Investment

December General Markets Comments

by Pierre Mouton

December General Markets Comments

“Heroes” – David Bowie, 1977.

2022 could have been year for heroes in financial markets. Imagine that, after Jay Powell’s announcement in November 2021 of higher for longer interest rates, you had positioned your portfolios for a 250 bps increase in US 10-year yields and for 8 Fed Funds Rates hikes totalling 425 bps. You would be a hero.

Even more a hero if you had bought energy stocks because you suspected that a war would break out in Europe and drive oil and gas prices through the roof. Even more again if you went short en vogue cryptocurrencies and Tesla, as both suffered very serious drawdowns for various reasons.

But at the end of the year, it appears that there were no heroes, as no one could have predicted the landslide changes the year 2022 witnessed. Years of accommodative monetary policies and peaceful times kind of hypnotized many investors who thought that Growth had beaten Value forever and that Central Bankers would always be market friendly. “We can beat them, forever and ever” says the song; 2022 shows once again that this does not apply for markets.

December has been a painful month, as evidenced by the negative returns posted by all asset classes, barring Gold (+3.14%): the S&P 500 abandoned 5.9%, the tech-heavy Nasdaq 9.1% (Tesla being a serious detractor with -36.7%), the MSCI Europe 3.6%, the Topix 4.7% and the MSCI Emerging Markets “only” 1.6%, helped by China’s U-turn on its zero-Covid stance.

Long-term yields rose again (+27 bps for the US 10-year, +64 bps for the Bund), in parallel with another month of underperformance from Growth versus Value (-6.15% and -2.6% respectively). Credit was flattish (-0.4% for the Itraxx Crossover), like Oil (-0.4%). The broad Commodities Index was down 0.7%.

 

 

 

 

Past performance is not indicative of future results. The views, strategies and financial instruments described in this document may not be suitable for all investors. Opinions expressed are current opinions as of date(s) appearing in this material only. References to market or composite indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only. NS PARTNERS SA provides no warranty and makes no representation of any kind whatsoever regarding the accuracy and completeness of any data, including financial market data or other financial instruments referred to in this general comment. This document does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. Any reference in this document to specific securities and issuers are for illustrative purposes only, and should not be interpreted as recommendations to purchase or sell those securities. References in this document to investment funds that have not been registered with the FINMA cannot be distributed in or from Switzerland except to certain categories of eligible investors. Some of the entities of the NS Partners Group or its clients may hold a position in the financial instruments of any issuer discussed herein, or act as advisor to any such issuer. Additional information is available on request. © NS Partners Group

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November General Market Comments

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Antonio Mira
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Antonio Mira joined NS Partners in 2006 as Group Chief Financial Officer. He heads the corporate functions and is involved in coordinating and implementing the decisions of the Executive Committee.
An experienced bank auditor, Antonio started his career in 1995 with Arthur Andersen, where he worked for some 7 years before joining Ernst & Young in 2002 as a Senior Manager.
Antonio is a Swiss chartered accountant and a Business graduate of Lausanne University (HEC).

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Sébastien Poiret joined NS Partners in 2008 and manages funds of hedge funds and private client mandates. He also oversees the development of the Group’s offices in Mauritius.

Prior to joining NS Partners, he served as a Trader, Head of Manager research and Portfolio Manager in the USA and Switzerland for a single hedge fund (1998-2004) and for Optimal (2004-2008), Grupo Santander’s fund-of-hedge funds operations.

Sébastien holds a Bachelor’s degree in Corporate Finance from the ESPEME Business School (EDHEC Group) and an MBA in Finance and Economics from the Institute of Business Administration, both in Nice.

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He started his financial career in 2005 as Head of Quantitative Analysis for a Swiss Family Office, selecting funds and managing portfolio allocation. In 2008, he switched to the alternative world and joined Peak Partners as hedge funds analyst.
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