Fall 2023 Quarterly Commentary

Sometimes headline numbers do not tell the whole story. For example, you would think that the Atlanta Fed’s GDP Now third quarter economic growth estimate near 5% would have market participants dancing in the streets. Well, the opposite seems to be true. Both the stock and bond markets have been selling off of late. Stock investors are fearful that interest rates will stay higher-for-longer. Bond investors are on edge about a lack of a budget deal coming out of Washington D.C. & sticky inflation artificially buoying growth. On the surface, our economy is doing okay. However, beneath the numbers, there are signs that suggest we should put away our rose-colored sunglasses.

1Q 2023 Commentary Video

We hope you enjoy the video and find our comments informative and beneficial. We encourage and welcome your feedback. This video contains general market commentary and information that should not be construed as advice to make any specific investment. For investment advice, please consult with your portfolio manager. Our quarterly market commentary often contains forward-looking statements, predictions and forecasts (“forward-looking statements”) concerning our beliefs and opinions with respect to the future. Forward-looking statements necessarily involve risks and uncertainties, and undue reliance should not be placed on them. There can be no assurance that forward-looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Investing involves the risk of loss, including risk of loss of principal invested, that clients should be prepared to bear.

Spring 2023 Quarterly Commentary

The economic narrative has shifted quite dramatically in recent weeks. Coming into the year, our investment team had a more positive view than the Fed – and even many Wall Street economists. We had forecast strong, yet moderating, job growth. Inflation was ‘rolling over’. Corporate profits were okay. Q1 GDP growth estimates were even over 3%! Then came the second largest bank collapse in U.S. history on March 10th. With the failure of Silicon Valley Bank (SVB), ripples spread throughout small, medium-sized and regional bank land as to who could be next? An estimated $500 billion of savings deposits fled smaller banks to the welcoming arms of too-big-to-fail, larger banks such as JP Morgan, Bank of America, etc. Many investors wondered: Is this another Global Financial Crisis (GFC) like we experienced in 2007/08? Our answer is absolutely not!

4Q 2022 Commentary Video

We hope you enjoy the video and find our comments informative and beneficial. We encourage and welcome your feedback. This video contains general market commentary and information that should not be construed as advice to make any specific investment. For investment advice, please consult with your portfolio manager. Our quarterly market commentary often contains forward-looking statements, predictions and forecasts (“forward-looking statements”) concerning our beliefs and opinions with respect to the future. Forward-looking statements necessarily involve risks and uncertainties, and undue reliance should not be placed on them. There can be no assurance that forward-looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Investing involves the risk of loss, including risk of loss of principal invested, that clients should be prepared to bear.

3Q 2022 Commentary Video

We hope you enjoy the video and find our comments informative and beneficial. We encourage and welcome your feedback. This video contains general market commentary and information that should not be construed as advice to make any specific investment. For investment advice, please consult with your portfolio manager. Our quarterly market commentary often contains forward-looking statements, predictions and forecasts (“forward-looking statements”) concerning our beliefs and opinions with respect to the future. Forward-looking statements necessarily involve risks and uncertainties, and undue reliance should not be placed on them. There can be no assurance that forward-looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Investing involves the risk of loss, including risk of loss of principal invested, that clients should be prepared to bear.

Fall 2022 Quarterly Commentary

We believe the current economic environment is far too pessimistic than many in the media suggest. The jobs market remains on moderating, but solid, footing with unemployment at 3.5% near all-time lows. While nonfarm payrolls (+263,000 jobs) in September experienced the lowest monthly gain since April 2021, the report was still strong nonetheless. Importantly, wage gains only rose 5% year-over-year – slightly below forecast. As you may recall, the Federal Reserve has been concerned about wage inflation so a moderation in average hourly earnings is viewed positively. In addition, the recent JOLTs (Job Openings and Labor Turnover Survey) report showed a decline in available jobs to 10 million (from 11.2 million). The decrease of available jobs (supply), combined with moderating job gains (demand), will help bring the jobs market into better balance – another positive for economic bulls and stock market participants. These data points give us increased confidence that wage inflation will decrease over time & that our soft landing economic forecast is still on the table.

2Q 2022 Commentary Video

We hope you enjoy the video and find our comments informative and beneficial. We encourage and welcome your feedback. This video contains general market commentary and information that should not be construed as advice to make any specific investment. For investment advice, please consult with your portfolio manager. Our quarterly market commentary often contains forward-looking statements, predictions and forecasts (“forward-looking statements”) concerning our beliefs and opinions with respect to the future. Forward-looking statements necessarily involve risks and uncertainties, and undue reliance should not be placed on them. There can be no assurance that forward-looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Investing involves the risk of loss, including risk of loss of principal invested, that clients should be prepared to bear.

Summer 2022 Quarterly Commentary

Consumers have had enough. Inflation (led by food & energy) has surged. Housing seems to have ‘rolled over’ in many areas of the country due to mortgage rates running close to 6%. The stock market had its worst start to the year since the Great Depression. The bond market provided no relief with many bond indexes declining double digits. In short, there was nowhere to hide! It’s no wonder that the University of Michigan Consumer Sentiment Index (see chart) has retreated from pre-pandemic highs around 100 to 58 recently. This puts sentiment near the previous Global Financial Crisis lows of 2007 – 2009 when the index hit 55! As a result, the economic data has softened, and the Citi Economic Surprise Index is flashing potential recessionary warning signals (see chart)