Market Trends & Outlook

It’s been hard to beat the S&P500 so far in 2023. And yet, midstream energy infrastructure continues to close in on a third successive calendar year of outperformance.

It’s been hard to beat the S&P500 so far in 2023. And yet, midstream energy infrastructure continues to close in on a third successive calendar year of outperformance.

Volatility indexes are often seen as barometers for how the market is reacting to newsworthy events, so how are they behaving in light of heightened geopolitics and higher rates?

Volatility indexes are often seen as barometers for how the market is reacting to newsworthy events, so how are they behaving in light of heightened geopolitics and higher rates?

Restrictive monetary conditions, from higher yields and tighter lending conditions, are the Fed’s “Waterloo.” If you don’t remember, the “Battle of Waterloo” was fought on June 18th, 1815. The battle was a catastrophic defeat for the Napoleonic forces and marked the end of the Napoleonic Wars. Before that defeat, Napolean had a successful campaign of waging war in Europe.

Restrictive monetary conditions, from higher yields and tighter lending conditions, are the Fed’s “Waterloo.” If you don’t remember, the “Battle of Waterloo” was fought on June 18th, 1815. The battle was a catastrophic defeat for the Napoleonic forces and marked the end of the Napoleonic Wars. Before that defeat, Napolean had a successful campaign of waging war in Europe.

As the “soft landing” narrative grows, the risk of a “crisis” event in the economy increases. Will the Fed trigger another crisis event? While unknown, the risk seems likely as the Fed’s “higher for longer” narrative is compromised by lagging economic data.

Investors should expect to see continued bouts of volatility across equities, fixed income, commodities, and currencies. Don’t be afraid of the VOL, embrace it by implementing some strategies that love operating in a higher VOL regime.