Signet Bank Market Review

The Jackson Hole meeting involving top officials from the world’s biggest central banks has indicated their intention to follow through with the aggressive monetary stance to combat rising inflation. With large recession risks faced by both the EU and US in the nearest future, top bankers, for now, seem to choose short-term pain to economies and markets over inflationary damage. Naturally, market participants did not meet such stance with enthusiasm, with equities entering their 8th month of what now looks like a “decent” bear market. In the US, the S&P 500 fell by 4.2% with volatility index (VIX) rising to its highest level since mid-July. Similarly, we saw the European STOXX 600 down by more than 5%. Worsening labor market, below-trend growth and likely large rate increase in September suggest that the US market can forget about the “Fed put” (at least for now) and should prepare itself for a rainy autumn.

Full Market Review for August 2022 is available here.