This week, we look at numerous reasons why both the economy and the markets are likely to worsen. However, in the spirit of the season, we also share some reasons that are present and could parachute us to a soft land. For 2023, we can dismiss the outlying scenarios but also we won’t model for either extreme.  

Simon Hamilton, Managing Director and Portfolio Manager, discusses how, once again, the Fed dashed investors’ hopes for a less hawkish policy stance and actually upped their rate hike forecast. He reviews the markets’ reaction, how to think about stocks and bonds, and considers the historical precedent for two consecutive down years. He also discusses the folly of making and listening to market forecasts and multiple reasons why it makes sense to refresh one’s estate plan.

Given the backdrop of another fading rally off recent lows, Simon Hamilton, Managing Director & Portfolio Manager, wonders if investors might have become too optimistic. Market focus will likely shift from all Fed, all the time, to concern regarding the health of corporate earnings. He discusses how balance sheet quality will become increasingly important and how it is unlikely that the success of growth stock-fueled passive investing will reassert anytime soon. It is an appropriate time to think about what levels of return are realistic going forward.

The Fed may be approaching a pivot in their monetary policy and we’re looking at conditions that also call for a pivot in long term allocation goals in portfolios. On this week's show Chase Hinderstein, Portfolio Manager, talks about what has taken us to this point in the cycle and what that means for value opportunities and risk premiums in different asset classes, as we start to shift a bit between them.

Simon Hamilton, Managing Director & Portfolio Manager, discusses how the strategies and investments that worked best a year ago are in most cases the worst faring today and the trend may continue for some time to come. He peaks into 2023 and offers a reasonable base case for the stock market. Simon also answers some common questions about the current state of the fixed-income markets and how investors should be paying attention to significantly higher yields.

This week was a wake up call to the euphoric dreams of last week and the recent rally. We believed that the rate of interest rate increases would slow and this period of tightening was near an end. We saw good inflation data and the market believed the future was bright. We saw the Russians pull out of Kherson and some believed that the war was entering a stage of moderating, maybe negotiating, maybe winding down. We believed that China was moving away from the Covid lockdowns and they’d catch up with the West in their reaction to the pandemic and allow more robust economic activity, then we got evidence that called all of this into question.

Simon Hamilton, Managing Director, discusses this week’s better than expected inflation (CPI) reading as well as a likely mid-term election outcome different than what most pundits expected. He offers some of the investment implications. He also attempts to answer the question: is it better to invest in stocks or bonds at this point given higher yields and the potential for recession?

Lots of economic data and the Fed both raising interest rates and the expectations for where the ceiling may be brought with it a lot of market volatility. This week we breakdown what happened and what it means, as well as a couple of items that aren’t under the Fed’s control and may provide some relief. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system.

Simon Hamilton, Managing Director, discusses the recent bifurcation in the market and how the “average” stock is doing better than the indexes. He looks at the poor performance of the traditional 60/40 portfolio this year and how returns could well be more attractive in years to come. He also reviews how investors often assume a direct correlation between recessions and further market losses but the historical record is mixed.

Inflation is like cancer, and the treatment has terrible side effects.  On this week's podcast, we discuss inflation and the worsening housing market and warn against chasing rallies caused by surges in short selling. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.