Global Markets Stuck In Holding Patterns

Global markets are not only in a holding pattern, they are in a bunch of holding patterns, says Kristina Hooper, chief global market strategist at Invesco. They are waiting to see when the Federal Reserve will pivot. “And that means we’re also waiting for better inflation data. We know the global economy is slowing after a dramatic hike in rates and we are all waiting to see the data show a meaningful decline in inflation,” she says. Some are so eager to see those signs that they are overreacting to data showing signs of slowing, but it’s the inflation data that the Fed and other central banks will be looking for. They are also waiting for the labour market to get “less tight” in Western developed countries; if, with more signs pointing to yes, there is a global recession; earnings season to see how much damage has been done to companies’ revenues; and how the Russia-Ukraine war unfolds. There is a lot to learn, she says, from the next few months, as long as investors don’t overreact and keep their eyes on long-term goals