Insights
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Hitting The Debt Ceiling
Last week was one of the calmer trading periods in recent memory, with the S&P 500 closing each day between up and down 0.6% (first time since November 2021) and the CBOE Volatility Index sinking below 17 (first time since January 2022).
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The Importance Of Objective Reasoning
Over the past several weeks we have discussed the potential credit crunch facing the U.S., the risk of negative Q1 earnings surprises, and the impact of elevated market volatility, making the case for a predominantly bearish veiwpoint on the overall market.
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The Global Credit Crunch
Earlier this week, IMF chief economist Pierre-Olivier Gourinchas said Tuesday, “Below the surface, financial market turbulence is building, and the world economic situation is quite fragile.”
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US Earnings Season
As we close out the first quarter in which equity indices moved markedly higher despite growing economic concerns, we now shift focus to Q1 earnings in the coming weeks for a snapshot of corporate health for Q1.
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The Growing Role of Technology
Investors often confuse the S&P 500 Index (SPX) as a proxy for the “market” and a measure of market health, but this can be misleading when there is significant performance dispersion amongst the different underlying sector components.
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The Disparity Between Equity And Fixed Income
The last two weeks have produced a whirlwind of news that will likely impact markets for the foreseeable future. Given the relative turmoil, it’s interesting how varying segments of the market have reacted, particularly the disparity between equity and fixed income markets.
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Navigating Bank Stress After SVB’s Collapse
In the wake of the stunning Silicon Valley Bank (“SVB”) crisis in which the bank was ultimately shut down by regulators, there is growing concern that similar issues could spread to other U.S. banks in the coming months. Let’s examine what happened to SVB and the potential for contagion across the banking industry.
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When Housing Bottoms, Markets Follow
On February 22nd, with shockingly little fanfare, office landlord Columbia Property Trust, which is controlled by PIMCO, defaulted on about $1.7B of mortgage notes on 7 buildings across the US. This followed a default by Brookfield Properties on $784 million worth of loans tied to two LA office towers earlier this month.
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Is A Recession Imminent?
As market participants wait for what has been the most widely predicted recession in US history, let’s evaluate why a recession may or may not occur in 2023 and the implications for the market if it does.
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Measuring Volatility And Market Risk
February has proven to be an extremely volatile period for equity markets. From February 1st through last Friday, February 17th, there were a total of 13 NYSE trading days. During this period, the S&P 500 (SPX) saw a staggering amount of intra-day volatility, with 18 different occasions where the index experienced a reversal of at least 1%.
