US Capital Markets have struggled to reset risk-adjusted values among the geopolitical and economic crosscurrents of 1Q2022. Commodity prices and defense budgets are soaring in the aftermath of the Russian invasion of Ukraine. Energy markets have responded wildly, and the world is re-calibrating risk. But, given an inversion of the yield curve in the last week of March, no small matter, markets have been swayed by inflation signals, stagflation fears and Federal Reserve Board lassitude.
In this issue of the Capital Markets Brief we will try to cut through much of the noise generated in this historic and volatile quarter. We will focus on data and demonstrated behavior to provide some clarity about what underlies market behavior in this violent and often opaque world, and how markets assess and discount present and future risk as they navigate this turbulence.