Global equity markets recorded a strong year in 2021, with a rally in December that pared losses from November’s sell-off ensuring healthy final quarter returns. US equities carried global markets, with the S&P 500 index recording its strongest quarter for the year against the backdrop of robust consumer spending, a rebounding labor market, and monetary policy that remained accommodative.
Looking forward, our primary considerations for 2022 revolve around interest rates and inflation, COVID-19 infection waves/economic reopening, and continued progression of corporate earnings. The market three-way tug of war between reopening cyclical, risk-off, and long-duration growth continues, with the leading performers shifting frequently. In this environment, our positioning is balanced with exposure to quality, sustainable growth companies trading at reasonable valuations that we believe will perform well in this environment. In this edition of our newsletter, our first article provides an overview of Central Bank Digital Currencies (CBDC). We discuss why central banks are focused on them and their potential impact. In the second article, we examine the impact fintech is having on developing economies in Latin America and EMEA.
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