Market Pulse

Watch our latest Market Pulse video as Baker Tilly Wealth Management advisors summarize changes in the economy and lend insight into market behavior and outlook.

January 2023

2022 proved to be a challenging year for markets, as both equities and fixed income were negatively impacted by the Federal Reserve’s effort to combat the worst inflation seen since the 1970s. The market is focused on slowing growth for both the domestic and global economies, as expectations have been dampened by slowing demand and higher interest rates. The question for investors in 2023 now remains: How deep will a potential recession be and how much has the market already priced in?

Watch our latest Market Pulse video and listen as Baker Tilly Wealth Management’s Jeremy Robert discusses where both interest rates and the market stand going into 2023, in under four minutes.

The market rallied in November amid hopes that inflation in the U.S. may have peaked, paving the way for the Federal Reserve to slow the pace of their interest rate hikes. In addition, other positive support came from China announcing that they will loosen their strict zero Covid policy, which has weighed on the global economy.

When it comes to the markets in the short term, it is very difficult to predict what will happen day-to-day or week-to-week. For example, the S&P 500 was up 7.99% in October and down 18.76% year-to-date. Many people likely did not expect such a strong October, which is why looking at history over the longer term provides more certainty when making financial planning decisions.

Market volatility remains heightened due to the Federal Reserves “higher for longer” monetary policy. And, the market continues to struggle to price in the impact that higher interest rates will have on valuations and the growth of the economy.

2022 continues to present investors with challenges, including a positive correlation between stocks and bonds, which has made markets difficult to navigate. And, the market remains concerned about heightened inflation and slowing growth as interest rates are expected to rise.  

"The Market Pulse summarizes the notable happenings in the global economy and seeks to lend insight into market behavior and expectations."
Melissa Santas Peterson, CFA, Executive Managing Director, Baker Tilly Wealth Management

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