Confirm you would like to unsubscribe from this list

Don't save

Remove strategy

Confirm you would like to remove this strategy from your list

Welcome to Thornburg

Please select your location and role to help personalize the site.
Please review our Terms & Conditions

For Institutional / Wholesale / Professional Clients

The content on this website is intended for institutional and professional investors in the United States only and is not suitable for individual investors or non-U.S. entities. Institutional and professional investors include pension funds, investment companies registered under the Investment Company Act of 1940, financial intermediaries, consultants, endowments and foundations, and investment advisors registered under the Investment Advisors Act of 1940.


Please read the information below. By accessing this web site of Thornburg Investment Management, Inc. ("Thornburg" or "we"), you acknowledge that you understand and accept the following terms and conditions of use.


Products or services mentioned on this site are subject to legal and regulatory requirements in applicable jurisdictions and may not be licensed or available in all jurisdictions and there may be restrictions or limitations to whom this information may be made available. Unless otherwise indicated, no regulator or government authority has reviewed the information or the merits of the products and services referenced herein. Past performance is not a reliable indicator of future performance. Investments carry risks, including possible loss of principal.

Reference to a fund or security anywhere on this website is not a recommendation to buy, sell or hold that or any other security. The information is not a complete analysis of every material fact concerning any market, industry, or investment, nor is it intended to predict the performance of any investment or market.

All opinions and estimates included on this website constitute judgements of Thornburg as at the date of this website and are subject to change without notice.

All information and contents of this website are furnished "as is." Data has been obtained from sources considered reliable, but Thornburg makes no representation as to the completeness or accuracy of such information and has no obligation to provide updates or changes. Thornburg disclaims, to the fullest extent of the law, any implied or express warranty of any kind, including without limitation the implied warranties of merchantability, fitness for a particular purpose and non-infringement.

If you live in a state that does not allow disclaimers of implied warranties, our disclaimer may not apply to you.

Although Thornburg intends the information contained in this website to be accurate and reliable, errors sometimes occur. Thornburg does not warrant that the information to be free of errors, that the functions contained in the site will be uninterrupted, that defects will be corrected or that the site and servers are free from viruses or other harmful components. You agree that you are responsible for the means you use to access this website and understand that your hardware, software, the Internet, your Internet service provider, and other third parties involved in connecting you to our website may not perform as intended or desired. We also disclaim responsibility for damages third parties may cause to you through the use of this website, whether intentional or unintentional. For example, you understand that hackers could breach our security procedures, and that we will not be responsible for any related damages.

Thornburg Investment Management, Inc. is regulated by the U.S. Securities and Exchange under U.S. laws which may differ materially from laws in other jurisdictions.

Online Privacy and Cookie Policy

Please review our Online Privacy and Cookie Policy, which is hereby incorporated by reference as part of these terms and conditions.

Third Party Content

Certain website's content has been obtained from sources that Thornburg believes to be reliable as of the date presented but Thornburg cannot guarantee the accuracy, timeliness, completeness, or suitability for use of such content. The content does not take into account individual investor's circumstances, objectives or needs. The content is not intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services, nor does it constitute investment advice and should not be used as the basis for any investment decision.


No determination has been made regarding the suitability of any securities, financial instruments or strategies for any investor. The website's content is provided on the basis and subject to the explanations, caveats and warnings set out in this notice and elsewhere herein. The website's content does not purport to provide any legal, tax or accounting advice. Any discussion of risk management is intended to describe Thornburg's efforts to monitor and manage risk but does not imply low risk.

Limited License and Restrictions on Use

Except as otherwise stated in these terms of use or as expressly authorized by Thornburg in writing, you may not:

  • Modify, copy, distribute, transmit, post, display, perform, reproduce, publish, broadcast, license, create derivative works from, transfer, sell, or exploit any reports, data, information, content, software, RSS and podcast feeds, products, services, or other materials (collectively, "Materials") on, generated by or obtained from this website, whether through links or otherwise;
  • Redeliver any page, text, image or Materials on this website using "framing" or other technology;
  • Engage in any conduct that could damage, disable, or overburden (i) this website, (ii) any Materials or services provided through this website, or (iii) any systems, networks, servers, or accounts related to this website, including without limitation, using devices or software that provide repeated automated access to this website, other than those made generally available by Thornburg;
  • Probe, scan, or test the vulnerability of any Materials, services, systems, networks, servers, or accounts related to this website or attempt to gain unauthorized access to Materials, services, systems, networks, servers, or accounts connected or associated with this website through hacking, password or data mining, or any other means of circumventing any access-limiting, user authentication or security device of any Materials, services, systems, networks, servers, or accounts related to this website; or
  • Modify, copy, obscure, remove or display the Thornburg name, logo, trademarks, notices or images without Thornburg's express written permission. To obtain such permission, you may e-mail us at info@thornburg.com.

Severability, Governing Law

Failure by Thornburg to enforce any provision(s) of these terms and conditions shall not be construed as a waiver of any provision or right. This website is controlled and operated by Thornburg from its offices in Santa Fe, New Mexico. The laws of the State of New Mexico govern these terms and conditions. If you take legal action relating to these terms and conditions, you agree to file such action only in state or federal court in New Mexico and you consent and submit to the personal jurisdiction of those courts for the purposes of litigating any such action.


You acknowledge and agree that Thornburg may restrict, suspend or terminate these terms and conditions or your access to, and use, of the all or any part this website, including any links to third-party sites, at any time, with or without cause, including but not limited to any breach of these terms and conditions, in Thornburg's absolute discretion and without prior notice or liability.

Give Us a Call

Fund Operations

Silhouette of woman walking in front of striped illuminated wall
Markets & Economy

Observations in Equities: Recession Fears Shadow the Stocks

Ben Kirby, CFA
Co-Head of Investments and Managing Director
17 Aug 2022
5 min watch

Co-Head of Investments and Managing Director Ben Kirby reviews 2022 to-date and looks at the chance of recession and the relative value of ex-U.S. markets.

Read Transcript
Observations in Equities: Recession Fears Shadow the Stocks

I’m Ben Kirby, co-head of investments at Thornburg Investment Management. As we look back, there was nowhere to hide in the first half of 2022. Bonds were down roughly 10% and stocks down around 20% in most regions. Value stocks were down less than growth stocks this year, and dividend-paying equities have been most resilient.

Reflecting a flight to safety and rising US interest rates, the dollar strengthened by over 10% in the last 12 months and briefly touched parity with the Euro for the first time since 2002. Commodity prices surged in the first quarter, driven by the war in Ukraine, but fell in the second quarter. Energy prices remain higher than at the start of the year, but agricultural commodities and base metals weakened in the second quarter. For most Americans, their best performing asset in 2022 has been their home, up 20% in the last year.

After fretting about inflation through most of the year, markets are now oscillating between worrying about inflation or recession. Of course, it’s possible to have both high inflation and a recession, that is stagflation, but this situation is unlikely. While the debate is unsettled, increasingly the market is becoming comfortable with expectations that inflation will moderate as commodity prices have declined in the last few months, long term inflation expectations remain well anchored and falling money supply should curtail excess demand for durable goods. The question going forward, however, is whether inflation will moderate to a level the Fed is comfortable with, near its 2% target. As of now, we don’t expect inflation to slow to anywhere near that mark. Rather it’s far more likely that inflation slows to about 4-5%, leaving the Fed frustrated and inclined to tighten further.

On the other hand, as evinced by falling long duration U.S. yields, and the yield curve inverting, the market is increasingly worried about a recession.  While we would not be surprised to see the U.S. tip into recession, we think there are indications it could be a shallow slowdown and should not lead to a financial crisis. One reason for optimism is that the U.S. consumer, who accounts for the bulk of GDP, is still robust. The labor market remains incredibly tight – wages are rising, there two job openings for every one job seeker, and consumer debt ratios are 34% lower than they were in 2008. We also observe that corporate interest coverage ratios are healthy and bank leverage ratios are appropriate. In sum, we do not see the financial excess that would lead us to worry that an economic slowdown will spawn a financial crisis.

Despite rising worries about a recession, corporate earnings growth has been surprisingly robust year-to-date. We think expectations for the back half of the year are aspirational, as during the summer reporting season the tone of calls has been more bearish than usual. Moreover, global firms are dealing with dollar strength which acts as a headwind to overseas-generated revenue growth. As a rule of thumb, if GDP growth contracts by 1%, then profits should decline about 15%. We compare a potential 15% earnings contraction with a current expectation of high single digit growth, and we think stocks may be trading at higher forward earnings multiples than they should to be.

Looking outside the U.S., Chinese GDP grew by just 0.4% in the second quarter as the economy was battered by Covid lockdowns. China is critical to global growth as it remains the world’s second-largest economy. Chinese economic activity should reaccelerate in the second half of the year, but at this point, the government’s 5.5% growth target looks unattainable. We expect China to respond with several economic stimulus measures, which will serve as a growth impulse in the second half as the rest of the world slows down. Still, non-U.S. equities are at a steeper-than-normal discount to U.S. stocks. This valuation discount coupled with a historically strong U.S. dollar may portend a period of excess returns for international stocks relative to domestic.

We welcome periods asset price volatility, in which it becomes challenging to separate the signal from the noise for most investors. As fundamental investors, we focus on corporate earnings and guidance. We marry our fundamental analysis with a risk management framework that helps us to minimize unnecessary volatility and build balanced portfolios that can perform in a variety of environments. These times provide us additional opportunities to add long-term value for clients through active management. Thank you and see you next quarter.

Discover more about:

Stay Connected

Subscribe now to stay up-to-date with Thornburg’s news and insights.

More Insights

Racers at the finish line on a track
Global Equity

Forget the Magnificent 7 – Why You Should Invest in Europe’s Fantastic 5

Europe has its own crop of market-beating growth stocks that are overlooked compared to the Magnificent Seven in the US.
Choosing between an older advisor and a younger advisor.
Investor Advice

Should You Opt for an Older or Younger Financial Adviser?

Do you want the wisdom that comes with age or the innovation that comes with youth? Maybe you can have both with an advisory team.
Markets & Economy

Observations: The Value of Dividends and Munis to Stoke Income

Our Co-Heads of Investments make the case for dividend-paying stocks and the tax-free feature of Munis as tax hikes are possible, given our government debt levels.
Markets & Economy

Observations: Market Concentration and the Fed’s Policy Outlook

Our Co-Heads of Investments discuss whether the equity market rally is finally broadening and whether the Fed's forecast for three rate cuts makes sense.
Markets & Economy

Observations: Are Investors Too Complacent?

Our Co-Heads of Investments discuss whether the financial markets' substantial gains following last autumn's 'Fed pivot' left investors smug amid potential dangers.
Woman with her smart phone and plexus connection
Global Equity

Avoiding Concentration Risk in AI: Is It Time for a Reality Check?

Overexuberance for all things AI can create concentration risk. See how we’re curating diversified exposure designed to perform over the long term.

Our insights. Your inbox.

Sign up to receive timely market commentary and perspectives from our financial experts delivered to your inbox weekly.