Umbra WM Quarterly Commentary & Market Outlook_Q3 2022

Contracting global economic growth against a sticky inflationary backdrop are likely to keep financial market conditions and volatility tight and elevated during the final quarter of the year. There is however an increasing chance that we may see more durable signs that inflation has indeed peaked for this cycle as Q4 progresses, which may in turn arrest the decline seen in bond and equity markets since the beginning of the year.

Naturally, the sentiment backdrop remains highly pessimistic with both consumer confidence and investor surveys being the most depressed they have been in the modern era, even eclipsing the depths of the GFC on some measures. It wouldn’t take a great deal for sentiment to shift, however this remains highly contingent on the quarterly corporate earnings season, geopolitical events and Central Bank policy as the final quarter of the year unfolds.