Investors are cautioned not to extrapolate 2017’s performance into 2018, and we expect more frequent bouts of volatility. The global bull market is intact, supported by solid global growth and strong corporate earnings. But with the expectations bar now set quite high heading into next year, pullbacks are increasingly possible. Discipline is important looking ahead.
Economic growth continues, and although this cycle has been the slowest recovery in post-war history, the slower growth has allowed for a prolonged cycle. Inflation remains low—since peaking in 1980, the U.S. has experienced consistent disinflation.
On December 2, Senate Republicans managed to obtain enough votes to pass sweeping US tax reform legislation, but with several changes compared with the original House of Representatives' bill. At more than 470 pages, the "Tax Cuts and Jobs Act" is certainly not a light read. But, it has some important implications for individuals and corporations, for better or worse in some cases.
Easy monetary policies during the post-crisis period have propelled equity prices higher and driven bond yields lower. But as central banks reverse their quantitative easing (QE) and raise rates, this “Goldilocks era” will come to an end, according to Jeffrey Gundlach.
The Federal Reserve has a problem. At 4.1%, the jobless rate is already well below the 4.6% it thinks unemployment would/could/should average over the long run. We think the unemployment rate should get to 3.5% by the end of 2019 and wouldn't be shocked if it got that low in 2018, either.
US tax reform looks to impact many areas of our lives, and one of these could be the way Americans save and invest for retirement. As we wait for Congress to refine and vote on the latest tax proposals, Drew Carrington, head of Institutional Defined Contribution at Franklin Templeton Investments, breaks down how lawmakers might target retirement dollars for tax revenue.
The business cycle is one of the most important drivers of investment performance. As the nearby chart shows, recessions lead to outsized moves across asset markets. It is therefore critical for investors to have a well-informed view on the business cycle so portfolio allocations can be adjusted accordingly.
The global economy will confront serious challenges in the months and years ahead, and looming in the background is a mountain of debt that makes markets nervous – and that thus increases the system's vulnerability to destabilizing shocks. Yet the baseline scenario seems to be one of continuity, with no obvious convulsions on the horizon.
Technology is transforming nearly every industry, from healthcare to retail to transportation. Franklin Templeton Investments recently hosted an event examining the race to develop and market autonomous vehicles entitled, “Along for the Ride: Evaluating the Impacts of Self-Driving Cars.”
Now that Black Friday has come and gone and Cyber Monday is upon us, you're going to hear a blizzard of numbers and reports about the US consumer. So far, these numbers show blowout on-line sales and a mild decline in foot traffic at brick-and-mortar stores.