RESEARCH // October 18, 2021
Quarterly Commentary Letter – Q3 2021: A Tale of Two Parts

The third quarter began on an upswing. Covid-19 was in the rear-view mirror – or so it seemed. Growth was accelerating. Expectations were high for a “normal” return to work and school in the fall. Financial markets continued to rise to new records.

The picture changed sharply during the quarter – as the ravages and uncertainties of Covid-19 continued to bedevil the global economy. By the quarter’s end, economic indicators showed a mostly flat summer – supply chain disruptions and labor shortages hampered production. In China, growth slumped to just 0.2 percent from Q2 (4.9 percent on a one-year earlier) with power shortages and a property slowdown adding to Covid woes. Health concerns across the globe led to a pullback in travel and other services and in the US probably contributed to disappointing jobs numbers. Payrolls rose by only 194,000 in September, after 366,000 in August. Both fell far short of the million plus increase recorded in July. But inflation stayed persistently high. Consumer price increases hovered between 5.2 and 5.4 percent year-on-year through the third quarter, a 13 year high. As whispers of stagflation grew louder, equity markets slipped across the globe. After stocks hit new peaks in July and August, September followed with the first negative month since January.

Read the full letter here

You might also like:

Research

Quarterly Commentary Letter – Q2 2022: Switchback of Fear

July 22, 2022

The second quarter of 2022 was when reality sank in. Might we be headed back to the future, when inflation – and the fight to curb it – dominated the macro background? A slowdown is inevitably coming. Can the Fed, against the odds, succeed in cooling the economy sufficiently to bring down inflation without a sharp rise in unemployment?

Research

Quarterly Commentary Letter – Q1 2022: When the World Changed

April 22, 2022

The beginning of 2022 was a time of firsts. War in Europe, inflation at 40-year highs, and the start of a monetary tightening cycle across major economies coincided to knock equity markets back and trigger a sharp correction in bond prices in Q1. Looking ahead, investor caution remains warranted, but opportunities can, nevertheless, be found.

Research

Quarterly Commentary Letter – Q4 2021: When the Good Times Still Rolled

January 27, 2022

Markets ended the second pandemic year on a high note. Buoyed by a bounce back in US GDP growth in Q4 and continued strong earnings, equities notched up new record highs. Many Americans hoped that the reopening of theaters, some offices, and businesses would allow for a more normal 2022. They were wrong.