Investment Review & Outlook – July 2024
Key Takeaways While the US economy has remained resilient in 2024 due to a strong labor market and moderating inflation, there are several indications that growth is beginning to slow, although not enough to bring about a recession. Despite rich valuations and concentrated performance, the equity market reached new highs propelled by select AI-related stocks and…
Read MoreInvestment Review & Outlook – April 2024
Key Takeaways US economic growth has proved remarkably resilient during the first quarter of the year, primarily due to low unemployment giving consumers the confidence to keep spending. The strength in the economy has moderated the decline in the inflation rate, keeping the Fed on hold so far this year, and dampening investor expectations for…
Read MoreInvestment Review & Outlook – January 2024
Key Takeaways Investors have priced in an optimistic soft-landing scenario, but our expectation is for a slowdown or mild recession in early 2024 as the economy continues to feel the effects of two years of sharp Fed tightening. Despite slowing economic growth, lower short-term interest rates and an acceleration in corporate profit growth have the…
Read MoreInvestment Review & Outlook – October 2023
Key Takeaways Despite the tight monetary policy of the last year and a half, the labor market, and therefore the US consumer, have remained strong. This has pushed out the timeframe for a recession, but we do not believe it has removed the likelihood of one. Hawkish guidance by the Federal Reserve indicating that rates…
Read MoreInvestment Review & Outlook – July 2023
Key Takeaways The US economy has remained fairly strong, delaying the onset of a recession resulting from the Federal Reserve increasing interest rates 10 times over the last year. A mild recession is our base case as we expect the interest rate environment will slow economic growth eventually, increasing financial pressure on consumers and corporations…
Read MoreInvestment Review & Outlook – April 2023
Key Takeaways Both stocks and bonds managed to post gains for the quarter, despite a banking crisis, interest rate increases, and geopolitical concerns. This is a welcome relief following a challenging 2022 and ongoing volatility that has continued in 2023. Our forecast for a mild recession late in 2023 has been pulled forward due to…
Read MoreInvestment Review & Outlook – January 2023
Key Takeaways 2022 was defined by inflation that proved not to be transitory and which was further exacerbated by the war in Ukraine. The Federal Reserve responded with sharp rate increases which led to double-digit declines for both stocks and bonds. A moderate recession likely is on the horizon in 2023, with higher unemployment and…
Read MoreInvestment Review & Outlook – October 2022
Key Takeaways We believe that the Fed is committed to driving current inflation down to target levels (2 to 2.5%) and wants to make sure inflation will not flare up again due to premature easing, avoiding a repeat of the late 1960s and 1970s. The consequence of Fed actions is a high probability of recession…
Read MoreInvestment Review & Outlook – July 2022
Key Takeaways Persistent inflation reached a 40-year high in the second quarter causing consternation for consumers, corporations, and the Federal Reserve. While the cure for high inflation (rate increases) may result in short-term pain for investors, it will benefit financial assets longer term. A 75-basis-point rate hike by the Fed in mid-June reflected a more…
Read MoreInvestment Review & Outlook – April 2022
Key Takeaways Inflationary pressures, rising interest rates, and Russia’s invasion of Ukraine fueled market volatility in the first quarter with declines in both the stock market and the bond market. The Federal Reserve seeks to implement multiple rate hikes this year as a result of inflation that is well above its 2% target and a…
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