Take a look at last week’s market recap from Joe Gallemore, CIMA® Partner & Director of Investment Management for Argent Bridge Advisors. Watch the video now!
Stock market in the US has dipped into “Correction” territory which means it has declined 10% from its peak on Jan 3.
- Much of this volatility is inflation-driven because it causes the Fed to raise interest rates, which stock investors inherently don’t like.
The major headline risk right now is obviously tension with Russia’s actions regarding Ukraine
- If this breaks out into a military conflict, we’ll very likely see some short-term volatility in all markets. But history shows these are usually short-lived. Even after 9/11/01, the market took a sharp dip and had recovered within a month.
- Most directly this will affect energy prices, as Russia is a major energy supplier to Europe.
- But we believe that a more significant risk still remains Covid variants. These have greater potential for more widespread economic impact than a conflict in an isolated region. But right now, all the measures of Covid cases are heading in the right direction.
While inflation is high, the economy is still quite healthy. Equity markets were at lofty valuations, so a pullback was not a big surprise.
We are actively rebalancing amidst volatility. Not trying to time the market, but making sure allocations remain near targets while the market experiences this repricing.