The last quarter of 2022 was filled with surprises, with October and November posting strong positive returns to soften the blow suffered from the year’s high volatility. The US Federal Reserve (Fed) hinted on interest rate hikes cooling in upcoming meetings, which removed some of the uncertainties faced by investors and eased nervousness.

On the other side of the world, China eased some of its lockdown restrictions which had led to many people in the country protesting, affecting the Asian markets negatively. Together with inflation numbers easing to 7.1% for the US markets, stock markets rallied, but with December posting negative returns the rally was not enough to recover to positive returns for the year. For the fourth quarter of the year, the MSCI World Index was up 9.8%, the MSCI Emerging Markets Index was up 9.7% and the MSCI USA Index up 7% in US dollar total returns. The MSCI India Index was up 2% during the quarter in dollar terms while the MSCI China Index was also up 13.5%.

The MSCI Europe Index was up 19.3% while the MSCI United Kingdom Index was also up 17% in US dollar total returns. As concerns of a potential US recession and the China Covid-19 limitations harming global economies persisted, the outlook for global demand deteriorated, and the oil price fell to US$76 a barrel at the beginning of December, its lowest level in 2022. The brent price ended the quarter at US$85.91 a barrel, a 2.9% increase from the start of the quarter.

US recession concerns pushed the gold price up since its lows in November, and the metal ended the quarter at US$1 824.40, up 9.9% since the beginning of the quarter. The US 10-year Government Bond yield eased from its record 4% level and closed the quarter at 3.8%.