Both stocks and bonds have gotten hit hard at the start of the year. Especially hard hit have been long-duration assets ― including 20+ year U.S. Treasurys and the high-flying NASDAQ Composite, which are down 3.89% and 3.19% respectively as of January 6. The yield on the ten-year U.S. Treasury note has jumped to 1.74% and WTI crude oil is up to nearly an 80-handle. The only asset class with a positive return is the S&P SmallCap 600 index, which is smoking its cousin the Russell 2000 index, after pummeling it in 2021 ― for the good reasons of better profitability, greater liquidity and higher quality. Don’t read anything Machiavellian into this pullback, it’s just Santa Claus taking a breather after a breathtaking year-end rally. Fundamentals are solid.
Voya Investment Management has prepared this commentary for informational purposes. Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults (5) changes in laws and regulations and (6) changes in the policies of governments and/or regulatory authorities. Past performance is no guarantee of future returns.
The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Strategy holdings are fluid and are subject to daily change based on market conditions and other factors.