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16 Apr QUARTERLY REVIEW Q1 2024
CONTINUED U.S. EXCEPTIONALISM 2024 saw the strongest start for U.S. large cap stocks since the pandemic. Stocks were up 10.6% as measured by the S&P 500. This was on the heels of strong risk asset returns in the fourth quarter of last year. Returns were positive...
10 Apr VIEWPOINTS APRIL 2024
REDUCED HEADWINDS TO RISK ASSETS
The U.S. economy remains resilient. We expect growth to be close to trend and inflation to come down slowly. In this environment, we expect the Federal Reserve to cut rates around the second half of the year. A similar picture is emerging in some of the key developed markets outside of the U.S. The probability of a prolonged downturn in Europe has declined...
01 Mar VIEWPOINTS MARCH 2024
THE PAUSE THAT REFRESHES?
Many feared recession in 2023. Instead, the U.S. economy growth rate actually accelerated – clocking in at 3.1% after posting a 0.7% growth rate in 2022. This stronger growth and continued labor market tightness have led investors to reset expectations for Fed policy. Markets now expect the first cut in May (we think June) and four rate cuts in all of 2024 (we think three).
05 Feb VIEWPOINTS FEBRUARY 2024
POLICY AND POLITICS
Focus remains on monetary policy with investors parsing Fed minutes and statements. Rate cut hopes drove much of the Santa Claus rally, but the Fed has not committed to investors’ full wish list. Politics will battle monetary policy for mindshare; ~40% of the planet can cast a vote this year, including the U.S. and Taiwan (which just reelected its nationalist party)...
17 Jan QUARTERLY REVIEW Q4 2023
MISSION ACCOMPLISHED? Entering 2024, the Federal Reserve appears set to proclaim its inflationary mission accomplished – and in soft-landing fashion. Investors welcomed the Fed’s evolving message on monetary policy, with global equity markets up 11% (12% in the U.S.) in the quarter. The strong finish to...
08 Jan VIEWPOINTS JANUARY 2024
SUPPORTIVE FUNDAMENTALS
Global markets were strong over the past month as “soft landing” supportive fundamentals and market conditions unfolded. Increasing confidence in moderating inflation drove significant changes in expectations for the Fed (pricing in earlier rate cuts), and a steep drop in long-term rates. Lower rates combined with still reasonably durable labor market and consumer spending conditions drove a re-rating upward of equity markets as the scenario of falling inflation and non-recessionary growth conditions over the next year became increasingly priced in...
04 Dec VIEWPOINTS DECEMBER 2023
DON’T COUNT ON CUTS
Global markets remain volatile, with equities starting the month lower before declining long rates toward the end of the month brought investors back to stocks. Rates fell as investors read the Federal Reserve communication as relatively dovish, combined with some softer macroeconomic readings including a somewhat weaker U.S. employment report for October...
01 Nov VIEWPOINTS NOVEMBER 2023
ALL ABOUT RATES Global markets were weak over the past month, with both stocks and bonds posting negative returns. The catalyst was principally the material rise in interest rates over the course of the month – driving losses in fixed income and pressuring equity valuations. Until...
12 Oct QUARTERLY REVIEW Q3 2023
IT’S A MARATHON… As most of the world’s population exits summer, marathon season resumes – with two of the six majors* (Berlin and Chicago) bookending the start and end of the third quarter, and New York coming up in November. The “it’s a marathon, not a...