What deglobalization and rising cost of capital mean for equities

Geopolitical rivalry, super spike in oil, and European small-mid opportunities are being watched by Vaughan Nelson CEO.

The invasion of Ukraine has changed the investment outlook for 2022. In this video, Chris Wallis, CEO and Portfolio Manager at Vaughan Nelson Investment Management, offers his views on macro and market consequences.

Highlights include:

  • Invasion of Ukraine brings the geopolitical rivalry between US, Russia, and China to the foreground.
  • Economic slowdown in 2022 may be more abrupt than expected due to the Ukraine crisis.
  • Inflation should remain elevated, but decline later in the year.
  • Energy prices probably don’t retreat significantly from current prices.
  • If key infrastructure in Ukraine is damaged, a super spike in oil prices could occur.
  • As the Federal Reserve begins to shrink its balance sheet, a drawdown in equities is expected.
  • European small- and mid-cap securities may get a tailwind over the intermediate term.
  • Could we see the euro strengthen against the dollar?

This material is provided for informational purposes only and should not be construed as investment advice. The views and opinions expressed are as of March 31, 2022, and may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted, and actual results may vary.

All investing involves risk, including the risk of loss. Investment risk exists with equity, fixed income, and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided.

Commodity-related investments, including derivatives, may be affected by a number of factors including commodity prices, world events, import controls, and economic conditions and therefore may involve substantial risk of loss.

Investments in small and midsize companies can be more volatile than those of larger companies.

Currency exchange rates between the US dollar and foreign currencies may cause the value of the fund's investments to decline.

This material may not be redistributed, published, or reproduced, in whole or in part. Although Natixis Investment Managers believes the information provided in this material to be reliable, including that from third-party sources, it does not guarantee the accuracy, adequacy or completeness of such information.