Monthly Review - April 2023

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May 3, 2023

Our Perspective

As we write this the announcement came in that JP Morgan will acquire First Republic Bank, in what is the second biggest bank failure in U.S. history. Unprecedented levels of debt, the reach for yield during a decade of ZIRP, and a historically fast pace in the increase in interest rates are starting to show who’s possibly been swimming naked. As the tide of easy money goes out, the question everyone’s asking is who’ll be found to have been swimming without any clothes on?

We remain of the view that the cost-of-living crisis, the boom-and-bust of crypto-mania and the failure of now four US regional banks, are all either direct or indirect outcomes of fiscal and monetary policies over the last decade. Furthermore, halfway through Q1 earnings season, and corporate profits continue to slow as higher prices and rising cost of capital is putting pressure on corporate margins. Financial conditions have tightened sufficiently to turn the policy-induced post-pandemic boom into a deflationary bust; we currently see a 55% probability of a ‘deflationary bust’ in our factor quadrant.

Whilst inflation continues to slow, it’s perhaps not slowing quick enough to bring about a change of course from central banks. This is how economic downturns start: forcing solutions to latent problems from the past.

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For further information on any of our services, or if you would like to arrange a meeting with an investment manager to see how we can work with you, please get in touch.

LeifBridge Investment Services
Shard Capital Partners
Floor 2, 70 Mark Lane
London, EC3R 7NQ
United Kingdom

Telephone: +44(0)20 7186 9900


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LeifBridge is a trading name of Shard Capital Partners LLP. Shard Capital Partners LLP is a limited liability partnership, registered in England with registration number OC360394. Shard Capital Partners LLP Registered office:36-38 Cornhill, London, EC3V 3NG.. Shard Capital Partners LLP is authorised and regulated by the Financial Conduct Authority in the United Kingdom, reference number 538762.

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