Investors’ optimism has started to wane as inflation expectations have once again changed – as an example, the latest US jobs report shows that hiring activity was three times stronger than the market expected. Big business leaders have also commented, highlighting that while the labour market is tight, they are not finding hiring as hard as expected.
In contrast to the bleak returns of last year, nearly all asset classes are in positive territory for 2023. Investors are searching for the positives in any news, and this is being reflected in markets.
As much as we may need it, a boring year where nothing much happens does not exist, as evidenced by the events of last year.
Over the past year markets have experienced heightened volatility, mainly due to macro-economic factors.