Earnings season has kicked off with banks churning through Q1-2022 reports and conference calls. D-Sol had some notable commentary which I’ve excerpted below.
De-globalization in motion:
In recent decades, we’ve grown used to low inflation, low interest rates and the free flow of people and goods across national borders. I believe we’re in through a period that won’t be — that won’t be the case and the consequences for financial markets will be meaningful.
Stagflation possible:
Beyond geopolitics, I’m keeping a close eye on several other trends. While U.S. unemployment levels are low and wages are increasing, inflation is the highest it’s been in decades. We’re seeing new stress on supply chain and commodity prices and U.S. households are facing rising gas prices as well as higher prices for food and housing. We’ve also seen an increased risk of stagflation and mixed signals on consumer confidence.
Flows to alternative investments to continue:
I would say that there are a variety of secular tailwinds that are still driving lots of institutional capital on a global basis towards broad alternatives platforms.
I think despite the volatility that exists in markets, those trends continue to be in place. And I think you’ll continue to see secular growth in the amount of capital, institutional capital that’s allocated to alternatives platforms for quite some time.
Financial transactions peaked:
Well, there’s no question that — and I’ve tried to say it in different ways, and there’s no science to this. And no one knows obviously, where the macro environment goes as we go forward. But when you look at the volumes and the levels of 2020 and 2021, we’ve said repeatedly that those volumes were at levels that were not sustainable and are a reflection of some of that monetary fiscal policy.
Source: Goldman Sachs Q1-2022 Earnings Transcript
Disclosure: We don’t own shares of GS, this is not investment advice. Do your own work.