Dear friends of Arcus Capital Partners,
We hope this letter finds you well and that you had a wonderful holiday season. The final quarter of 2021 followed the recent trend of market-moving headlines focused on COVID-19 – this time, it was the Omicron variant. Even so, investors looked through the noise once the medical data showed that Omicron is less severe than Delta, especially for vaccinated individuals. Global equities finished the quarter with mixed results but were generally positive across the broad indexes. Short-term interest rates moved higher in anticipation of 2022 rate hikes by the Federal Reserve, while longer-term rates remained anchored. Lastly, commodities finally paused on the back of US dollar strength and negative growth revisions due to Omicron. Our 2022 outlook is positive for equities and commodities but negative for rate-sensitive fixed income. We anticipate much higher levels of equity market volatility compared to the last two years but believe that investors should add on weakness.