Timely takes on markets and the economy.
Market Commentary content
With inflation running at a 40-year high, and the Fed having embarked on a rate hike cycle, the burning debate is whether the slowdown ends in a soft landing or a recession.
The energy picture is anything but clear. There are numerous scenarios that could result in much higher or lower oil prices. Until there is more clarity, we think it's prudent to maintain a market-weight Energy sector allocation.
Politics may have little impact on economic globalization or corporate profits—which gives little reason for investors to deglobalize their portfolios despite the headlines.
Stocks have enjoyed a relief rally of late, but conviction is lacking as the rebound has disproportionately favored low-quality segments of the market.
The geopolitical impact on earnings, the most important driver of stock prices, has remained modest so far; global companies appear to be on a path for earnings growth in 2022.
Over the past 70 years, rising government debt generally has been accompanied by weaker economic activity. But it’s not a simple relationship.
Prices have fallen sharply, creating an opportunity for income-oriented investors who can ride out the volatility. Investors should understand the risks, however.