Executive Summary: Mid-Year 2021
Growth – COVID-19 risk continues receding, supporting reopening around the country. This economic activity should continue to support employment improvement and earnings recovery.
Inflation – The industries most impacted by COVID-19 precautions are working to build supply in the face of rising demand. All told, this type of inflation is good news because the alternative reality is much worse for portfolios.
Markets – The path forward is likely to remain volatile as forecasts refocus on when monetary and fiscal policy will shift.
Fixed Income – Taxable bond yields have come down as long-term inflation/growth outlook moderates. Municipal bond yields remain low in consideration of the potential for higher taxes and a lower supply market.
Equities – Earnings multiples continue to decline as forecast earnings are realized. Earnings growth will likely moderate but remain strong, supporting equity prices and offsetting multiple contraction.
Outlook – We like the recession exit velocity of the United States and although the Federal Reserve struck an ever so slightly more hawkish tone last month, the recovery momentum and fiscal situation call for continued near-term support of asset prices.
Taxes – We are monitoring the ongoing legislative process surrounding changes to the tax code and will analyze the keep/sell decision that could be prompted by proposed plans.
Chief Investment Officer Biography
Michel Del Buono, PhD
Senior Vice President, Chief Investment Officer
Michel joined Jordan Park in 2018. Prior to joining Jordan Park, Michel was a Managing Director and Global Strategist at Makena Capital Management, a global investment firm managing approximately $19 billion for endowment and taxable investors. Michel helped oversee global investment strategy, currency investments and risk management for the firm. He previously worked as the sole Investment Analyst at Scion Capital, a San Jose-based hedge fund, and at McKinsey & Co, where he served private equity clients with their due diligence and valuation work. He serves on the Investment Committee for Dignity Health.
Michel earned his BSc in Systems Engineering with High Honors from the University of Virginia, his MSc in Engineering-Economic Systems and Operations Research from Stanford, and his MPhil in Economics from Girton College, Cambridge. He earned his PhD in Management Science and Engineering with a focus in applied economics from Stanford University, where he was a DARPA fellow.
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