Full Report: GWII Quarterly Report December 2022
Market Commentary
Following a bearish Q3, the fourth quarter closed the year with a better economic environment despite recession fears. Some major highlights are a better-than-expected GDP growth of 2.9%, the Federal Reserve slowing down its interest rate hikes from 75-basis points in November to 50-basis points in December to tame inflation, China relaxing its stringent COVID policies to ease supply chain challenges and a slight decline in the unemployment rate from 3.7% in October to 3.5% in December showing a resilient labor market. The consumer price index also declined by 0.1% in December, after rising by 0.4% in October. This brought inflation to its lowest rate of 6.5% in December since October 2021.
The S&P 500 closed the fourth quarter with a growth of 7.6% and was the only quarter in 2022 with a positive return. The index however closed the year with a decline of 18.1%. All sectors except the Communication and Consumer Discretionary showed positive returns. The top three winners were Energy 22.8%, Industrials 19.2% and Materials 15.1%. The Real Estate sector closed the quarter with a positive return of 3.8% as mortgage rates cooled off.
For the quarter ended December 31, 2022 the GWII’s Student Investment Funds in aggregate underperformed the benchmark with a return of 5.7% vs. 7.6% for the S&P 500. The funds also underperformed the benchmark in the calendar year -19.2% vs. -18.1% for the S&P 500.
Barikisu Muntari Sumara, GWSB MBA ‘23