Market & Topical Perspectives

2Q22 Market Overview: Forever Changes

2Q22 Market Overview: Forever Changes

In an environment of pronounced volatility and uncertainty, First Eagle’s Global Value team has continued to look for opportunities to allocate capital to companies we believe possess scarce, durable assets that will support business resilience over the long term, and do so at what we consider attractive prices.

Key Takeaways

  • Key-Takeaway

    We believe the very poor performance seen across asset classes in the first half of 2022 is mostly attributable to the conditions that were extraordinarily supportive of asset prices, including a very low cost of capital and very low energy prices.

  • Key-Takeaway

    While inflation remains elevated despite tightening financial conditions, signs of strain are evident in the real economy. The accompanying pullback in long Treasury yields and inversion of the yield curve suggests the bond market is pessimistic about a “soft landing” scenario.

  • Key-Takeaway

    A return to the supportive conditions that fueled markets following 2020’s Covid selloff may be further off than some think, in our view, especially if recession hits.

  • Key-Takeaway

    The year-to-date selloff has created what the Global Value team views as attractive opportunities to put money to work in companies we believe will be resilient in the face of volatile markets.