Market Wrap: Low expectations (Friday 18 March, 2022)

Welcome to this week’s Market Wrap. After a spell of downward pressure, equity markets have generally been much stronger in the UK, US, Europe and Australia this week. On a 1-year basis, European stocks have understandably struggled most, with the Ukraine/Russia war dominating the backdrop.

Index changes
This Week1 Month1 YearFTSE 100+2.6%-1.7%+8.9%FTSE AIM All Share+2.6%-3.3%+14.5%Samp;P 500+5.7%+1.4%+12.7%FTSEuroFirst 300 (ex-UK)+3.3%-2.5%+5.1%Samp;P/ASX All Ordinaries+2.0%+0.9%+8.1%
Source: Stockopedia, London Stock Exchange
Whether these very recent signs of improvement will continue is far from clear. But if research by the indexing giant Vanguard is accurate, it may not take long as you might think for markets to regain some composure. Their analysis of nearly 25 geopolitical upheavals over the past 60 year shows that equity markets generally start to recover within months of a major event:
Source: Vanguard
Initial sell-offs - which can vary in length - are usually contained to within 5%. Six months later, markets are usually in recovery mode - and then well into double figures at the 12 month mark. But whether these trends repeat amid the current turmoil is far from clear…
What is true is that the huge geopolitical and economic waves caused by this conflict are still yet to...