3Q 2022 Market and Economic Overview

The third quarter of 2022 continued to be volatile for investors in all asset classes. There were no ‘safe havens’ where investors could hide from the avalanche of volatility and negative market sentiment. It was not only stocks and bonds that continued to slide but also other asset classes such as hedge funds, global infrastructure, property, and commodities which historically tended to have low-to-zero correlation with traditional asset allocations. According to Bloomberg, the markets in 2022 constituted the biggest cross-asset sell-off since 1981. The value of cash and money market securities was also eroded by ongoing inflationary pressures. Overall, markets have retraced such that almost every major stock index in the world has fallen by at least 20% since the beginning of the year. An obvious question one would ask is whether an inflection point is near and/or if we have reached the bottom? To answer this question, one should look at the economy from a top-down perspective to see what that might be telling us