Market Trends & Outlook

Historically, equity markets are positive roughly 80% of the time, or 8 out of 10 years. So far this year, they are negative. In addition, the average annual drawdown peak to trough is ~14% (source: J.P. Morgan Guide to the Markets Report).

While the Federal Reserve is focused on fighting inflation and willing to cause “some pain” to achieve victory, they hope to do so without evoking a recession. Such may be a challenge for two primary reasons:

The “Rule Of 20” says the “bear market” may just be resting despite much commentary to the contrary. In a recent Investing.com article, Bank of America strategist Savita Subramanian warned clients that stocks are still expensive despite this year’s drawdown.

Markets enjoyed a strong start to August, continuing a rally that saw rising asset values across the board in July. Alas, the second half of the month proved more challenging for investors, with prices of stocks and bonds suffering steep declines. For the month, the Core Large Cap Equity category re-turned -4.7% while the Core Fixed Income Category came in at -2.9%.

Markets enjoyed a strong start to August, continuing a rally that saw rising asset values across the board in July. Alas, the second half of the month proved more challenging for investors, with prices of stocks and bonds suffering steep declines. For the month, the Core Large Cap Equity category re-turned -4.7% while the Core Fixed Income Category came in at -2.9%.

The bear market is over. While that statement fills the mainstream media, it remains a hotly debated question in every media forum. It is an interesting point considering that it was just in June we were answering the question of “when will this bear market end?”

Consumers have already begun making decisions based on higher prices. There will be big winners and losers which makes stock picking a very important portfolio position for the next 12-24 months. Not every company is well suited for the environment we are in, and the most relevant brands will be taking market share. That’s where our team is focused from a stock selection perspective.

Jerome Powell isn’t Paul Volker, and this isn’t 1982. As of late, market analysts are stumbling all over themselves, trying to outdo each other on the “why this time is different” related to the Federal Reserve’s ongoing inflation fight. One of the more interesting comparisons came from the always uber-bullish Tom Lee of FundStrat.