Equity Commentary

Goodbye, 2022!
The year 2022 will go down as a year that most may want to forget, given the negative returns we experienced. The drawdown in equities was the worst for a calendar year since 2008.

Economic and Market Overview

Rates, Recalibration and Recession
As has been communicated widely and with great frequency, 2022 was an extremely challenging year for investors. Historical correlations between asset classes succumbed to a causality that impacted both equity and fixed income investors.

Fixed Income Commentary

Fixed Income Posts Worst Year in Over a Century
Core fixed income returns had their worst annual return in more than 100 years. The year began with the Federal Funds Rate at 0.25% and 10-year Treasury yield at 1.5% and ended with the Federal Funds Rate at 4.50% and the 10-year Treasury yield at 3.87%.

Economic and Market Overview

Another Rough Quarter
Investors continued to be buffeted by stormy markets in the third quarter with equities and bonds deteriorating further from their second quarter declines.

Fixed Income Commentary

Bonds Tumble as Fed Focuses on Inflation
During this quarter, core fixed income returns had their worst month in more than 40 years amid their worst year in recent memory.

Equity Commentary

Tumultuous Quarter
As we began the third quarter, equity markets rallied into mid-August in the face of falling interest rates. This reversed as near-term sentiment turned negative.

Fixed Income Commentary

Still a Bumpy Road for Fixed Income
Core fixed income returns were negative in the second quarter, further exacerbating the largest drawdown on record.

• The Ice BofA US Master Index is down 4.6% in the second quarter
• The Ice BofA US Master Index is down 10.4% year-to-date
• Investment grade corporate bond spreads are much wider in second quarter
• Investment grade bonds underperformed Treasuries by about 4.5% this year

Improving Fundamental Case for Lower Yields

The technical backdrop on Treasuries is quite negative given they are in a clear downtrend regarding price.

Equity Commentary

Equity Markets Continue Their Descent
U.S. equities declined 16.7% for the second quarter, and 21.1% year-to-date. Foreign equities retreated 13.7% and are down 18.4% year-to-date.

Economic and Market Overview

The Perfect Storm
The sobering start to 2022 saw pervasive weakness across multiple fronts during the first quarter: the economy, fixed income markets and equity markets.

Economic and Market Overview

A Sobering Start
Investors were treated to a double dose of negativity in the first quarter as both stocks and bonds declined over the three-month period.