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  • Christian Armbruester


It has been a very strange start to the year. Here in the UK, there is a strike of some sort on every day, it has rained non-stop and what it has meant is we stayed at home for just a little while longer. As such, it doesn’t really feel like the new year has begun just yet, but tell that to the markets.

Equities have been on a tear since the opening bell, particularly in Europe. The Euro Stoxx is up 10%, and the FTSE is ahead by more than 15%, trading at the all-time high (yes, you read that correctly). The US, as ever is not far behind and the S&P500 is flirting with overcoming the last resistance in trend of its 2022 decline.

The technicals look amazing. There are breakouts everywhere and momentum is strong. Volumes have been decent, retail flows are back, meme stocks are flying high, and other risk-on assets are in strong demand. Cryptocurrencies are up 25% since the beginning of the year.

Can this rally continue? It most certainly can, and one just needs to look at the US$, which is far from its peaks against most major currencies. That’s a good thing for the global economy. China reopening another. Fixed income markets have also found a bid and commodities look cheap, which could be even better.

What about the tight labour markets, falling productivity, lower earnings, deglobalisation, persistent inflation, the cost of living crisis, strikes, global warming, and the risk of nuclear war or worse, Liz Truss making a political comeback? That’s what makes a market.


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