The Northern Trust Economics team addresses a variety of questions heard most often from our audiences.

Investor sentiment on emerging markets has swung negative in recent weeks on concerns over tariffs, trade, global growth and a resurgent U.S. dollar. However, we believe the long-term case for emerging markets (EM) in bond portfolios is still strong -- especially if you know where to look.

This morning's employment report for June showed a 213K increase in total nonfarm payrolls, which was better than forecasts. The unemployment rate increased to 4.0%. The Investing.com consensus was for 200K new jobs and the unemployment rate to remain at 3.8%.

The Northern Trust Economics team shares its outlook for growth, employment, inflation, and interest rates in the U.S., U.K., E.U., Japan and China.

"Travel on all roads and streets changed by -0.2% (-0.5 billion vehicle miles) for April 2018 as compared with April 2017. Travel for the month is estimated to be 272.4 billion vehicle miles." The 12-month moving average was down 0.02% month-over-month and up 0.8% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) is down 0.09% month-over-month and down 0.2% year-over-year.

The days are long and people’s thoughts naturally move to the mountains, lakes, and beaches. But these coming summer days may not be so “dog-like” as we normally anticipate.

Quarterly commentary giving an overview of the markets and the importance of having and implementing a strategy when investing in the markets.

Uncle Sam has made too many promises to too many people, with little regard for its future ability to fulfill them. These are debt. Worse, some of them are additional debt on top of the obligations we already see on the national balance sheet. Even worse, entire generations have planned their retirement lives around the government fulfilling those promises. If those promises aren’t met, their lifestyles will indeed become a potential train wreck.

Even when extreme “overvalued, overbought, overbullish” warning signs are present, we now require explicit deterioration in market internals before adopting a negative market outlook. That, however, is far different than saying that extreme conditions can be ignored altogether. With market internals negative here, underlying market risks may be expressed abruptly, and with unexpected severity.

The accompanying chart is a way to visualize real GDP change since 2007. It uses a stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself. Here is the latest overview from the Bureau of Labor Statistics.

The aging financial advisor population is driving the need for succession planning. For most advisors, this is the most important financial decision they will make. It comes with a myriad of questions. What are the benefits of selling to a third party versus a junior advisor? How do you get the timing right?

With the economy in the later stages of its post-crisis recovery, we believe investors should be cautious and selective on corporate credit. Within the high yield sector, this caution may warrant a move up in quality toward the higher end of the spectrum: BB rated bonds.

2017 was a great year for the economy and financial markets, and we started 2018 with high hopes for even faster growth and continued market gains. But between the stock market pullback early in the year; the slowdown in economic growth; and the rising political risks in Asia, with North Korea, and in Europe, with Britain and Italy, expectations softened. Perhaps 2017 was the end of the cycle after all.

The economic calendar is loaded. The many reports include several of the most-watched. The data may even generate enough fresh news to break the summer slumber. There is plenty of skepticism about the most recent economic data.

FINRA has released new data for margin debt, now available through May. The latest debt level is up 2.6% month-over-month. The May data gives us an additional sense of recent investor behavior.

Danton G. Goei joined Davis Advisors in 1998. He is a portfolio manager for the Davis Large Cap, Global, and International Portfolios and a member of the research team for other portfolios. In this interview, he discusses those funds and why Davis maintains a “wall of mistakes” that immortalizes its investment blunders.

A recent US court ruling green-lighting the merger between AT&T and Time Warner marked an historic event that some say could open the door to more merger-and-acquisition (M&A) activity ahead. Sara Araghi, CFA, vice president, research analyst, Franklin Equity Group, and Marc Kremer, CFA, research analyst, Franklin Templeton Fixed Income Group, discuss some of the possible implications.

China is in focus this week as the economics team considers the country’s trade practices and defaults in its bond market.

Private equity funds continue to attract interest, despite rising deal valuations and high levels of leverage. We think there’s a way to get many of the benefits of private equity in public markets—without forfeiting liquidity.

Here is my “5M” approach that deepens client relationships, stimulates new referrals and attracts new prospects during volatile markets.

Our national debt has swelled to a record $21.16 trillion as of this writing. That includes debt held by the public ($15.4 trillion) and intra-governmental debt ($5.7 trillion). At $21+ trillion, our national debt is well above 100% of our Gross Domestic Product of $19.97 trillion.

I spend a lot of time on the road speaking to our investors and advisors and one of the common questions I get during the Q&A sessions is, “What keeps you up at night?” Aside from having an 18-year old daughter—and being a chronic insomniac anyway—my reply usually centers around debt and the burden it has and will continue to place on our economy.

This memo covers three ways in which securities markets seem to be moving toward reducing the role of people: (a) index investing and other forms of passive investing, (b) quantitative and algorithmic investing, and © artificial intelligence and machine learning.

Steps financial advisors can take to build deeper trust with clients as change occurs within the financial advice industry.

Every quarter we ask bond and currency managers to consider valuations, expectations and outlooks for the coming months. Today, we’ve put the spotlight on U.S. rates and inflation expectations, credit markets and casualties from rising U.S. interest rates.

One of the potential rude awakenings that we advised investors to prepare for in our recent Secular Outlook is a surprising surge of productivity growth over the next several years.

We believe the math of common stock investing is pretty simple. When you buy a stock without leverage, you can only lose your original investment. Your gains can be unlimited over the longest term (long duration). Most of the benefit (90%) of diversification is reached by owning a twelve-to-eighteen stock portfolio...

Debt is a perennial worry, but much what you hear about debt in the US is hyperbole. Here are the facts. Household debt has fallen in the aftermath of the Great Recession and debt relative to net worth is as low now as in 1985. Corporate leverage today is not materially different than it was in 1993 or 2003, i.e., early in two expansion cycles.

The economic calendar is loaded and there is plenty of non-economic news as well. The punditry will focus on the Trump-Kim summit at the start of the week and then turn to inflation data and the Fed. Who knows what the first might bring, but the market is unlikely to be surprised by the Fed.

For this post, I’d like to offer a few “Disintegrated Thoughts” on some things I’ve been thinking about in the investment markets. These include: The ECB and volatility deleveraging, Business building and ignoring valuations, Sticking up for “speculation” and Notes from the judo mat.