https://www.gam.gi/wp-content/uploads/2019/06/gamlogo.png 0 0 Mark Maloney https://www.gam.gi/wp-content/uploads/2019/06/gamlogo.png Mark Maloney2022-12-05 14:33:042022-12-05 14:33:45Market Commentary December 2022
Most investors will be happy to see the back of 2022. It has been a year where everything went against both the stock and bond markets. Much of the pain was self-inflicted - as too much liquidity led to out-of-control inflation and then central banks were far behind the curve (and have been playing catch up ever since). Too much liquidity led to bubbles in the mega-caps in 2021 and mega bubbles in tech stocks, most of which had scorching revenue growth but were not profitable. Some of these names went up 200%, 300%, and 400% - performance reminiscent of the late 1990s tech bubble. The biggest bubble was in crypto, as a generation of “20 somethings” took the financial world by storm, sending Bitcoin to $69,000 in late 2021 from $4,000 in early 2020 and then back to ~$17,000 today. All bubbles eventually pop - and then things get very ugly, as they have this year. We project that 2023 will not be nearly as dramatic, as so much bad news has already been reflected in stock and bond prices.
https://www.gam.gi/wp-content/uploads/2019/06/gamlogo.png 0 0 Mark Maloney https://www.gam.gi/wp-content/uploads/2019/06/gamlogo.png Mark Maloney2022-11-07 13:30:232022-11-07 13:31:06Market Commentary November 2022
This year is turning into one of the worst for the S&P 500. The year-to-date return excluding dividends is an abysmal -21%. Over the past 30 years, this loss was exceeded only in 2008, when the “500” collapsed 39% during the financial crisis, and 2002 when it declined 23%. Previously, the worst years for the S&P 500 were in 1974 (-30%), 1937 (-39%), 1931 (-47%), and in 1930 (-29%). Going back to 1929, there are only a few times when the index got walloped in consecutive years. Those include the bear markets of 1929 to 1932, 1939 to 1941, 1973 to 1974, and 2000 to 2002. Multiple years of gains are much more common, which makes sense because the market rises approximately seven out of 10 years. What is unusual about this bear market is that bonds have been in their own bear market, leaving investors with no place to hide, with the 20+ Year Treasury Bond index falling 35%.
https://www.gam.gi/wp-content/uploads/2019/06/gamlogo.png 0 0 Mark Maloney https://www.gam.gi/wp-content/uploads/2019/06/gamlogo.png Mark Maloney2022-10-10 13:21:512022-10-10 13:23:42Market Commentary October 2022
A new month, a new quarter, good riddance to the old. It’s been rough of late, with all asset classes falling hard and fast. There are many market conditions that investors need to evaluate: inflation, interest rates, dollar strength, global monetary policies, geopolitics, bond-yield inversions, rising volatility, and corporate earnings. Still, central banks have been clear: the focus needs to be on inflation, inflation, and inflation. That suggests investors are being forced to prioritise how the overall economy is holding up against steady and large interest-rate hikes. The Fed believes that its harsh medicine will work, but not instantaneously. It expects inflation to grow in the US by 5.4% in 2022, 2.8% in 2023, and 2.3% in 2024, finally reaching its target of 2.0% in 2025. So much for transitory but at least 2023 is looking much brighter.