The 2nd quarter saw an acceleration of inflation and, as a result, Federal Reserve “jawboning” and tightening moves. Both Stock and Bond markets sold off due to the fear of restrictive monetary policy which could cause a recession and the prospect of lower corporate earnings. The 20% market decline through June has “priced in” most negative scenarios and we believe markets will recover substantially by year end. In the last hundred years, the five biggest stock market declines in the first half were followed by rallies in the second half.
Our view is also shaped by recent evidence of lower commodity prices including lumber, copper, and energy. Mortgage rates have come down from having doubled in the last quarter. We believe that the Fed will not have to raise rates as much as was feared when the CPI of 9.1% was announced last month.
We are pleased to announce that Angela Saez has joined Winslow as Sr. Research Analyst and Portfolio Manager. Angela has a BA from University of Connecticut and an Executive MBA from Columbia University. She spent over 15 years as a Sr. Research Analyst at Iridian Asset Management, LLC in Westport, Connecticut.
