Q4 2022 Update

OVERVIEW The third quarter began with a broad rebound in risk assets. The global equity market regained +13% from its June lows by mid-August. However, sentiment turned again and markets have been volatile since. Year-to-date the global stock market is down near-26%. Emerging markets fared worse, down close to -28%. The losses are broad even … Continue reading Q4 2022 Update

How to Know if The Bear Market is Ending

The bear market of 2022 feels more painful than usual because of how broad the selloff has been. From stocks to bonds, to real estate, to cryptocurrency, it seems like there's nowhere to hide. We're all hoping for a bottom in stocks, but hope itself will not help us find one. Fortunately, there are indicators … Continue reading How to Know if The Bear Market is Ending

Not Yet Broken

Equity markets bounced in June, reinvigorated by strong employment data, "no recession" calls from key policymakers, and hopes the Fed would "pivot" away from aggressive rate hikes. Some believed June marked the bottom and we were starting a new bull market. I wasn't convinced by policymakers and wrote markets may want to hold the champagne … Continue reading Not Yet Broken

A Familiar Song & Confetti

Today, Chairman Powell reiterated the US is not in recession and will continue to grow in the second half of 2022. Other public officials agree, US Treasury secretary Yellen and US President Biden recently affirmed their own "no recession" opinions. The argument emphasizes a strong labor market and an unemployment rate that hovers near the … Continue reading A Familiar Song & Confetti

Q3 2022 Update

MARKET OVERVIEW The global sell-off in financial markets accelerated during Q2. Global equities officially entered a bear market, breaching the technical definition of a -20% decline. US stocks were down most, but all major equity regions were down double digits year-to-date. Even the US bond market was off by -10% for the year. Figure 1: … Continue reading Q3 2022 Update

A Matter of Perspective

The NASDAQ is down almost -30% from its November 2021 highs. Unlike the pandemic drawdown, this sell-off doesn't have a clear catalyst. It's unfolding in fits and starts and has investors pointing at a growing list of potential causes - rising rates, a tightening Fed, inflation, slowing growth, high valuations, disappointing guidance, etc. Whatever the … Continue reading A Matter of Perspective

Splitting Straws on Recession

I've been paying close attention to the US Treasury yield curve since last year because it is, historically, a reliable bellwether for economic conditions. After threatening an inversion for months, the 2-10 year curve finally did so in late March. The inversion was short-lived, however, lasting only days. Figure 1: 2-10 Year Treasury Curve It … Continue reading Splitting Straws on Recession

Q2 2022 Update

QUARTER IN REVIEW Q1 was a bumpy ride for investors. Global equity market prices (MSCI ACWI) swung from being down almost -13% to only down about -6% for the quarter. However, the negative returns were broad. All major equity regions and even the US bond market were down YTD. Figure 1: Global Markets YTD MACRO … Continue reading Q2 2022 Update