Written by Cormac Nevin.
If the lay observer had followed the headlines on BBC News over the course of March, and attempted to apply them to what they could reasonably expect from markets over the course of the month, they might well end the month a little bit perplexed. One of the top performing market components over the month was the NASDAQ 100 Index of US technology companies, which returned +9.5% in local terms (+7.3% in GBP) during a month whereby the specialist Silicon Valley Bank collapsed into ignominy. While larger tech names have proved to be a safe haven of sorts, it does beg questions of the operating environment for some of their smaller and more dynamic peers.
This was followed by ongoing distress in multiple other small- and medium-sized US lenders such as Signature Bank. In Europe, the knock-on effect in confidence culminated in the coerced purchase of Credit Suisse by UBS, a bank which is one of the largest in the world. Again, markets were not particularly fazed by this, with the S&P 500 Index of broad US equities finishing the month strongly and returning +1.5% for the month and the MSCI Europe Ex-UK Index up +1.3%, both in GBP terms.
While markets in recent weeks were up despite negative headlines, it remains critical to not be complacent and retain diversified exposures. Macro volatility could be back.