Summer 2023
Market Outlook – As we enter the second half of 2023, the economy has remained surprisingly resilient despite the massive tightening in monetary policy and higher borrowing costs. Consumers continue to spend aggressively, buoyed by full employment and rising wages, despite materially higher prices for goods and services. Corporate earnings have also outperformed expectations so far this year, with sales and earnings growth beating consensus expectations through 1Q23. While we expect economic growth will continue to moderate, with a strong possibility for negative growth in upcoming quarters, we are not predicting an economic hard landing. The consensus recession predictions have been a slow train coming for much of the past year. If a recession ultimately does occur, it will be one of the most well-telegraphed recessions in modern economic history. READ MORE
Winter 2023
Market Outlook – The markets have been extremely challenging in 2022, and certainly unlike any period in modern history where virtually all asset classes lost value. We’d have to go back to the late 70s to find a remotely similar environment for overall market returns, however the structure and complexity of today’s market is quite different in many respects. Treasury Inflation Protected securities (TIPS), which didn’t exist during the stagflation cycle in the 1970s, have experienced negative double digit total returns YTD. (Figure 1) Disappointingly, the only asset that directly compensates investors for being “long inflation” didn’t work. Even gold, a huge outperformer during previous periods of high inflation, was down this year by over 3% through the end of November. READ MORE
