Mawer Quarterly Investment Newsletter | Mawer Investment Management Ltd.

Fourth Quarter | 2022

Equity markets had a positive return in the fourth quarter offering a brief reprieve from the turmoil that roiled markets in 2022—although December saw many give back some of these gains. And, after one of the worst years on record, Canadian bonds finished near flat for the quarter. In the end, 2022 goes down as a difficult year for financial markets dominated by widespread inflation, higher interest rates, geopolitical tensions, and global growth concerns.

Third Quarter | 2022

Numerous equity markets declined (in local currency terms) during a volatile third quarter, despite some optimism early in the period that led to a brief rally. Many central banks have continued to hike interest rates and the U.S. Federal Reserve has been unequivocal about its plan to fight inflation; ultimately, how far and how fast the U.S. Federal Reserve will go has been a key factor driving markets.

Second Quarter | 2022

Investors have had a punishing year so far in 2022, and in the second quarter there were even fewer places to hide. Many themes from the beginning of the year have persisted, most notably inflation continued to reach multi-decade highs.

First Quarter | 2022

2022 started with a difficult and volatile period for financial markets globally. The long rally in equities, since the COVID-19 recession, came under stress with central banks turning more hawkish towards inflation. This was compounded by the uncertainties caused by the war in Ukraine including the resulting impact on commodity markets.

Fourth Quarter | 2021

Global equity markets performed strongly in the fourth quarter of 2021, as generally strong company earnings releases outweighed any market nervousness over the potential accelerated tightening of monetary policy. An exception was emerging markets, which continued to face headwinds in China related to regulatory changes and imbalances in the property market (heavily indebted property developers). Canadian bonds also finished the quarter with positive returns.

Third Quarter | 2021

Equity market returns were mixed in the third quarter with some regions posting gains and others modest losses, after a difficult September gave back some of the strength from earlier in the period. Weakness in emerging markets was notable, as increased regulatory risk in China triggered headwinds for the market. Canadian bond returns were also modestly negative as yields rose late in September.

Second Quarter | 2021

The positive performance of global equities continued into the second quarter of 2021 and economic growth expectations picked up in parts of the world, though the recovery in some regions faced headwinds due to an uneven vaccine rollout. Expanding economic activity drove the continued oil price rally and the Canadian dollar gained against the U.S. dollar and numerous other major currencies.

First Quarter | 2021

The strong performance of global equities continued in the first quarter, fueled, as it was in the fourth quarter, by progress on COVID-19 vaccination programs and the relaxation of pandemic-led restrictions in parts of the world. Due to an improving public health situation and the flood of easy money from unprecedented monetary and fiscal stimulus, many countries appear ready for a rapid economic recovery. But recovery expectations have investors bracing for inflation, leading to a spike in developed-market bond yields that spurred market volatility, though it did not halt investors’ enthusiasm for equities.

Fourth Quarter | 2020

Looking back on a year beset by the coronavirus pandemic, the market’s performance stands out for its incredible comeback from the virus-induced crash in March. The pandemic has left economies reeling as lockdowns have dealt some businesses a severe blow with uncertain prospects for recovery, and millions of people are still relying on government support to make it through a precarious employment period. Yet despite targeted restrictions that could be in place for months to come and many countries grappling with surging COVID-19 infections, investors propelled global stock markets to record highs in the fourth quarter.

Mawer Quarterly

First Quarter | 2023