Stocks ended a wild week in positive territory. But volatility is likely to persist

The most important stock exchanges in Asia, Europe and North America have had a truly contradictory week. Its first half was marked by significant fluctuations in the main indices, and on Thursday a wave of selling arrived on the markets. However, during Friday’s trading, the exchanges partially corrected their previous losses.

The pessimistic mood of investors that has spread on the stock exchanges has practically two main causes: the rising inflation rate and the resulting fears of tightening monetary policy, and the ongoing war in Ukraine. Yet inflation and the war in Eastern Europe appear to be largely connected vessels.

Russian aggression has a direct impact on energy prices, which supply the western part of Europe, and also on grain prices, as Ukraine will not be able to supply this agricultural commodity to traditional markets such as the Middle East or the northern part of Africa.

The major central banks, which until recently have been cool to rising inflation, are gradually realising that its causes are not a short-term issue and are therefore preparing to take decisive action. The US Fed has already raised rates several times, as has the Bank of England, and the European Central Bank, which has so far more or less ignored accelerating inflation, is also preparing to act.

The major central banks, which until recently have been cool to rising inflation, are gradually realising that its causes are not a short-term issue and are therefore preparing to take decisive action. The US Fed has already raised rates several times, as has the Bank of England, and the European Central Bank, which has so far more or less ignored accelerating inflation, is also preparing to act.

For equity markets, this will mean a significant reduction in liquidity inflows and therefore a dampening of demand for this type of asset, which will create downward pressure on its price. Stock indices such as the S&P, Nasdaq, Stoxx 600, Shanghai Composite, Nikkei or Hang Seng are therefore fluctuating more than usual.

Při zvažování investic do akcií je nutné brát v potaz v mnohem větší míře fundamentální faktory a pečlivě vybírat konkrétní tituly, jež jsou aktuálním vývojem ovlivněny pozitivně. Může se to týkat těžařských, potravinářských, ale i zbrojařských firem. Minimálně na nějakou dobu vstupujeme do časů, kdy na akciových trzích nebude možné vypozorovat jednoznačný trend vývoje.

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