Please find the next blog in our monthly series that provides a snapshot of the markets and the state of the economy.
- US GDP growth remained strong with an annualized growth rate of 2.9% in Q4 and 2.1% overall increase for calendar year 2022
- Data supported a deceleration in Fed tightening, with headline CPI declining to 6.5% in December and wage growth declining to 4.6%
- Global growth remains under pressure, but China’s reopening and a mild European winter helped those regions exceed Q4 GDP expectations
- GDP growth, lower inflation helped equity markets rally
- Bond indices performed well amid strong investor demand
Asset Class Valuations
- Equity valuations improved as prices fell in 2022
- Favor investment grade credit over high yield
- Cash yields remain attractive
Key Risk Factors We Are Watching
- Inflation and labor market data
- Tightening financial conditions
- Downward revisions to corporate earnings
- Ongoing geopolitical tensions
- Regulatory policy shifts (US and China in particular)
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