This week on the Regions Weekly Market Update call, Brian Herron, director of Fixed Income Portfolio Management, joins Chief Economist Richard Moody and Chief Investment Officer Alan McKnight to discuss the latest movements in the markets.
Join us on Friday, March 25, 2022 – and every Friday – at 11:00 a.m. Central as our panelists share their perspectives on the latest market conditions and the catalysts driving recent market movement.
In this week’s call, the panelists will review the current market environment and more specifically the recent weakness in fixed income due to the increase in rates, discuss the rally in growth equities with a focus on the tech sector, and provide insights on portfolio positioning.
Below is a preview of a few key observations:
- The 10-year yield has jumped from 1.95% to 2.29% in the last month.
- The Barclays Aggregate Bond Index is down 6.0% vs. S&P500 which is down 6.5%.
- Since 1980, the Barclays Aggregate Bond Index has been positive in 38 of 42 years and the largest calendar year decrease was 2.9% in 1994. In that time period, it has never fallen in two successive years (it was down last year as well, setting up to potentially create a historic, multi-year decrease).
- Since 1980, the S&P500 has been positive in 35 of 42 years, with the largest drawdown of 36% in 2008.
“Both a narrative and regime change at the Federal Reserve is causing volatility in the markets and especially in the Fixed Income space,” noted Herron in a pre-call discussion. “As markets price in an inflation fighting Fed, the sell-off in the bond market is producing negative fixed income returns rarely seen by investors in the past 40 years.”
A few more insights from Brian in advance of Friday’s call:
- In addition to interest rates going up, the movement and signals from the yield curve (short rates vs. long rates) is front and center for investors not only for volatility, but also possible recessionary signals that is sending to the market.
- As the Fed moves forward to remove accommodation from the market and to fight inflation, they are on a precarious journey to pull this off without slowing the growth of our economy.
- Ongoing and escalating war in Ukraine is further intensifying the very difficult slope the Fed is traversing.
Catch up on previous discussions via Regions Weekly Market Update recordings. These events are hosted by Regions Wealth Management team. Additional economic commentary and resources may be found on Regions.com.
This week’s Weekly Market Update will be presented live at 11:00 CT / 12:00 ET on Friday as part of an ongoing weekly series hosted by Regions to share the latest insights on the markets.
Participants may send questions in advance of the call to [email protected] so the panelists can address these questions during the live call. Participants are encouraged to dial-in or join via WebEx 10-15 minutes in advance of the start time.
For additional information and link to join this and upcoming calls: Regions Bank Weekly Market Update Calls – WebEx.
The commentary expressed during this call are statements of the Speaker(s) opinion, are intended only for informational purposes, and are not formal or binding opinions of Regions Bank, its parent company Regions Financial Corporation, or its subsidiaries. This content is solely for information and educational purposes, and nothing contained in this presentation constitutes an offer or solicitation to purchase any security, the recommendation of any particular security or strategy or a complete analysis of any security, company or industry or constitutes tax, accounting or legal advice. Information is based on sources believed to be reliable but is not guaranteed as to accuracy. Commentary and opinions provided reflect the judgment of the Speaker(s) as of the date of this presentation and are subject to change without notice. Certain sections of this presentation may contain forward-looking statements based upon the reasonable expectations, estimates, projections and assumptions of the Speaker(s), but forward-looking statements are not guarantees of future performance and involve risks and uncertainties, which are difficult to predict. Investment ideas and strategies presented may not be suitable for all investors. No responsibility or liability is assumed for any loss that may directly or indirectly result from use of information, commentary or opinions. This information is intended for the use of Regions’ clients and associates and is not intended for further distribution.