Beating the benchmark – Is the superbubble bursting in 2023?

THIS year started with a rip-roaring rally in the markets. Both US and emerging markets equities bounced over 20 per cent on average; some of the major growth stocks surged by 100 per cent compared to 2022. Bond market yields have fallen dramatically, soothed by the perceived “balm” of falling core inflation.

In recent weeks, we have also witnessed the collapse of tech lenders Silicon Valley Bank, Silvergate Bank and Signature Bank, as well as UBS Group’s state-backed takeover of banking giant Credit Suisse – events that challenge confidence in the banking system.

The earlier calm we experienced has now given way to tumult. The proverb “still waters run deep”, while just cautionary, is a reminder to look even deeper beneath the surface, where there is much turbulence.