Global stocks and bonds started 2023 strong, with most indices delivering first-quarter gains.  However, it was a bumpy ride.  Persistent challenges from inflation and Fed policy, along with new obstacles from banking sector unrest, generated sharp volatility. For the quarter, U.S. large-cap stocks were up 7.5% and small-cap stocks gained 2.7%. In a reversal from last year, U.S. growth stocks were up 14.4% for the quarter, trouncing value stocks which were up 1.0%. Foreign-developed stocks were the top performers for the quarter, up 8.6%, while emerging stocks finished up 4.0%. Core U.S. bonds were up 3.0% for the quarter as U.S. Treasury yields declined. Inflation-sensitive bonds were up 3.5% and high-yield bonds had a solid gain of 3.6%.   

In this quarter's commentary, we focused on the following topics:

• Economic Outlook: we review some of the changes to the economic outlook and the increased likelihood of a recession in the next 12 months.  
• Financial Markets Outlook: we highlight our outlook for several different asset classes, including:
  • US Stocks 
  • Foreign Developed Market Stocks
  • Emerging Market Stocks.
  • US Fixed Income

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Click here to read the full commentary.