26.Dec .2022 18:19

Galt&Taggart Published A Report On Global Equity Markets

Galt&Taggart Published A Report On Global Equity Markets
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Galt & Taggart Published a report On Global Equity Markets:

US GDP growth came in higher than expected, anticipating more Fed hawkishness to come. As it has been during most of 2022, good economic news are scaring markets, as they hint on more restrictive monetary policy. In 3Q22, the US GDP growth stood at 3.2% as compared to a 2.9% forecast, which is a rather sizeable overshoot.

On a positive note, however, some favorable macroeconomic data was also released later during the week. Firstly, the PCE-measured November inflation declined in line with expectations. The core PCE fell from 5.1% y/y to 4.7%, while headline fell from 6.1% to 5.5%. Secondly, durable goods orders* in November contracted significantly more than expected, with a -2.1% y/y fall vs the consensus forecast of -0.6%.
Lastly, the US home sales continued a sharp downward trend.

UK delivers a lower-than-expected GDP growth, hinting on prospects of deep recession to come. While similar news on the US may have cheered investors, the UK is now in a position where growth prospects are becoming a major concern over inflation. Therefore, any bad news on economic activity may be interpreted as a recession catalyst.

Lastly, the Euro Area inflation does not escalate for the first time in 2022. Since January 2022, both core and headline inflation in euro zone have been rising persistently to reach 5.0% and 10.6% y/y, respectively. In November, however, the headline figure retreated to 10.1% y/y, while the core remained at 5.0%. This marks (at least) a symbolic win for the ECB.

Lastly, analyst expectations for 2023 markets performance is rather intriguing. For detailed analysis on what to expect next year, please view our report on 2023 Investment Outlook.