Sycomore I Portfolio Manager Comment Sycomore Sélection Responsable

MARKET ENVIRONMENT

In April, the world’s main stock markets declined amid high market volatility (VIX at 28.9 and V2X at 29.6). European markets suffered more modest losses than their American counterparts, which recorded substantial declines (-8.8% for the S&P 500 and -13.3% for the Nasdaq, its worst monthly loss since October 2008). Fears of a global economic slowdown have intensified with multiple sources of concern hitting investors concomitantly on various fronts.

Inflation readings have continued to reach new record highs (+8.5% year-over-year in March in the United States, a 40-year high, and +7.4% in Europe) and central banks are attempting to contain rising prices with increasingly strong monetary tightening policies. As a result, sovereign yields continued to rise with 10-year rates in the US exceeding 3% in April for the first time since 2018. The Bund closed the month at 0.937%. Against this backdrop, high growth plays – which are more sensitive to rising rates – suffered more than average. The Euro Stoxx Total Market Growth index dipped by -3.58% in April while the EuroStoxx Total Market Value index shed only -0.32%.

The war in Ukraine is dragging on and verbal threats are escalating. Investors are concerned over the economic consequences of the conflict, particularly in the event of gas supplies being cut off.

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