
Here are my three key investor takeaways from the week.
Yield curve says recession
The yield curve, which charts the current available interest rates on government bonds ranging from the very short-term to 30 years inverted for a short period of time during the week.
Traditionally, an upward sloping curve suggests a strong outlook for the economy and the likelihood of higher interest rates, with the inversion suggesting the opposite.
In fact, many experts believe it highlights the impending risk of recession. Either way, it is another unique event that only contributes to the growing uncertainty.
Property prices fall
One of the asset classes most connected to interest rates is property, particularly in Australia which relies heavily on variable rate mortgages.
The month saw price falls, albeit only tiny, in Australia and Sydney as the availability of credit and a surge in supply hit the market.
The strong link between mortgages and the cash rate suggests the RBA will remain much slower to raise rates than the US Federal Reserve.
Quarterly performance results
March 2022 was a rare quarter in which the Australian sharemarket easily outperformed the US.
The Dow Jones fell 4.6%, S&P 500 was down 4.9% and the Nasdaq finished 9.1% lower, with the latter representing some US$2 trillion in lost value.
Australia was significantly stronger, with the S&P/ASX 200 (ASX: XJO) slightly positive at 0.7%, driven by a 25% jump in the energy sector and 12% in utilities and materials, once again showing how different our market can be.
