ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ETF Strategist Channel
  2. GLOBALT Spotlight: You Keep Changing Your Story
ETF Strategist Channel
Share

GLOBALT Spotlight: You Keep Changing Your Story

GLOBALT Investments   Mar 01, 2023
2023-03-01

Author: Thomas Martin, CFA, Senior Portfolio Manager

Consistency—Not.  If the market was on the stand, the prosecutor might be saying, “So let me get his right, Mr. Market, just last week you said that there was not going to be a recession, and the week before that, you said there was, and now…well, now, you’re saying that maybe we are going to have a recession. Which is it?”

To which the defendant replies, “My story keeps changing, yes, that’s true Mr. Prosecutor, but it’s not because my story is inconsistent, it’s because the facts are inconsistent. The facts keep changing, sir, and my story changes to stay consistent with the facts.”

Narrative Volatility. We have the VIX to measure equity volatility and the MOVE to measure interest rate volatility, but we have no analogous measure for “narrative volatility.” The word “narrative” as applied to the descriptions of what is going on in the markets has crept into the (over)usage lexicon over the last few years, and is a great way to keep in mind that we are constantly trying to tell ourselves stories to help us understand a confusing reality. Sometimes these stories have longer-term staying power and stick around for a while. Other times, like lately, they seem to flutter back and forth on the winds like a butterfly. Market pundits, in the meantime, do their best to capture their rapt audiences’ imaginations with stories designed to jolt investors into some sort of action, sometimes through dire warnings, and the more dire the better. There are almost always competing narratives, but there is usually one that can be considered the consensus, and it, by nature, tends to be slower to change. Not so much lately though, as the consensus has had the feel of changing more frequently. Thus, increased narrative volatility.

What’s in play…is still the same old stuff, however. The sub-narratives. Still starts with inflation, which is closely followed by employment, the consumer, interest rates and the U.S. dollar. All with intertwining plots that influence each other. And sentiment, the animator of the story.

The last page. What we would like to know is how it turns out. If we could flip to the end. Where it says how stocks and rates ended up. We are trying to guess the arc of the story between here and there. Where we end up is thought to be largely dependent on whether and when we have a deep recession, a mild recession, or no recession.

Twists and turns. Inflation has been hard to get right. The consumer has been hard to get right. Corporate behavior has been hard to get right. The Fed has been hard to get right. An earlier narrative was that the Fed was moving so far so fast, they would kill inflation and also kill consumer spending and the economy in the process, and that it would happen early this year and then the Fed would have to pivot and cut rates later this year. Then the story was that the rate increases would cool inflation but not kill employment too much, and there would be a mild recession or soft landing. The Fed would still have to pivot, but maybe a little less. Then the story was that inflation would slow just enough that the Fed could pause, but couldn’t pivot, but that the consumer and employment would be fine, and we wouldn’t have a downturn (“no landing”) at all (how exciting). And then the story changed to that the Fed is going to have to push out the pause until later this year, and will overdo it and then have to pivot later, but we will have a recession now, except that it will be in 2024 (you know, next year). The markets sold off, the markets went up, the markets sold off. And somebody said something about running out of oxygen.

What to do. The changing incoming data and the changing perceptions around what is happening and what is going to happen are in-line with GLOBALT’s market outlook. We are generally positive on the economy and that the peak is in view on the rate cycle. We do, however, note that the volatility of potential outcomes for the future remains very wide and is based on very real, unsettled, fundamental factors. We are maintaining our conservatively positive positioning as we work our way through this.

For more news, information, and analysis, visit the ETF Strategist Channel.

GLOBALT is an SEC Registered Investment Adviser since 1991 and, effective July 10, 2013, remains a Registered Investment Adviser through a separately identifiable division of Synovus Trust N.A., a nationally chartered trust company. This information has been prepared for educational purposes only, as general information and should not be considered a solicitation for the purchase or sale of any security. This does not constitute legal or professional advice, and is not tailored to the investment needs of any specific investor. Registration of an investment adviser does not imply any certain level of skill or training. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information may be required to make informed investment decisions, based on your individual investment objectives and suitability specifications. Investors should seek tailored advice and should understand that statements regarding future prospects of the financial market may not be realized, as past performance does not guarantee and/or is not indicative of future results. Content may not be reproduced, distributed, or transmitted in whole or in part by any means without written permission from GLOBALT. Regarding permission, as well as to receive a copy of GLOBALT’s Form ADV Part 2 and Part 3, contact GLOBALT’s Chief Compliance Officer, 3400 Overton Park Drive, Suite 200, Atlanta GA 30339.  You can obtain more information about GLOBALT Investments and its advisers via the Internet at adviserinfo.sec.gov, sponsored by the U.S. Securities and Exchange Commission.

The opinions and some comments contained herein reflect the judgment of the author, as of the date noted.

Investment products and services provided are offered through Synovus Securities, Inc. (SSI), a registered Broker-Dealer, member FINRA/SIPC and SEC Registered Investment Adviser, Synovus Trust Company, N.A. (STC), Creative Financial Group, a division of SSI. Trust services for Synovus are provided by STC.

Regarding the products and services provided by GLOBALT: 

NOT A DEPOSIT.    NOT FDIC INSURED.    NOT GUARANTEED BY THE BANK.    MAY LOSE VALUE.    NOT INSURED BY ANY FEDERAL AGENCY

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X