The most recent week of April saw a mass exodus in the global bond market as investors were fleeing in concerns of economic growth. Based on a report from Refinitiv Lipper investors dropped $14.5 billion in bond investment, over ten times the losses from the previous week. Ten year treasury rose sharply to a near three year high, which sent bond prices falling. While inflation is rampant, March actually saw a little bit of relief in core prices as inflation was mainly driven by food and energy. One area of bond funds that hasn’t seen investors scared off is inflation protected funds which are on their seventh straight week of gains and inflows. More concerning than just the tightening cycle is the growth that could result in overtightening which could send the economy reeling. 

Finsum: This could be the bottom of the bond market, investors should prepare for a little bit of a rally if supply chains free up. 

Goldman raised the odds of a recession to over one-third in the next two years. The tightening cycle and rate hikes are causing waves in markets and the Fed could bump the Federal Funds Rate eight times this year. Overall economic health in the G10 helps mitigate the possibility of a recession, but it's still a possibility. Experts are saying that the Fed has a narrow path for a soft landing if they want inflation to come down to 2% and keep unemployment from rising. There are signs that the economy is beginning to weaken as consumer confidence is wavering. Still, the stock market doesn’t seem to pricing in a recession, however, the experts on Wallstreet and financial services are beginning to prepare.

Finsum: Look to the yield curve for recession predictions its the best sign and its beginning to warn investors.

Everyone is racing to develop and deliver a new ESG product, and annuities are just the latest on this trend. BlackRock is teaming up with RetireOne and Midland National to deliver an SG option for a Fixed Index Annuity. The index will seek to minimize its exposure to environmental risk and invest in companies with lower C02 emissions, better data privacy, and workforce diversity. ESG assets as a whole could make up 50% or more of assets under management by 2025 and this is an indication of how that trend is entering other industries. Disclosure and ESG risks are prominent considerations for many companies.

Finsum: This is a great option for investors wanting income and ESG to tackle two birds with one stone.

Charles Stanley is diving deeper into ESG with a new suite of model portfolios geared at responible passive investing. Jane Bansgrove will manage the model portfolios and is the investment director of Charles Stanley’s responsible investment committee. Studies have shown that many have put more emphasis on ESG and sustainability due to the Covid-19 pandemic. The funds will be available across different risk levels with different target growth rates that correspond to them. They are designed to be low cost and efficient like many other passive ESG funds.

Finsum: Model portfolios are a natural marriage with ESG, because thematic investing caters itself to a model that can make selections.

Growth and value don’t typically have strong co-movement with one and other unless its a total market rally, however JPMorgan’s Kolanovic is telling investors that forking central banks, rising commodities, and stock sell off are the catalyst for the bulls to move on value and growth. He told investors to construct a barbell portfolio with bio-tech tech and innovation pulling growth and metals and mining leading the way for value. Its the perfect swarm of macro factors that can elevate these markets. International growth stock have fallen so far they are beginning to show P/E ratios that look like value stocks and should intrigue investors. JPMorgan says the war in Ukraine could persist which will continue to elevate commodities.

Finsum: This is a great time for traditional energy, particularly for bond investors stuck in the cold.