Our Thoughts
End of the year rally?
Israel has a key position in the region, it's highly likely that we'll see energy prices impacted by the conflict, which has the potential to increase inflation.
Couple this new war with the ongoing war in Ukraine, and OPEC production cuts, a large and growing demand for oil and gas products is adding to renewed upward pressure.
Normal Pullback or Deeper Correction?
With the Fed's perceived strong arm on monetary policy and the recent US debt and banking institution downgrades (possibly more on the way), a continued decline in leading economic indicators, and the Chinese economy blowing up, investors are suspicious that the current path will produce any positive outcome.
Is the Bull Back on?
There are many positive developments taking place in the capital markets keeping market participants positive for the future outlook. Yet, at the same time there is equally enough negative economic data to keep institutions more cautious as they deem current valuations extended.
Operation Break Stuff?
Take a look at the FHFA House Price Index from Q3 2022 (Q4 out in January). According to Nataliya Polkovnichenko, the Supervisory Economist for the FHFA, “House price gains have substantially disintegrated in the 3rd quarter with a pace comparable to the one we observed during the great recession”.