Declines in the stock market and a deterioration in sentiment in recent days were partially due to sharp banking sector declines this week. These stemmed from worries over what started as capital crisis in a couple of specific California banks (SVB Financial/Silicon Valley Bank and Silvergate), ending their failures within a few days. 

Happy New Year! We think most of you would agree that we are thankful to see 2022 in the rearview mirror. It was a challenging year on a whole host of levels with inflation spiking up to levels not seen in many decades, a new war in Europe that shows no sign of abating anytime soon and the actions of the Fed in pushing up interest rates. All this has unsettled markets and provided ample grist for speculation about the timing of the next recession.

Well, here we are again. This last quarter started on a somewhat positive note with stocks rising until the middle of August. That cheer didn’t last, however, as uncertainties about rising interest rates and the direction of the economy pushed us back to a bit lower than where we started. Bonds followed a similar pattern as folks wrestled with the idea that interest rates would climb higher than had been anticipated earlier this year

Warren Buffett, the Oracle of Omaha, once said to be fearful when others are greedy, and greedy when others are fearful.

The most recent downturn in stocks brought us to an official declaration that we have crossed the line denoting a 20% drop in the S&P 500 index and thereby entering an ‘official’ bear market. In truth we had been flirting with this number a few times already this year, but now it’s official.