Global shares were mixed on Friday as the last full trading week of the year comes to a close, with looming U.S. inflation data a reminder of how surging prices and interest rates have fundamentally shifted investor thinking over the past 12 months.
Oil prices rose on expectations of a drop in Russian crude supply, helping to offset worries of a hit to U.S. transport fuel demand as a pending deep freeze Arctic storm threatens travel during the Christmas holiday season.
The dollar was steady as strong U.S. data bolstered the case for ‘higher-for-longer’ monetary policy from the Federal Reserve, reversing two decades of cheap money, and making it harder for investors to predict when a pivot in policy will eventually come.
The MSCI All Country stock index (.MIWD00000PUS) was down 0.15%, having fallen about 20% so far this year.
The benchmark has reversed all of its 17% gains in 2021 after central banks hiked interest rates to quell decades-high inflation fuelled by war in Ukraine pushing up energy prices.
The STOXX (.STOXX) index of 600 European companies was up 0.2%, still down more than 12% for the year after gaining 22% in 2021.
Eren Osman, managing director of wealth management at Arbuthnot Latham & Co, said the “seismic shift” in the interest rate environment this year should prompt investors to review their strategic allocations and get ready for more volatility.
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