Who We Are

What We Do

We provide investment banking, research, sales and trading, asset and wealth management, public finance, insurance, private capital, and family office services.

About Us

We are a family-owned financial services firm that values client relationships, long-term stability, and supporting the communities where we live and work.

The Stephens Story

The idea of family defines our culture, because each of us knows that our reputation is on the line as if our own name was on the door.

Leadership

Our reputation as a leading independent financial services firm is built on the stability of our longstanding and highly experienced senior executives.

Impact Initiatives

We are committed to corporate philanthropy; economic and financial literacy advocacy; and diversity, equity, and inclusion initiatives.

Our Brand Ambassadors

Stephens is proud to sponsor the PGA TOUR, LPGA Tour, and PGA TOUR Champions careers, as well as applaud the philanthropic endeavors, of our Brand Ambassadors.

Making Connections

We host many highly informative meetings each year with clients, industry decision makers, and thought leaders across the U.S. and in Europe.

Our Businesses

Capital Management

We provide fiduciary investment strategies to public-and private-sector institutional clients through asset allocation, consulting, and retirement services.

Fixed Income Sales & Trading

Decades of proven performance and experience in providing tailored fixed income trading and underwriting services to major municipal and corporate issuers.

Institutional Equities and Research

Proven industry-leading research, global market insights, and client-focused execution.

Insurance

Customized risk management, property & casualty, executive strategies and employee benefits solutions that protect our clients over the long term.

Investment Banking

We assist companies with accessing capital through innovative advisory and execution services that help firms achieve their strategic goals.

Private Capital

We have been a trusted and reliable source of capital for private companies for over 70 years.

Private Wealth Management

Our experienced Private Client Group professionals develop customized investment strategies to help clients achieve their financial goals.

Public Finance

We are a trusted municipal advisor with proven expertise in public financings. We also work with clients in negotiated and competitive municipal underwritings.

Market Trends

2022 Market and Economic Recap Valuation Reset

Jan 6, 2023

Looking back on 2022, the S&P 500 Index hit an all-time high on January 4 at 4,818.62(1). The Russian invasion of Ukraine began in February, and the Federal Reserve kicked off the first of its seven rate increases in March. Energy prices skyrocketed due to supply disruptions and production constraints, inflation hit a 40-year high in June at +9.1%(2) year-over-year (y/y), and then we had the mid-term elections in November.

The S&P 500 Index finished at 3,839.50(1), down 19.44% for the year. We saw a valuation reset, given higher interest rates, which resulted in lower valuation multiples. This reset was one of the main drivers behind the decline in the S&P 500 Index as the Price to Earnings multiple (P/E) went from 21.4x(1) at the beginning of the year to 17.6x(1) by year’s end. Meanwhile, earnings estimates for the S&P 500 Index started the year at $222.01(1) and were revised lower throughout the year to $218.46(1) by December 30 resulting in a 1.6% reduction.

2022 saw a continued rotation between value and growth as the higher valuation growth names came under pressure as interest rates rose. By the end of the year, Large Cap Growth was -29.89%(3) relative to Large Cap Value, which was - 9.69%(3), a difference of 20.2%.

Due to global supply chain issues, inflation was initially thought to be transitory but proved to be extremely persistent. Higher energy and housing costs added fuel to the already smoldering inflation fire. However, the two most recent Consumer Price Index (CPI) releases have pointed to a downward trend as we head into 2023. The prevailing thought is that some of the higher CPI prints last year are in our rearview mirror and that year-over-year inflation should continue to moderate.

As interest rates rose throughout the year, one area that became more attractive was Fixed Income. The effective yield of the ICE BofA Single A Corporate Index is now approaching 5.25%(4), which hasn’t occurred in more than 10 years. While the traditional 60/40 portfolio was impacted by higher rates in 2022, the stage is set for a more favorable Fixed Income market assuming rates don’t see a significant rise.

Source: St. Louis Fed

For 2023, there are two key things to keep in mind: 1) The consumer, and 2) The Federal Reserve. Given that personal consumption accounts for roughly 70%(2) of the Gross Domestic Product, the old saying, “as the consumer goes, so goes the economy,” could well be in full effect. With the most recent Federal Reserve
Summary of Economic Projections (SEP), it appears that we are closer to the end of the rate hiking cycle than the beginning. The most recent SEP indicates a terminal rate of 5.1%(5) vs. the current range of 4.25-4.5%(5) or roughly 75 bps of further rate increases. Will this be enough? Only time will tell.

Please reach out to your Financial Consultant with any questions you might have regarding your investments, and we wish you and your family a Happy New Year.

(1) Factset
(2) Bureau of Labor Statistics bls.gov
(3) iShares Russell 1000 Growth and Value ETF’s used as proxies
(4) FRED
(5) Federal Reserve.gov

Disclosures
  1. The foregoing has been prepared solely for informative purposes and is not a solicitation, or an offer, to buy or sell any security. Statements contained herein, while not guaranteed, are taken from sources we consider to be reliable. Past performance is no guarantee of future results. Securities products and services are offered through Stephens Inc., member NYSE and SIPC. For more information, visit www.stephens.com. © 2023 Stephens Inc. The information in the accompanying report has been prepared solely for informative purposes and is not a solicitation, or an offer, to buy, sell or hold any security or a recommendation of the services supplied by any money management organization. It does not purport to be a complete description of the securities, markets or developments referred to in the report. We believe the sources to be reliable, however, the accuracy and completeness of the information is not guaranteed. 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