Market Insights: This is not the start of a bear market

Story of the day

Fed chair Jerome Powell recently maintained that quantitative easing would end in March, and signalled for imminent policy rate hikes in the coming months. However, his stance on being “nimble” on inflation as well as his refusal to rule out more aggressive rate hikes drove sharp overnight spikes in US Treasury yields and triggered equity selloffs.

So is this the start of a bear market? We think not.

What does this mean for your portfolio?

The market’s ongoing obsession with Fed monetary tightening will eventually fade to the back burner as expectations get increasingly priced in. Instead, investors will divert their attention to corporate earnings and we are particularly upbeat on the Technology-related space. Global technology leaders have demonstrated their ability to produce superior earnings relative to the broader industry, and this is evident from the current earnings season.