Take a look at the February market recap from Joe Gallemore, CIMA® Partner & Director of Investment Management for Argent Bridge Advisors. Watch the video now!
Joe’s Notes:
All Indexes had an excellent January. US stocks were up 6-10%, Intl/EM stocks were up 6 & 8% respectively, even bonds recovered 3%.
- So a 60/40 portfolio would be up about 5.9% in January.
- These numbers mean the markets have recovered 1/3 to ½ of their decline in 2022. (Even more if you look at it from the bottoms in mid-Oct). That’s a great start!
This is a good lesson in not getting ahead of ourselves. The market is charging ahead based off a couple good inflation prints, one showing of moderation from the Fed, and seemingly innocuous, even positive, economic data.
But the fact is a lot of thought leadership out there is saying to beware. Under the surface of the data, lots of business and economic growth is still slowing/softening. They’re saying that we are nowhere near out of the woods as far as slowing growth; so, recession is still a very real possibility.
Boil this all down to say that business leadership is cautious and sees lots of work to be done. They are not making a stock market commentary. But the market is acting very optimistically, and that is not matching what the leaders in the trenches are reporting.
Looking forward we still think its likely there is more volatility, so just remain prepared for it. Economic data isn’t ready to signal a bottoming trend. And surprise headlines can always shock a fast moving market.
The positives in the data is that we’re already seeing temporary shifts in the tide. Lots of the tough decisions and financial pain that has been endured seems to be working.
To borrow from the unending euphemisms I’ve heard on webinars lately: Don’t count your chickens before they’ve hatched, don’t get out over your skis, it’s the eye of the hurricane, don’t buy the bounce, … but the reality is is that they’re all relevant right now. Markets historically start they’re sustainable recovery before the economy does, but the data right now is still flashing yellow, so tempering expectations on market return in the near term is a very good idea. You’ll do yourself a lot of favors in the not-so-unlikely event that meaningful volatility returns.
