In this month's issue:
How Does the Fiscal Deficit Get Resolved - Mark Luschini
In the December issue of Investment Perspectives, we addressed the oft-mentioned concern that the U.S. government’s indebtedness is poised to cause distress for the economy and/or financial markets. In response, we posited that the country’s debt level does not pose an immediate risk as long as new debt can be issued at reasonable yields and there are willing buyers of it.
Fixed Income: 2022 Year in Review - Guy LeBas
Our long-standing tradition in the first Investment Perspectives of each year is to reflect on major fixed income market themes from the prior year, and pull some forward-looking lessons from those themes.
In many ways, some painful for investors, 2022 was a unique year for fixed income markets and there is no shortage of lessons from this rather ugly period. These lessons were created by a combination of forces, and some will make an impact in the future. We believe there is at least one reminder from 2022 that will stick around for a long time: When economic volatility increases, the wheels come off the interest-rate bus quickly.
New Year, Old Concerns - Gregory M. Drahuschak
Aggressive Federal Reserve actions, mixed economic data, historically high inflation, a strong dollar, domestic and foreign political issues, along with gradually diminishing earnings expectations conspired to shove the Standard & Poor’s 500 index (S&P 500) to a 19.44% loss last year, which was its worst down year since 2008.
Back-to-back annual losses are relatively rare, but 2023 begins with many of the issues that weighed on stocks in 2022.
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