Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 
 
Blog Home
 

  Alternatives Update 2nd Quarter 2022
Posted Under: Alternatives

The second quarter of 2022 offered up a toxic brew for capital markets with steep losses in almost every traditional asset class. Alternatives on the other hand offered a brighter picture for investors. Most alternative categories did well on a relative basis and others even posting positive returns amidst the carnage. The economic situation grew dimmer with projected slowing and even potentially negative GDP growth and inflation levels so high they threaten to induce hypoxia or at least a 1970s flashback. There was some hope that peak inflation had been reached and more moderate levels would allow for a less aggressive rate path. Unfortunately, the Producer Price Index (“PPI”) remained above 10% and the Consumer Price Index (“CPI”) moved higher and the war in Ukraine continued with little hope for a near-term solution. 

In June, the Federal Reserve (the “Fed”) raised the Fed Funds Target Rate by 75 basis point (“bps”), the largest increase since 1994. Along with a stunning large hike, there was a reiteration that reigning in of inflation was the top priority no matter the economic costs. This of course is quite a turnaround from two years ago (August 2020) when at the annual Jackson Hole symposium, Fed Chair Jerome Powell announced a major shift in policy: the central bank would allow inflation to move above its 2% target as inflation was not a worry. In hindsight, the timing of that policy change looks just short of disastrous. Investors are understandably nervous that once again, the Fed may be implementing a significant policy shift with questionable timing. One indicator of how challenging the situation is, is the gap between the CPI and Fed Funds rate. While it has recently narrowed, it is still near record highs or the 99th percentile, which means there is a long way to go in the inflation battle.

Click here to continue reading.

Posted on Monday, July 25, 2022 @ 10:26 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
INVESTMENT INSIGHTS


 PREVIOUS POSTS
Closed-End Fund Second Quarter 2022 Review
Asset Flows Monitor July 2022 Edition
Asset Flows Monitor June 2022 Edition
Heightened Volatility Yields a Resurgence for Dividend ETFs
Asset Flows Monitor May 2022 Edition
Alternatives Update 1st Quarter 2022
Closed-end Fund Review - First Quarter 2022
Asset Flows Monitor April 2022 Edition
Asset Flows Monitor March 2022 Edition
Is it Too Late to Allocate to Commodities ETFs?
Archive
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2022 All rights reserved.