A review of what's been happening in the third quarter of 2022 from a sustainable investment perspective.
Where’s the Bottom? A Sustainable Investment Perspective on the Second Quarter of 2022
A Sea of Troubles: A Sustainable Investment Perspective on the First Quarter of 2022
The US economy continued to boom in the first quarter of the year as it recovered from the pandemic. By the end of March unemployment had fallen to just 3.6%, close to a record low and employers were reporting difficulties filling vacancies, forcing them to raise wages. Corporate earnings were strong and so was consumer spending. Nonetheless, for investors of all types, this was one of the worst quarters in a few years.
A Sustainability Perspective on 2021 and 2022
From the violent insurrection at the US Capitol on January 6th through the rapid spread of the Omicron variant at year-end it felt like the bad news never stopped coming in 2021. Hopes for political calm after over four years of turmoil and for an end to the pandemic with the arrival of vaccines were dashed. Even as the economy continued to re-open and growth was strong supply chain blockages and other issues led to inflation at a 40-year high. Consumer confidence fell and the public was in a grim mood.
A Sustainability Perspective on the Third Quarter of 2021
The stock market continued the remarkable rally that began way back in the spring of 2020 through early September, but as summer turned to fall it ran into turbulence. September ended up being the worst month for the markets since March of 2020. The S&P 500 was essentially flat for the quarter, gaining just 0.6%. Bonds also saw volatility but essentially treaded water. The Barclays US Aggregate Bond Index gained a mere 0.05% for the quarter. Stock markets in the rest of the world did worse than in the US, with the MSCI ACWI Ex-US benchmark (comprising all significant stock markets around the world) falling 3.0%.
A Sustainability Perspective on the Second Quarter of 2021
There were plenty of days when volatility reigned, but the financial markets had another strong quarter in April, May, and June. Unusually, investors made money in both stocks and long-term bonds during the quarter. The first quarter of the year saw the rally in equities continue even as interest rates in the US moved steadily higher. The S&P 500 gained 8.5% while the MSCI All Country World Index (ACWI) - representing all significant stock markets in the world - rose 5.5%. At the same time bonds also gained ground, in spite of concern over inflation. The benchmark yield on ten-year US Treasury bonds had nearly doubled to 1.74% from close to all-time lows in the first quarter but fell again to 1.45% on June 30th.
Q1 2021 Review and Outlook
The first quarter of the year saw the rally in equities continue even as interest rates in the US moved steadily higher. The S&P 500 gained 6.17% while the global MSCI All Country World Index rose 3.5%. At the same time bonds sold off. The benchmark yield on ten-year US Treasury bonds rose from 0.92% to 1.74% over the quarter, significantly higher than the record lows posted in the depths of the pandemic sell-off but still very low by historical standards.
Despite the drama of former President Trump’s followers’ chaotic and violent insurrection on January 6th the stock market moved steadily higher through the quarter. The Biden administration’s massive COVID relief package with its $1400 stimulus checks was a key driver…
2020 Review and Outlook
This past year was one most of us would like to forget but it was – shockingly – a great year for investors in both stocks and bonds. The almost eleven-year-old growth streak of the US economy ended abruptly in the first quarter with the onset of the pandemic that continues to lock down most of the world. Massive demonstrations and some localized outbreaks of violence and destruction shook the US over the summer as frustration at years of unpunished police killings of unarmed Black Americans boiled over. As this near apocalyptic year drew to a close the US presidential election went off much more smoothly than had been feared but the President shook the very foundations of American democracy by refusing to concede his loss and seeking to undo it by both legal and extra-legal means.