No. Despite the recent spate of lockdowns in China, we still anticipate some form of easing of the current zero-COVID policy and increased support for the economy following the Party Congress in October.
New Zealand’s COVID-19 containment strategy served the economy well during the early days of the pandemic. However, New Zealand equities and bonds suffered in 2021 as growth slowed to a halt late in the year due to lockdown measures and inflation moved higher due to labour market constraints. Heading into 2022, New Zealand authorities have pivoted the strategy from zero–COVID-19 to minimisation and protection, while still embarking on a monetary policy tightening cycle. Balancing both strategies will be key to supporting New Zealand’s economic growth in 2022.
Defensive and interest rate–sensitive assets generally outperformed in July as cracks in the global economic recovery emerged, driven in part by increasing Delta variant case counts.
Risk assets excelled in second quarter, driven by improving economic momentum.
Most asset classes pushed higher in May.
Today, the US Bureau of Labor Statistics released its monthly inflation report for April, which highlighted that prices paid by urban consumers for a basket of goods and services increased by 4.2% relative to the same month last year.
The risk rally continued in April with broad-based gains across most asset classes.
21st Century infrastructure: The importance of digitisation has grown during the pandemic, as people have relied more on digital platforms, video streaming, and cloud storage. Investment across the digital infrastructure value chain continues to rise in response, and should increasingly be a priority for real asset investors.
Global equity markets advanced in first quarter, as developed markets equities topped emerging markets peers.
The 2020 UK edition of our annual report on the history of financial markets provides context for the range of returns investors can expect from equities, bonds, and cash; reveals the importance of various components of equity returns; examines the evidence for equity mean reversion; and reviews the relationship between initial valuations and subsequent returns for equities and bonds. It also analyzes the historic economic declines and sharp asset price movements that resulted from the COVID-19 pandemic in 2020.