The Federal Open Market Committee is widely expected to raise the federal funds target rate on Wednesday (to 1.50-1.75%). For investors, the key question is the pace of tightening that will follow.
Passive equity strategies have seen massive inflows over the last decade, in part owing to active management’s struggles. But a closer look at the story within the story suggests that leaving active out of the equation could be leaving money on the table.
Nonfarm payrolls rose by 313,000 in the initial estimate for February, with a net revision of +54,000 to December and January. The unemployment rate held steady at 4.1%, despite a rise in labor force participation.
Tariffs on imported steel and aluminum are unlikely to have a major direct impact on U.S. economic growth. However, President Trump’s decision last week has significantly raised the risk level for the U.S. and global economy.
We’ve developed a new way to measure a company’s ESG (environmental, social and governance) score. Our research suggests that these material ESG scores can potentially provide more insight than traditional ESG scores.
We view the events of late January and early February as healthy – the final “death spasm” of market reliance on central bank policy, and a return to more normalized market conditions – volatility returns, earnings and fundamentals matter, and a reminder that stocks can go down sometimes as well as always up.
The House Financial Services Committee has shifted Fed Chair Powell’s monetary policy testimony to Tuesday, February 27.
Recent stock market volatility was partly blamed on fear that inflation will soon “take off.” Simple supply and demand arguments would suggest that pressure on resource markets (labor mostly, but also raw materials) would lead inflation higher.
Global equity markets are still hurting from last week’s sell-off. Yet the renewed volatility could mark a return to reality after an unusually long period of steady gains and may even foster a healthier investing environment over time.
PIMCO takes a long-term view of markets and economies, one that anchors investment decisions during shorter-term periods of market volatility. Nonetheless, the dramatic return of market volatility has understandably unnerved many investors.