A Jumpy June

Monthly Market Snapshot: June 30, 2022

Highlights

The global rout in both in equities and bonds continued in June with investors still jumpy about the prospects of central bank-induced recessions. The MSCI AC World Index, a broad measure of global stocks, tumbled 8.6% - dragging down the year-to-date return to -20.9%. In the United States, both the S&P 500 and the NASDAQ were down over 8.0% while the Dow Jones held up slightly better with a 6.7% decline. European stocks experienced deep losses with the Euro STOXX 50 retreating 11.0%. Global fixed income returns were negative as well with the FTSE U.S. Broad Investment Grade Bond (USBIG) Index suffering a 1.6% loss during the month. Though it should be noted that bond yields have been falling of late as the balance appears to be tilting more towards growth fears than inflation fears.

Our global equity overweight remains focused on commodity hedges like natural resources, oil field services, and other defensive equities. Away from commodities, Citi Global Wealth Investments’ (CGWI) Global Investment Committee prefers companies with a solid track record of earnings and dividend growth (like consumer staples). We also believe that investors may wish to consider adding long-duration Treasuries (such as the 30-year U.S. Treasury) with yields likely to peak in 2022. We think that this type of defensive portfolio position may be suitable given the current backdrop.