Policy uncertainty is a pain point that continues to spook investors, the calendar year return was relatively unsatisfactory. Still, Chinese markets slightly rebounded in the last month of the year, both the Shanghai Composite and CSI 300 Index gained 2.13% (2.26% in US$ terms) and 2.24% (2.38% in US$ terms) respectively over the month of December, whereas the Hang Seng Index continued to slide under the regulatory pressure, shedding 0.33% (0.34% in US$ terms).

US markets rebounded with thin trading during holiday season. Early reports have seemingly concluded that the Omicron variant could pose less of a concern, lifting market sentiment. Over the month of December, all 3 equity indices posted gains, the NASDAQ, the S&P 500, and the Dow gained 0.69%, 4.36%, and 5.38%, with the latter 2 setting new record highs during the month.

Weekly Insight January 14

Weekly Insight January 7

With the numerous global central banks expecting that inflation would be here to stay, monetary tightening is a foregone consensus, markets continue to price in the impacts of expected rate hikes. Over the month of November, Bloomberg Barclays Global Aggregate, US High Yields, and Emerging Markets US Dollar Bonds were down 0.29%, 0.97%, and 1.07% respectively, while US Investment Grades still managed to edge 0.06% higher.

The Japan market fell back in line with global markets over the month of November. As with other global markets, the fear of the new Omicron variant sent the market falling towards the end of the month. The Nikkei 225 was 3.71% lower (2.87% in US$ terms), while the TOPIX was also 3.64% down (2.80% in US$ terms).

Flurry of negative news hit the market, the continued inflation and the resurgence of the pandemic in particular were big pain points, which affects the EM outlook. Over the month of November, EM equities fell in line with global markets, MSCI emerging markets index lost 4.14%.

Anticipation of the supply chains disruptions resolving gave a boost to the market. However, the unexpected resurgence of COVID in form of the new highly mutated Omicron variant, together with the rising inflation, STOXX 600 index fell significantly towards the end of the month, losing 2.64% (4.56% in US$ terms) over the month of November.