SPECIAL

SPECIAL: Zooming Out, 2022 was a year of "roundtrips." Fed remains principal "risk" to markets, but we see reaction function changing as inflation continues to fall.

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2022 has been a year of "shocks" and "sudden changes."

  • Stubbornly high Inflation was an unexpected “shock” in 2022 that weighed on equity performance, but recent trends show it is falling just as quickly as it rose
  • Persistently elevated geopolitical tensions from conflict between Russia and Ukraine created supply imbalance "price shock" for crucial input commodities. Prices have roundtripped since.
  • Fed went from "hands-off" to "all hands on deck" as inflation climbed through 1H2022, but "reaction function" set to change as recent trend proved inflation is falling faster than most believe
  • China went from perma zero-Covid to reopening overnight (whoa), underscoring how fast apparent crises can change
  • Headlines below prove just how sudden this actually was  
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But as Tom has said, "crisis" also comes with "opportunities." Throughout 2022, we have seen many improvements.

  • Supply chains substantially eased
  • COVID-19 faded in the United States 
  • Several key raw material inputs fell sharply from post-war highs: Gasoline, Oil, Wheat, Etc. 
Several key inflationary inputs roundtripped in 2022, suggestive of...

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