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World Markets Review
World markets review - Fourth quarter 2022

Global stocks rose as investors welcomed signs that inflation may have peaked in key markets around the world. Consumer price increases — while still high on a historical basis — moderated in the U.S., Europe and many other economies, fueling speculation that central banks might not raise interest rates as fast or as far as previously thought.

Nearly all sectors moved higher in the MSCI All Country World Index. Energy, industrials and materials stocks posted strong gains amid hopes that global economic growth would be better than expected in the year ahead. However, pointing to a degree of consumer weakness, the consumer discretionary sector lost about 1%.

Bond markets rallied as the U.S. Federal Reserve (Fed) and the European Central Bank (ECB) both dialed down the magnitude of interest rate hikes. Fed and ECB officials continued to maintain hawkish tones. But after one of the worst years on record for fixed income investors, lower inflation readings and higher yields helped to generate solid returns in most areas of the bond market.

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