Aperture European Innovation Fund - Q2 2022 Commentary
Anis Lahlou, CFA
Chief Investment Officer based in Aperture’s London office
Aperture European Innovation: Commentary for Q2 2022
Two FOMC hikes later and 10% lower
Here we are, we have closed the second quarter and the first half of the year with the European equity market down 13.8% YTD.3 All of the market rally staged in late Q1/March was given back in May and June as market participants eventually digested two FOMC meetings; and just two FOMC meetings seem to be all it took for us to bid farewell to “stagflation” and replace it with the new macro topic du jour: “recession”!
Chronologically, the Fed first hiked rates +50bps on Wednesday 4-May, and on this occasion, the market tantrum came in a slightly delayed form on the following Friday and Monday. Then the following month, the Fed announced another faster rate hike of +75bps on Wednesday 15-Jun, and this time the market reaction happened in anticipation a week earlier on Friday 10-Jun with the higher US CPI data for the month of May acting as the precursor for imminent, more restrictive policy.