The negative market sentiment from the second half of August continued during September. The Stockholm SAX index fell close to 7.5% and the Nasdaq exchange in the US by just over 10%, which means that they have both lost just over 30% year to date. The declines are largely due to rising inflation, hawkish central banks and concerns about a coming recession. During the month, both the FED and the ECB raised the interest rate by 75 basis points, the Swedish central bank by 100 basis point. The market responded by weakening the SEK further, which shows a concern that rising policy rates could throw Sweden into a recession. However, the labour market remains strong and the profit warnings we have seen so far are mainly linked to companies in the consumer sector. The real estate sector is also facing major challenges with difficulties in securing future financing – many Swedish real estate companies are down between 50-80% year to date. In Sweden, the right wing block got enough votes to form a government, in Italy the Brothers of Italy was the winning party.