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World Markets Review
World Markets Review for third quarter 2022
Global stocks declined for a third consecutive quarter, pressured by high inflation, rising interest rates and recession fears in many countries. Following a robust summer rally, stocks resumed a sharp selloff in mid-August as inflation soared and central banks around the world reconfirmed their commitment to tighten monetary policy.
All sectors of the MSCI All Country World Index lost ground, led by a steep drop among communication services stocks. The rate-sensitive real estate and utilities sectors also fell sharply. Energy and consumer discretionary stocks posted relatively better returns, though both sectors slipped during the quarter. A strong U.S. dollar put added pressure on international and emerging markets.
Bond markets tumbled as the U.S. Federal Reserve and many other central banks moved aggressively to hike interest rates amid mounting inflationary pressures. In some major economies, consumer prices rose by 8% to 10% annualized, surpassing 40-year highs. The European Central Bank raised rates for the first time in more than a decade, ending an era of negative rates in the eurozone.
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MSCI indexes are free-float-adjusted, market-capitalization weighted indexes. Developed market index results reflect dividends net of withholding taxes. Emerging market index results reflect dividends gross of withholding taxes through December 31, 2000, and dividends net of withholding taxes thereafter. Each index is unmanaged, and its results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes. MSCI All Country World Index (ACWI) is designed to measure results of more than 40 developed and emerging equity markets.
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