Charles-Henry Monchau

Chief Investment Officer




Hawkish Fed Sparks Dow's Worst Streak Ever

The Fed’s most aggressive rate hike (+75bp) since 1994 raised recession fears and sent stocks sharply lower for a 2nd consecutive week. The S&P 500 Index recorded its worst weekly decline since March 2020 and entered a bear market, ending the week nearly 24% below its January peak. Meanwhile, the Dow Jones has now had 11 down weeks out of the last 12. This has never happened before. While US stocks rallied after the FOMC rate decision, the mood on Wall Street worsened on Thursday on the back of weak macro numbers. Indeed, several reports (housing starts, building permits) indicated that the US housing sector was already feeling the impact of Fed tightening and the surge in mortgage rates. Moreover, US retail sales were lower than expected while weekly jobless claims came in higher than expected. Inflation and rate fears pushed the yield on the 10-year US Treasury briefly to 3.49% on Tuesday (highest in more than a decade) before retreating to 3.24% by the end of the week. Shares in Europe fell sharply on concerns that economic growth may stall after several central banks announced rate increases. The SNB unexpectedly raised interest rates for the 1st time in 15 years, by 50bps to -0.25%. The BoE raised rates to 1.25% (+25bps). Meanwhile, The ECB held an unscheduled meeting and indicated it would take action to stem the widening yield spreads between member states’ sovereign bonds. Chinese stocks rallied. Cryptos had  their worst week since March 2020.



This marketing document has been issued by Bank Syz Ltd. It is not intended for distribution to, publication, provision or use by individuals or legal entities that are citizens of or reside in a state, country or jurisdiction in which applicable laws and regulations prohibit its distribution, publication, provision or use. It is not directed to any person or entity to whom it would be illegal to send such marketing material. This document is intended for informational purposes only and should not be construed as an offer, solicitation or recommendation for the subscription, purchase, sale or safekeeping of any security or financial instrument or for the engagement in any other transaction, as the provision of any investment advice or service, or as a contractual document. Nothing in this document constitutes an investment, legal, tax or accounting advice or a representation that any investment or strategy is suitable or appropriate for an investor's particular and individual circumstances, nor does it constitute a personalized investment advice for any investor. This document reflects the information, opinions and comments of Bank Syz Ltd. as of the date of its publication, which are subject to change without notice. The opinions and comments of the authors in this document reflect their current views and may not coincide with those of other Syz Group entities or third parties, which may have reached different conclusions. The market valuations, terms and calculations contained herein are estimates only. The information provided comes from sources deemed reliable, but Bank Syz Ltd. does not guarantee its completeness, accuracy, reliability and actuality. Past performance gives no indication of nor guarantees current or future results. Bank Syz Ltd. accepts no liability for any loss arising from the use of this document.

Read More

Straight from the Desk

Syz the moment

Live feeds, charts, breaking stories, all day long.

Thinking out loud

Sign up for our weekly email highlighting the most popular posts.

Follow us

Thinking out loud

Investing with intelligence

Our latest research, commentary and market outlooks