Key Events: All Clear – for the pandemic
The World Health Organization declared the COVID-19 Pandemic emergency over.
Worries about the banking system persisted as JP Morgan, the largest US bank, took over the assets of failed First Republic Bank, but First Horizon and TD Bank called off their merger due to regulatory concerns over the size of the combined bank.
Janet Yellen shortened a G-7 finance trip amidst debt limit concerns. The Treasury sold 1-month bills for record-high rates.
The Fed raised rates ¼% for – possibly – the last time this cycle.
Market Review: Slight declines
Stock markets gave up a bit of ground this week; emerging market stocks’ flat performance was the exception.
High grade bonds gained slightly, while high-yield lost ground along with stocks.
Outlook: Managing Risk
As the chart below shows, [1] the assets on bank balance sheets have sustained significant losses; this is likely to lead to caution and decreased lending, which is likely to lead to slower growth.
While we believe the banking system is more stable than during the ’08 crisis, risk management remains a key component of our process. This week we added a small position in a Gold ETF as a hedge against further crisis. OneAscent portfolios are diversified, and we remain disciplined in our process and portfolio allocation.
i Source: FDIC
OAI00286