Global Markets Weekly
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Charles-Henry Monchau Chief Investment officer

The FOMC meeting on Tuesday and Wednesday dominated sentiment for much of the week. A majority of officials now expect three quarter-point hikes in 2022 instead of two. The Fed also announced a faster tapering of its monthly asset purchases, which are now expected to stop by the end of March. While the initial market reaction was positive, stocks lost their gains and volatility spiked at the end of the week, partly due to “triple witching,” or the expiration of three types of options and futures contracts on Friday. With interest rate expectations on the rise, growth stocks (Tech, communications) fared the worst. The tech-heavy Nasdaq touched an intraday low on Friday roughly 7% below its recent peak. Meanwhile, the defensive sectors (utilities, health care, and consumer staples) managed gains. Shares in Europe fell as governments tightened restrictions to curb the spread of Covid-19 and central banks (Fed, BoE, Norges Bank) became more hawkish. The Dollar ended higher on the week as the ECB left monetary policy unchanged. In Fixed Income, Omicron pushed yields lower with the 10-year Treasury note yield dropping below 1.40% for the first time in nearly two weeks. Crytpos were weaker across the board.