The S&P/ASX 200 (ASX: XJO) dropped 1.8% across the week, outperforming US stock markets with all three benchmarks falling more than 2% across the five days.
Here are my three key investor takeaways from the week.
Supply chain relief
Supply chain interruptions have been central to the challenges facing the global economy and ultimately contributing to inflation.
In a globalised world, all roads lead to China for the production of so many in-demand goods, yet few have been able to look beyond the short-term inflationary impact into one of the biggest contributors to the problem.
The end of lockdowns in China, which have ground global shipping to a halt, may well be exactly what the global economy needs to recover in the second half.
Has the market bottomed?
Whilst many are still predicting the Federal Reserve and RBA to go all the way with interest rates, a growing number of groups including our own Commonwealth Bank of Australia (ASX: CBA) have suggested rate hikes will end far sooner than expected.
One such group was RBC Capital Markets, who suggests the Fed may pause rate hikes in the second half of the year, rather than risk sending the US and global economy into recession.
The CEO of CBA shared similar concerns, highlighting the drop in consumer sentiment and large impact on variable rate mortgages.
The lucky country
Long known as the lucky country, 2022 is reminding us why. China’s demand for commodities saved us from the GFC and this time, war in Ukraine has saved us from the global selloff.
Prices of everything from grain to coal and gas have surged, supporting the ASX along with Federal Government tax takings; the lucky country indeed.
