Market commentary

Markets continued to grapple with volatility in April, as rising interest rates and broader macroeconomic uncertainty sent most major asset classes sharply lower.

Sharply higher interest rates, geopolitical tensions, a volatile commodities complex, inflation, and the ultimate course of the Fed’s tightening cycle have caused volatility for much of the quarter as markets have been forced to quickly recalibrate expectations given these rapidly evolving situations.

January’s volatility spilled into February with most major asset classes posting another monthly decline. Continuing concerns over inflation, interest rate volatility and the impending Fed tightening cycle weighed on markets to start the month before focus shifted squarely to geopolitical tensions.

It was a volatile start to the year for most major asset classes. Ongoing COVID concerns, elevated inflation, rising interest rates and a hawkish Fed roiled markets for much of the month.

Credit markets were positive in December. After two straight monthly declines, HY bonds posted their best month of the year, up 1.88%, while loans returned 0.64%.

Credit markets declined in November. Loans returned -0.16% while HY bonds were down -1.02%, their second monthly decline and worst performance since March 2020.