Fourth Quarter 2022 Review

2022 was a year beset by challenges, led by the Russia-Ukraine war, global supply chain disruptions, high inflation, rising interest rates across much of the developed world, and pronounced economic weakness in Europe and China. Although the US economy grew at an annual rate of +3.2% in Q3 and is expected to reach +4% growth in Q4, a hawkish Federal Reserve and upward pressure on bond yields led to a significant re-rating of most risk assets.

As Strategas Research put it, “the individual investor found few places to hide aside from cash, energy stocks, and a few select commodities.”

Historically, bull markets have started when the economy is at its weakest and corporate earnings are approaching a trough, both of which are conditions we could see materializing in the coming months.