Dec 14, 2023 · 49 min · 12 segments
In this episode Geoff Castle, Lead Portfolio Manager of Pender's Fixed Income portfolios, hosts Callum Thomas, founder and head of research of Topdown Charts for their annual podcast. Subtitle…
Callum ThomasGuestGeoff CastleHostJust to refresh our memories, we were going through 2022, the Fed had been executing on its really unprecedented rate hiking cycle in terms of how fast it was going and from the low basis started.
And we were sitting here in November 2022, thinking about 23 as a year when potentially there might be a Treasury rally of some nature.
Perhaps, Callum, if you want to give a bit of retrospective on 2023, what went the way you expected and what surprised you?
Yeah, and I think I can remember last year when we were talking, I was reflecting on the point that in 2021 and 22, I got just about everything right.
And lo and behold, but I think probably the main things that were – at least wrong for now or most of the year, but probably actually still quite key to have on the radar is the lack of recession, despite all the various leading indicators that we're pointing to recession and the quote of long and variable lags of monetary policy with a due emphasis on the variable aspect.
And I mean, that's quite obviously linked up with the path of bond yields and bond markets in general is that, yes, there was a decent valuation signal for bonds.
And, you know, the macro indicators were pointing that things would be going lower and, you know, various factors were lining up, which now are actually screaming, but we'll talk about that later.
And then the other aspect there, which, again, is all sort of interlinked is just the You know, most of the indicators are saying odds are in favor of bonds outperforming stocks, whereas, you know, things actually went the other way there as well as we had this, I think, surprising to probably quite a few people just how resilient and effervescent the equities, especially the tech stocks, had been this year.
Just to refresh our memories, we were going through 2022, the Fed had been executing on its really unprecedented rate hiking cycle in terms of how fast it was going and from the low basis started.
And we were sitting here in November 2022, thinking about 23 as a year when potentially there might be a Treasury rally of some nature.
Perhaps, Callum, if you want to give a bit of retrospective on 2023, what went the way you expected and what surprised you?
Yeah, and I think I can remember last year when we were talking, I was reflecting on the point that in 2021 and 22, I got just about everything right.
And lo and behold, but I think probably the main things that were – at least wrong for now or most of the year, but probably actually still quite key to have on the radar is the lack of recession, despite all the various leading indicators that we're pointing to recession and the quote of long and variable lags of monetary policy with a due emphasis on the variable aspect.
And I mean, that's quite obviously linked up with the path of bond yields and bond markets in general is that, yes, there was a decent valuation signal for bonds.
And, you know, the macro indicators were pointing that things would be going lower and, you know, various factors were lining up, which now are actually screaming, but we'll talk about that later.
And then the other aspect there, which, again, is all sort of interlinked is just the You know, most of the indicators are saying odds are in favor of bonds outperforming stocks, whereas, you know, things actually went the other way there as well as we had this, I think, surprising to probably quite a few people just how resilient and effervescent the equities, especially the tech stocks, had been this year.
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