March 2022: The Fog of War
“There are some things you learn best in calm, and some in storm.” -Willa Sibert Cather
Russia’s attack on Ukraine has injected material uncertainty into the capital markets. Risk appetites have disappeared, and financial conditions have tightened, driven primarily by the spike in commodity prices. The world has settled into an uncomfortable war of attrition, with investors pondering the circumstances and timing of de-escalation or worsening global economic drag. Encouragingly, the invasion and corresponding market correction are happening against a backdrop of strong economic growth and record corporate profitability.
February 2022: Getting Comfortable With Being Uncomfortable
“Worry never robs tomorrow of its sorrow, it only saps today of its joy.” - Leo Buscaglia
From monetary and fiscal policy headwinds to Covid and supply chain tailwinds, we continue to see 2022 as a transformational year. The capital markets are adjusting to a more normalized backdrop, and volatility is the uncomfortable companion going along for the ride. Encouragingly, the adjustments (e.g., interest rates, growth rates, valuations, etc.) are happening against a backdrop of strong economic growth and record corporate profitability. Investors are skeptical, but in time, should get comfortable with the new backdrop.
January 2022: The Winds of Change
“It is better to know some of the questions than all of the answers.” - James Grover Thurber
After a run of historically low-interest rates, catalyzed by accommodative monetary and fiscal policy, signs are emerging that change is in the air as we move into 2022. Encouragingly, that change is happening against a backdrop of strong economic growth and record corporate profitability. From monetary and fiscal policy to Covid trends and supply chains, we see 2022 as a transformational year. How should investors be positioned as the winds of change blow through the capital markets?
April 2022: Braking, Not Breaking
“You’ll never find a rainbow if you are looking down.” - Charlie Chaplin
Financial conditions are tightening, spearheaded by the Fed’s desire to slow growth and keep inflation in check. Bond yields have surged higher, and commodities have spiked as the volatile geopolitical backdrop adds to an already anxious investor base. Encouragingly, the developments are happening at a time of strong employment and record corporate profitability that should blunt the sting of a more restrictive policy. We see the economy braking, but not breaking.
Previously in the Market