The Fed paused its rate hike campaign, indicating that two more rate hikes are likely in 2023.
Secretary of State Antony Blinken traveled to China, a trip that was postponed by the alleged spy balloon incident in February. While expectations were low, Mr. Blinken sought to improve communications and avoid miscalculations.
Market Review: The bulls continue to run
Technology drove returns again; the sector was up over 4% for the week and 40% YTD, driving the S&P 500 to 2.6% returns for the week and 15.8% YTD. All stock groups - except small caps - came along for the ride.
Bond returns were positive as the Fed paused its rate hikes.
Outlook: what will stop the momentum?
Last week we discussed the fact that the market has lost some confidence in the Fed. The chart below shows why; the fed did not react to inflation quick enough and was forced to embark on the most severe rate hiking cycle in its history.
Now that they have paused their rate hikes the focus turns from the fight to tame inflation to the risk of recession caused by those hikes. Leading indicators suggest that recession risk is high and valuations – particularly in the large cap space – do not provide a significant margin of safety for the investor.
Therefore, OneAscent portfolios remain broadly diversified, invested across the spectrum of markets and investing styles.
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