Time to batten down the hatches: The business press is warning of coming storms on all fronts. Investors should prepare for potentially extreme movements in the markets as central banks end years of easy monetary policy to curb inflation, writes James Mackintosh in the Wall Street Journal. As the US Federal Reserve focuses on fighting inflation, Chairman Jerome Powell said he wouldn’t “declare victory” over inflation until it has been falling for months and spoke of the need to figure out which level of interest rates will slow the economy. This likely means that the Fed will continue hiking rates until “something breaks,” Mackintosh writes.

Don’t expect any quick fixes: One Fed official yesterday said it could take “a couple of years” for inflation to fall back to the US central bank’s 2% target, the Financial Times reports.

This is more than just a strategy shift — its a sea change for policy: The Fed’s move to hike rates marks an end to decades of easy money policy ready to back the markets whenever they wobbled, the Washington Post says, heralding the start of tougher times ahead for almost every asset class and corner of the economy.

And it’s not just VCs who are bunkering down for the nuclear winter: Private equity giants are getting nervous, too, as the cheap borrowing used by the industry to fund a transactions spree over the past two years comes to an end, the Financial Times reports. New buyout funds are now struggling to find new cash, while listed firms have seen their share prices fall heavily since November. “This is a time of reckoning for our industry,” said Phillip Freise, co-head of European PE at KKR.

None of this bodes well for stock markets: IPOs are on track for the weakest first half since 2005, according to data compiled by Bloomberg, which counts just USD 198 bn worth of IPOs and follow-on sales raised so far this year.

On the bright side: Many see M&A activity continuing in earnest despite fears of a recession because companies cannot afford to ignore disruptions in their industries from new technologies, experts at one of Wall Street’s top investment banks, Centerview, tell the Financial Times. Centerview expects M&A activity this year to match the record USD 4 tn achieved in 2021, as companies look to add new, innovative products and services to their portfolio to stay ahead of the competition, representatives from the bank tell the salmon-colored paper. Global M&A volumes hit USD 1.88 tn in the first five months of the year, down from USD 2.92 tn in 2021 but still above pre-pandemic levels of USD 1.57 tn, Refinitiv data shows.

Also worth noting:

• Eni gets a piece of Qatar’s mega gas project: Italian energy firm Eni has acquired a stake in Qatar’s USD 29 bn North Field East (NFE) expansion project, becoming the second foreign firm to invest in the expansion project after TotalEnergies. (Statement)

THE CLOSING BELL-

The EGX30 fell 1.4% at yesterday’s close on turnover of EGP 431 mn (48.7% below the 90-day average). Foreign investors were net sellers. The index is down 18.6% YTD.

In the green: Abu Dhabi Islamic Bank Egypt (+3.5%), Cleopatra Hospitals (+2.3%) and Housing and Development Bank (+0.5%).

In the red: Qalaa Holdings (-4.7%), GB Auto (-4.5%) and MM Group (-4.2%).

Asian markets are showing a mixed picture in early trading this morning and futures suggest a similarly checkered start for European markets, while Wall Street looks set to open in the green across the board later on today.