Please find the next blog in our monthly series that provides a snapshot of the markets and the state of the economy.
- Equity markets faltered in November after news of a new Covid-19 variant triggered a flight to safety
- The Federal Reserve announced its plan to taper asset purchases and later hinted at an accelerated timeline in response to inflation
- Consumer spending rose, unemployment declined to 4.6%, and jobless claims fell to their lowest level since 1969 as economic data trended positive
- Global equities (ex. EM) still outperforming bonds year-to-date
- Fixed income (ex. HY) rises as rates fall on Covid fears
Asset Class Valuations
- Equities still favored over bonds
- Non-US equities favored over US equities
- Equities, H.Y. bonds, R.E. provide an inflation hedge
Inflation Expectations Leveling Off
Key Risk Factors We Are Watching
- Coronavirus Omicron Variant
- Consumer Behavior – Savings/Spending
- Financial Conditions; Fed Tapering
- Regulatory Policy Shifts (US and China in particular)
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