The capital markets have been operating in a nervous phase of uncertainty and volatility from the beginning of the year. Investors have been unable to gain any meaningful traction as nearly every traditional asset class has been under pressure.

We are seeing a large-scale conflict between favorable economic data and decent corporate earnings, with a decades-high rate of inflation and the appalling war in Ukraine. Economic fundamentals and growing corporate profits would normally be net positives for the markets. However, high inflation is quickly driving tighter monetary policy and higher interest rates. This, along with ongoing geopolitical distress, are net negatives for the markets.