Q3 Outlook: One step forward two steps back
Although the remnants of COVID largely faded throughout the third quarter, the effects of the economic slowdown still remained. The Fed adjusted interest rates higher, however it was not enough to impact rapidly growing inflation. Fears of an impending recession grew and drove equity prices to new lows for the year, reversing the positive upward trend that had started in June. On the global front, the war in Ukraine slogged on, unfortunately with no end in sight, causing even more concern and uncertainty for the future.
As a result, markets reacted accordingly. Declines were posted for all major asset classes. And U.S. equities fared only a bit better than international stocks. Positive returns were confined to only two sectors: consumer discretionary and energy. And the bond market which did not fully benefit from the Fed’s rate hikes turned in its worst returns in history.
So where do we go from here? Is it time for investors to sell stocks? Or is now a prime opportunity to buy quality issues at bargain prices? In our latest Market Insights, we review the markets and investment themes that are guiding our portfolios and offer pragmatic insights that can help you move forward during this period of uncertainty.
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