Category: Market Commentary

March 13, 2023

The Silicon Valley Bank Collapse: A Significant Event But Not a 2008-Like Threat to the Financial System

As many of you may have seen, Silicon Valley Bank (SVB) experienced a classic “run on the bank” last week and, on Friday, was placed in receivership by the Federal Deposit Insurance Corporation (FDIC).  As part of Coldstream’s mission, we thought it important to communicate our views on why the bank failed, what the potential implications [...]

January 20, 2023

The End of an Era

After the Great Financial crisis of 2008 and until 2020, the US economy was in a prolonged period of low inflation and relatively slow growth.  During this period, the Fed thought it necessary to stimulate the economy to meet its 2% inflation target by keeping the Fed Funds rate low and buying bonds in the [...]

Contributions from: Howard Coleman, JD

September 30, 2022

The Triple Threat

High inflation, Fed rate hikes, and recession risk have resulted in the S&P 500 falling into bear market territory this year. They have also resulted in the US bond market having its worst year ever, failing to provide the diversification benefit that bonds have typically provided. For investors, the challenge is to be forward-looking instead [...]

Contributions from: Howard Coleman, JD

July 15, 2022

Where From Here: A Recap of the Second Quarter and Thoughts Going Forward

Until mid-June, the Fed was widely perceived as behind the curve in fulfilling its mandate of price stability. For example, even though inflation was increasing in the first quarter, the Fed was still stimulating the economy by buying government securities and mortgages because of its mistaken view that inflation was transitory. In May, inflation, as measured by [...]

Contributions from: Howard Coleman, JD

June 17, 2022

A Difficult Year

Both the equity and fixed income markets globally have experienced significant drawdowns this year, due, primarily, to inflation. The U.S. equity market is now in a bear market, down approximately 25% from its highs, and the protective role that bonds usually play when equity markets fall has not materialized this year. When equity prices fall, [...]

Contributions from: Howard Coleman, JD

May 13, 2022

A Note on the Recent Volatility

So Far This Year Coming into 2022, both stocks and bonds were richly valued. Valuations were at a premium because corporate profitability was strong, interest rates were low, the economy was re-opening, and market participants thought inflation was temporary, primarily due to supply chain issues that would resolve themselves. This year, as we are all experiencing, inflation [...]

Contributions from: Howard Coleman, JD

April 18, 2022

The Inflation Story

Simply put, inflationary pressures occur when demand outstrips supply.  However, when demand dries up, recession often follows as the economy shrinks. During the last two periods of great economic stress, the Great Financial Crisis of 2008 and the COVID-related shut-down of March 2020, the Federal Reserve focused on creating demand to sustain the economy and [...]

Contributions from: Howard Coleman, JD

February 25, 2022

Our View of the Impact of the Russian Invasion on Markets

Update as of 03/10/2022 Like many of you, we greatly admire the determination and perseverance of the Ukrainian people and are appalled by the indiscriminate brutality of the Russian invasion.  While it is impossible to predict how this conflict will end, we do expect significant market volatility in the near term largely driven by daily [...]

Contributions from: Howard Coleman, JD

January 20, 2022

Looking Past Covid

Until the onset of COVID-19, the US economy had been in a period of slow and steady growth and low inflation since the recovery from the 2008 Great Financial crisis.  COVID-19 broke that cycle – after an initial and dramatic decline, the US economy and financial markets recovered quickly.  This was due to massive governmental [...]

Contributions from: Howard Coleman, JD