Market Review
In prior pieces, we have discussed risks associated with energy dependence that have emerged as a result of the ongoing war in Europe. While the primary concerns of investors, corporations, and policymakers have been focused on conventional oil and gas, we explore the prevalence of these risks across the clean energy transition supply chain as well. This month, we also review the merits of sound corporate governance and why it has been an integral component of our fundamental analysis for decades. Finally, we highlight ESG-related comments from Q1 corporate earnings releases.
Read more
April was another challenging month for financial markets. The Bloomberg U.S. Treasury index returned -3.21% for the period. The yield on the 10-year Treasury rose a remarkable 60 basis points (bps); the 30-year bond finished the month at 2.9%. The slope of the curve shifted frequently, and by month-end the 2-10s slope had gone from flat to 22 bps. Volatility was high.
Current pricing in the bond market makes last year’s discussions about rate increases seem almost quaint. It was only a few short months ago that the debate was centered on two or three fed funds rate hikes during 2022. Instead, we have already had one increase, and the futures market is projecting over 200 basis points of additional hikes this year.
Read moreAs the war in Eastern Europe wages on, policymakers have wrestled with enforcing punitive measures on Russia at the expense of higher inflation and diminished energy security for the rest of the world.
Read moreFebruary brought heightened volatility as a result of domestic data and geopolitical developments. The month began with a jump in payrolls here at home, leading to an increase in reates and widening credit spreads.
Read moreEscalating geopolitical tension and rising inflation have preoccupied U.S. policymakers through the first two months of the year, moving the approval of climate funding to the back burner.
Read more