Equity markets remained rangebound through mid-May as lingering regional bank stress and financial stability concerns kept sentiment in check, with the closure of First Republic on 5/1/23 marking the third mid-sized bank to fail in 2023, all within a two-month period and the second-biggest bank failure in US history. US debt limit negotiations brought

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  Markets endured a number of phases throughout the first quarter of 2023, beginning with recession fears in January, economic overheating worries in February, and a banking crisis sparked by the failure of Silicon Valley Bank in March. Layoff announcements were frequent at tech firms that continued paring workforces in anticipation of a softer economic

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After three quarters of negative returns, stocks and bonds posted their first positive quarterly return in Q4 2022. Nevertheless, 2022 was marked as one of the most challenging years of the last 3 decades for a traditional 60/40 portfolio invested broadly across stocks and bonds. The 60/40 ended 2022 down -16.9%, with stocks (S&P 500) and bonds (Bloomberg U.S. Aggregate Index) down -18.1% and -13.0%, respectively.

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The third quarter began on optimistic footing, as investors contemplated whether inflation had peaked, sparking hopes that the Fed would ease off further rate increases. This led to an S&P 500 relief rally of nearly 14% through mid-August and over 17% from June lows. Soon thereafter, the hawkish tone of Federal Reserve Chair Powell’s speech at Jackson Hole followed by a hotter than expected August inflation report reversed market sentiment as markets declined for the remainder of the quarter erasing any gains from the rally and ending in further negative territory. There continue to be very few places for investors to hide, with a traditional 60/40 portfolio invested broadly across stocks and bonds down approximately -5% during the quarter and -21% year-to-date, its fourth worst drawdown in 50 years.

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