2022 has been the worst year for decades so far.
July 18, 2022
In today's 'Market Review' we take a closer look at the numbers we’ve witnessed in 2022 so far.
End to another week, and how is The Portfolio Platform holding up in the climate?
Yet another negative week for global markets with the CAC in France being the only one that didn’t fall further into the red.
Having said that, the falls were small, and this might be a sign that the world is done selling. In Europe the FTSE lost -0.52% and the Dax -1.16%.
The US was a similar story with the Dow only being down -0.16% on the week. This would have been a different story if we hadn’t seen a good rally on Friday in which most losses were reduced.
Most of what we actually saw this week was good news. UK GDP was positive, meaning the economy still grew in the first half of the year despite inflation and the conflict in Ukraine.
Oil and gas prices have dropped significantly from their peaks last month which should mean the inflation figures start coming down soon. There is still a fair way to go before we get back to ‘normal’ but another 10% or so off each and we should really start to see the benefit in cost reduction.
We also saw some good earnings figures and traders reduced the likelihood of a 1% increase in interest rates in the US as most now believe that the 0.75% increase suggested in the forward guidance will in fact be exactly what the FED will do.
Many believe we’ve reached a bottom, and we certainly feel that we should have. The lack of gas reaching Europe is still our main concern, particularly for countries like Germany. If this can be resolved, then everything should start to get back on track in the not too distant future.
So, how much damage has been done? This is where we are with equity markets across the world right now:
MARKET. Percentage loss year to date
MSCI World index -20.7%
S&P500 (US) -18.95%
Dow Jones -13.9%
Nasdaq 100 -26.8%
FTSE (UK) -3.05%
CAC (France) -15.62%
DAX (Germany) -19.01%
Hang Seng (HK) -13.25%
Shanghai composite (China) -11.31%
Nikkei (Japan) -6.96%
The worst first half to the equity markets for 50 years and trillions have been lost. BUT we must go on and it’s what happens in the next 6 months that will tell us who will come out on top in 2022.
I wish we could tell you that The Portfolio Platform has been unscathed, but I can’t. Despite the world class performance from our traders in general most trading years, this year- we’ve witnessed a combination of positive strategies, single digit losses, and losses similar to markets.
However, as our traders tend to yield 2-4 x market performance when the markets move up, mitigating risk in periods like this is key. We believe they’ve done this well.
As equity traders, it has been tough. However, if markets can gain some upward momentum in the second half to this year- we expect a few more star performers, like our current superstar strategy.
It would be hard to go any further without pointing out the unbelievable performance from Cambridge Futures. This is TPP’s most popular strategy; their risk management has been second-to-none and their performance astonishing.
CAMBRIDGE FUTURES and their % profit
2020 results: 46%
2021 results: 69.6%
2022 so far: 6.1%
This is a strategy that only goes short the market very very occasionally, so if you’re sitting there thinking they’ll suffer when the market moves back up, think again. They are 95% long players. BUT, what they have done, is preserve capital and avoid as many of the drops as possible.
They will stay out of the market if it looks like it might drop (impossible to miss them all), and then re-enter the market when the time looks right.
It is still volatile, and it’s hard to reduce that volatility while stocks are collapsing, but they have done a fantastic job of staying on top of it and returning all their linked portfolios an impressive 6.1% return year to date.
Click here to view Cambridge Futures. A must for any portfolio.
So onto another week in the markets and another earnings season. Strategists have been expecting the second-quarter earnings season to contain disappointments and downward revisions, as companies deal with inflation, supply chain issues and staff shortages.
“We can shift to earnings and that will take up all the oxygen in the room. There’s a possibility this is where the market could make some traction,” said Art Hogan, chief market strategist at National Securities.
“There’s a chance that expectations are so low, and the narrative around guidance is that it’s going to have to come down. If it doesn’t, there’s a chance we’ll see a positive reaction to that.”
Earnings for the S&P 500 companies are expected to gain 5.6%, based on actual reports and estimates, according to I/B/E/S data from Refinitiv. As of Friday morning, 35 S&P companies had reported, and 80% of those reported earnings above forecasts, Refinitiv found.
A good move to the upside has been a long time coming and our traders and trading teams are very well placed to take advantage of it.
“TPP might just be about to revolutionise investment for the retail market.”
- London Stock Exchange 2020