Quarterly Commentaries

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Q4 2023

Either/Or: A Pivotal ’24

Late-cycle conditions persist, and we see paths for either slowing growth or a “soft landing” in 2024. We expect sectors with stable earnings growth to drive positive-but-volatile equity markets, while the interest rate backdrop should benefit fixed income.

2023 YEAR-IN-REVIEW

2023 year-in-review

Risks abounded in 2023, yet some areas of the U.S. and global economy showed significant resilience.  As a much-predicted recession failed to appear, inflation cooled, and the Fed eventually paused, U.S. equities posted a strong-but-narrowly-led rally, while elevated yields provided positive returns for fixed income year-to-date, despite interest rate volatility.

Q3 2023

Maintaining balance late in the cycle

A mix of resilience in some economic measures and deterioration in others is typical in the later stages of a cycle. As ongoing slow growth faces headwinds, we believe balancing defensive exposures and moderate economic sensitivity is warranted.

Q2 2023

Lingering late-cycle, lagged headwinds

Late-cycle conditions continue with the economy facing lagged impacts of Fed tightening, tougher lending standards, and declining profits. We continue to avoid or underweight the most economically cyclical parts of the markets.

Q1 2023

The cracks have started to show

The Fed continues to tighten, even as bank turmoil highlights the economic stresses of elevated interest rates.  We still see risks in economically sensitive areas of the market as the impacts of aggressive monetary policy work through the broader economy.

Q4 2022

To everything, a season

With a weakening economic backdrop, we see opportunity in less economically sensitive areas of the market and fixed income. We also stand ready to adjust our outlook and positioning when markets begin to look past the downturn.

2022 YEAR-IN-REVIEW

2022 year-in-review

The economic cycle has continued to progress rapidly in 2022, as various interconnected factors including persistent inflation, rising interest rates, aggressive Fed monetary policy, and increased recession risk have driven challenging markets with unusual correlations, particularly in the U.S.

Q3 2022

Navigating late-cycle conditions

While some economic data remains sound, deterioration in other data suggests a maturing economic cycle. We believe the Fed’s monetary stance has increased the risk of recession, and we see potential for disappointing earnings, particularly for more economically sensitive parts of the market.

Q2 2022

Cyclical progression, tactical evolution

We see rapid progression of the global economic cycle, with certain fundamental areas of strength but also rising risks. As our outlook evolves, we continue to position portfolios to balance risks and opportunities in a mid- to late-phase economic backdrop.

Q2 2022

Looking past market noise

Periods of elevated market volatility are normal within an economic cycle, and often represent a market divergence from fundamentals. In such periods, when others may see risk, we see opportunity as markets realign with the economic backdrop.

Connect with us

To learn more about how our proprietary sector-based approach can help you in meeting your investment objectives, please call us at 888.500.9025, or email us at info@westendadvisors.com.