# How 2022 shocked, rocked and rolled global markets
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-12-30
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: 2022 Global Market Turmoil: Trillions Wiped Off - What
Meta Description: Trillions wiped off stocks, currency chaos, crypto empire collapses - Key insights on record interest rate hikes & market upheavals.
URL: https://financedigest.com/how-2022-shocked-rocked-and-rolled-global-marketshtml

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By Marc Jones

LONDON (Reuters) – Trillions of dollars wiped off world stocks, bond market tantrums, whip-sawing currency and commodities and the collapse of a few crypto empires – 2022 has been perhaps the most turbulent year investors have ever seen, and for good reason.

Tallying the final numbers is useful but doesn’t even come close to telling the whole story.

Yes, [global equities are down $14 trillion and heading for their second worst year](https://www.financedigest.com/2021-the-year-of-the-global-workforce-for-british-small-businesses.html "2021: The Year of the Global Workforce for British small businesses ") on record, but there have been nearly 300 interest rate hikes and a trio of 10%-plus rallies in that time making the volatility freakish.

The main drivers have been the war in Ukraine, combined with rampant inflation as [global economies](https://www.financedigest.com/global-economy-seen-facing-a-challenging-year-eurochambres.html "Global economy seen facing a challenging year -Eurochambres") broke out of the pandemic, but China remained shackled by it.

U.S. Treasuries and German bonds, the benchmarks of global borrowing markets and traditional go-to assets in [troubled times](https://www.financedigest.com/why-manufacturers-mustnt-lose-their-green-focus-in-troubled-times.html "WHY MANUFACTURERS MUSTN’T LOSE THEIR GREEN FOCUS IN TROUBLED TIMES"), lost 16% and 24% respectively in dollar terms.

DoubleLine Capital’s Jeffery Gundlach, dubbed the ‘Bond King’ in the markets, says conditions got so ugly at points that his team found it almost impossible to trade for [days at a time](https://www.financedigest.com/love-in-a-time-of-inflation-how-much-will-valentines-day-set-you-back.html "Love in a time of inflation: how much will Valentine’s Day set you back?").

“There has been a buyer’s strike,” he said. “And understandably so because prices have just been going down until recently.”

Graphic: Seismic shifts – https://www.reuters.com/graphics/GLOBAL-MARKETS/egpbyyqjdvq/chart.gif

![](https://www.globalbankingandfinance.com/wp-content/uploads/2022/12/1m.gif)

Drama kicked in as soon as it became [clear that COVID was not going to shutter the global economy again and the world’s](https://www.financedigest.com/whats-coming-next-in-the-clearing-and-settlement-world.html "What’s coming next in the clearing and settlement world?") most influential central bank, the U.S. Federal Reserve, was serious about [raising interest rates](https://www.financedigest.com/bank-of-england-raises-rates-to-3-5-says-inflation-has-peaked.html "Bank of England raises rates to 3.5%, says inflation has peaked").

Ten-year Treasury yields jumped to 1.8% from less than 1.5%, knocking 5% off MSCI’s [world stocks](https://www.financedigest.com/world-stocks-cling-to-upbeat-mood-dollar-stalls.html "World stocks cling to upbeat mood, dollar stalls") index in January alone.

That yield is now at 3.68%, stocks are down 20% while [oil prices](https://www.financedigest.com/oil-prices-stable-heading-for-weekly-gain.html "Oil prices stable, heading for weekly gain") surged 80% before giving it all up. The Fed has delivered 400bps of hikes and the European Central Bank a record 250bps, despite [saying this time last year](https://www.financedigest.com/uk-to-avoid-recession-this-year-but-outlook-still-weak-bcc-says.html "UK to avoid recession this year but outlook still weak, BCC says") it was unlikely to budge.

The dollar has risen almost 9% against the main world currencies, and 12.5% against the Japanese yen even after a last minute [Bank of Japan surprise this week gave the yen a lift](https://www.financedigest.com/asian-stocks-rally-as-bank-jitters-calm-alibaba-lifts-mood.html "Asian stocks rally as bank jitters calm, Alibaba lifts mood").

In emerging markets, Turkey’s inflation and monetary policy problems have cost the lira another 28%, but its [stock market](https://www.financedigest.com/compelling-tips-to-make-profitable-investments-in-the-stock-market.html "Compelling Tips to Make Profitable Investments in the Stock Market") is the best performer in the world.

Hard-pressed Egypt devalued its currency more than 36%. Ghana’s cedi crashed 60% as it has joined [Sri Lanka](https://www.financedigest.com/doctors-bankers-protest-impossible-situation-as-sri-lanka-runs-out-of-fuel.html "Doctors, bankers protest ‘impossible situation’ as Sri Lanka runs out of fuel") in default. Despite being well down from its June highs, Russia’s rouble is still the [world’s second-best performing currency supported](https://www.financedigest.com/uk-gives-bbc-world-service-20-million-pounds-to-support-english-language-broadcasting.html "UK gives BBC World Service 20 million pounds to support English language broadcasting") by Moscow’s capital controls. It was initially smashed after the invasion of Ukraine.

Graphic: [Dollar strength dominates FX markets](https://www.financedigest.com/deutsche-bank-equity-bear-market-rally-will-stretch-into-2023-dollar-weaker.html "Deutsche Bank: Equity bear market rally will stretch into 2023, dollar weaker") – https://www.reuters.com/graphics/GLOBAL-MARKETS/zdpxddkarpx/chart.png

![](https://www.globalbankingandfinance.com/wp-content/uploads/2022/12/1m1-373x500.jpg)

If you ask me what will happen next year I [really couldn’t tell you,” said Close Brothers Asset Management’s](https://www.financedigest.com/with-the-right-active-manager-you-really-do-get-what-you-pay-for.html "With the Right Active Manager, You Really Do Get What You Pay For") Chief Investment Officer Robert Alster, who, like many, also pointed to the pummeling the pound and British bond markets took when the short-lived government of Liz Truss flirted with an unfunded spending splurge.

Ten-year gilt yields [soared over 100 bps and the pound lost 9% in a matter of days – moves the scale of which are rare in major markets](https://www.financedigest.com/hungarys-booming-wedding-market-doused-by-soaring-inflation.html "Hungary’s booming wedding market doused by soaring inflation").

“If you sell it wrong, don’t be surprised if it goes down like a cup of cold sick,” said veteran CMC Markets’ analyst Michael Hewson.

TECH PROBLEMS

The [surge in rates](https://www.financedigest.com/boes-bailey-speaks-about-surging-inflation-and-rate-hikes.html "BoE’s Bailey speaks about surging inflation and rate hikes") has also taken $3.6 trillion off the tech titans. Facebook and Tesla have both hemorrhaged more than 60% while Alphabet’s Google and Amazon are respectively down 40% and 50%.

Chinese stocks have staged a late [rally thanks to signs that its zero-COVID policy’s days are numbered but they are still down 25% and emerging market](https://www.financedigest.com/jittery-markets-attempt-risk-on-rally-while-waiting-for-powell.html "Jittery markets attempt risk-on rally while waiting for Powell") ‘hard currency’ government debt will notch its first ever back-to-back loss.

Graphic: $14 trillion wiped of value of [world stocks](https://www.financedigest.com/world-stocks-rally-nikkei-closes-at-33-year-peak.html "World stocks rally, Nikkei closes at 33-year peak") – https://fingfx.thomsonreuters.com/gfx/mkt/znvnbbqdbvl/Pasted%20image%201671611348378.png

![](https://www.globalbankingandfinance.com/wp-content/uploads/2022/12/1m2-667x500.jpg)

Initial public offerings and bond sales have also slumped almost everywhere apart from the Middle East, while commodities have been the best performing asset class for a [second consecutive year](https://www.financedigest.com/ericssons-board-rebuked-by-shareholders-at-agm-for-second-year-in-a-row.html "Ericsson’s board rebuked by shareholders at AGM for second year in a row").

Natural gas’ more than 50% rise is the best overall in that group, albeit largely due to the war in Ukraine which had hoisted prices 140% at one point.

Mounting recession worries along with the West’s plan to stop [buying Russian oil mean Brent has given back](https://www.financedigest.com/uks-bellway-to-buy-back-shares-hike-social-housing-output.html "UK’s Bellway to buy back shares, hike social housing output") the entire 80% it made in the first quarter, as have wheat and corn.

Graphic: The prices of war – https://fingfx.thomsonreuters.com/gfx/mkt/lgvdkkzjmpo/Pasted%20image%201672392863703.png

![](https://www.globalbankingandfinance.com/wp-content/uploads/2022/12/1m3-661x500.jpg)

The cryptomarket has been even more chaotic. Bitcoin [ends 2022 robbed of its cocktail of cheap money and leveraged bets](https://www.financedigest.com/analysis-investors-stick-to-bets-on-early-end-to-ecb-hikes-as-uncertainty-grows.html "Analysis-Investors stick to bets on early end to ECB hikes as uncertainty grows").

The pre-eminent cryptocurrency has lost 60% of its value, while the [wider crypto market](https://www.financedigest.com/hsbc-appoints-new-markets-head-amid-wider-investment-bank-reshuffle.html "HSBC appoints new markets head amid wider investment bank reshuffle") has shrunk by $1.4 trillion, squashed by the collapse of Sam Bankman-Fried’s FTX empire, Celsius and supposed ‘stablecoins’ terraUSD and Luna.

What has gone in [global markets](https://www.financedigest.com/2017-global-property-market-predictions-insights-from-the-experts.html "2017 global property market predictions – insights from the experts") this year has been traumatic,” said EFG Bank Chief Economist and ex-Deputy Governor of Ireland’s central bank, Stefan Gerlach.

But if central [banks hadn’t underestimated the rise](https://www.financedigest.com/sterling-rises-as-receding-bank-sector-worries-lift-sentiment.html "Sterling rises as receding bank sector worries lift sentiment") in inflation so dramatically and had to jack up interest rates, it wouldn’t have been so catastrophic.

Graphic: A dramatic year for [global markets](https://www.financedigest.com/global-bank-bonds-claw-back-losses-as-markets-rout-eases.html "Global bank bonds claw back losses as markets rout eases") – https://www.reuters.com/graphics/GLOBAL-MARKETS/lgvdkkajzpo/chart.png

(Reporting by Marc Jones, additional graphics by Vincent Flasseur and Pasit Kongkunakornku; Editing by Emelia Sithole-Matarise)


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