Weekly Market Commentary, April 11, 2022

“Headwinds to Global Growth”

Jeffrey Roach, PhD, Chief Economist, LPL Financial

Lawrence Gillum, CFA, Fixed Income Strategist, LPL Financial


April 15, 2022

Dear Friends and Clients,

I promised Deborah to keep this week's comments brief.

Attached find the LPL Research Weekly Commentary.  The theme is slowing economy in the US and Globally.  It references headwinds.  We all have heard the pundits on cable financial news talk about them; supply chain issues, inflation, the war between Russia and the Ukraine, new Covid 19 variants, energy prices, inversion of the yield curve and not least of all expectations the Federal Reserve will raise interest rates too aggressively.

All of the above foreshadows recession. 

 It seems we face battalion after battalion of woes. It has ever been thus.  Yet history schools us that there are more shadows of recession than recessions.  Recessions are not the end of the world.  They are part of the business cycle.  Typically, stocks go down during a recession.  They usually start down before the recession.

Then again, sometimes stocks go down and there is no recession.  Leading indicators sometimes lead only to look back and see no one is following.  I think that happened to me as a young infantry lieutenant back in the day.

Out of adversity arises benefit.  The slowing domestic and global economy will constrain the Fed to be careful before grabbing all the punch out of bowl.  Investors will invest with more circumspection.  Risk will be respected.  New opportunities will emerge and old reliables will be appreciated. 

In recent decades the time between recession and growth has been extended.  Recessions have been getting shorter.  Growth cycles longer.  We remember how sharp and painful the Great Recession of 2008 was. We tend to forget how remarkably the recovery was. 

Besides, after all the fretting there may be no recession.  Just the economy slowing down to navigate across a few speed bumps.  We will know for certain after the fact.  Then, whatever happens, the pundits on cable will take credit for predicting it.

I predict a beautiful spring weekend, especially here in Western North Carolina. Easter is Sunday. Passover starts tonight.  Today is both Jackie Robinson Day for Major League Baseball and Tom Seaver Day, in particular if you are a Met's fan.  I have not met one of those in a while, but Tom Seaver was one of the greats. 

Jackie Robinson was more than a baseball great and hero who broke the color barrier in baseball.  He was a football legend at the University of California in LA.  A few weeks before the Japanese attack on Pearl Harbor he was part of a college All Star team that traveled around the Hawaiian Islands playing against the various intramural teams of the Army and Navy units there. 
One of those teams was the Army Team at Schofield Barracks on Oahu.
The All Stars crushed the Schofield Barracks team.  But a young corporal Charles M. Judge was so taken by the incredible speed of Jackie Robinson, he made it a point to get a polaroid picture of the future icon. 

My dad was a Pearl Harbor Survivor.  He served almost without interruption for the duration of WWII in the Pacific Theatre.  He saw a lot of things he never spoke of.  But if the topic of the War came up, he always let it be known, he played football against Jackie Robinson.  And he had the polaroid to prove it! So there!

We don't know if there will be a recession, or when, or how long or how deep.  We know we will have a beautiful spring weekend and my guess is that if and when there comes a recession there will also be good things to remember when we look back on it.

Wars, earthquakes, hurricanes and recessions have one thing in common; at some point they end.  Don't let anticipation, of something that may not happen and you can't prevent, steal your joy.  Just make sure you have your polaroid camera or its digital equivalent ready when the truly remarkable crosses your path.

Oops. Sorry Deb, this was too long. I'll do better next week.



Stephen R. Judge, ChFC CLU

Financial Advisor

LPL Financial  
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