Market & Topical Perspectives

1Q23 Market Overview: My Ever-Changing Moods

1Q23 Market Overview: My Ever-Changing Moods

Fluctuating readings on the potential trajectory of central bank policy and acute signs of strain in the banking sector whipsawed investor sentiment throughout the first quarter.

Key Takeaways

  • Market sentiment has fluctuated wildly in recent months as participants try to discern the path of central bank policy.

  • We believe the midsized bank failures in the US underscored the pronounced vulnerabilities inherent in today’s financial system and the potential for unintended consequences as policymakers attempt to unwind years of highly accommodative policy.

  • With government issuance the locus of global indebtedness, it’s possible that the recent banking crisis in the US is merely the opening act of a sovereign credibility crisis.

  • All in all, the Global Value team is comfortable maintaining a “healthy paranoia” in this environment, focusing as always on avoiding the permanent impairment of client capital by seeking resilience in our portfolios from the bottom up.