Q2 Market Commentary By Tall Oak

Market dynamics shifted quickly in the quarter, with inflation gaining ground in April and May while aggressive central bank action increased the potential for an economic slowdown. Inflation’s current lofty levels are not likely to unwind quickly. However, the expected pace and magnitude of interest rate increases lower the probability of a soft economic landing. Raising interest rates works best to combat inflation caused by high demand and low supply. It slows demand and reduces prices.

Today, we are in a supply crunch. Energy shortages, lingering supply shortages related to COVID lockdowns (especially in China), de-globalization trends and global coordination of sanctions against Russia are all increasing supply-side issues. Unfortunately, supply-induced inflation is harder to solve with higher interest rates. To do so, central banks need to be considerably more hawkish. In turn, central bank tightening fuelled recession fears in June as markets grappled with the potential for a significant economic slowdown.

In this edition, we’ll share our perspective on current market themes and trends plus the latest economic developments. We’ll dive deeper into the levers we use to protect capital and how we take advantage of long-term investment opportunities when they arise.

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The views expressed in this commentary are those of Tall Oak Capital Advisors as at the date of publication and are subject to change without notice. This commentary is presented only as a general source of information and is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax or legal advice. Statistics, factual data and other information are from sources Tall Oak believes to be reliable but their accuracy cannot be guaranteed. This commentary is intended for distribution only in those jurisdictions where Tall Oak Capital Advisors are registered. Securities-related products and services are offered through Raymond James Correspondent Services Ltd., member Canadian Investor Protection Fund. Insurance products and services are offered through Gryphin Advantage Inc., which is not a member-Canadian Investor Protection Fund. This commentary may provide links to other Internet sites for the convenience of users. Tall Oak Capital Advisors is not responsible for the availability or content of these external sites, nor does Tall Oak Capital Advisors endorse, warrant or guarantee the products, services or information described or offered at these other Internet sites. Users cannot assume that the external sites will abide by the same Privacy Policy which Tall Oak Capital Advisors adheres to.