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!