Housing stress may spread to other sectors.
Despite media headlines, podcasts, and broadcasts suggesting “doom and gloom” lurks around the corner, investor bullishness has increased markedly since the October lows. This isn’t the first time we have discussed investor sentiment, which is often wrong at the extremes.
Thanks to the recent banking crisis, the Fed’s “dual mandate” has taken on a new meaning. The increased economic uncertainty during the first quarter drove investors towards safer assets, boosting investment grade bonds.
There are many reasons to buy and hold physical gold. The lack of counterparty risk, the diversification, and the hedge against inflation are among the top reasons to own the monetary metals.
We are at the start of the period when companies release their results for the first quarter of 2023, known as earnings season. With everything going on—inflation, rate hikes, a labor shortage, the weakness of the dollar, a pending recession, the list goes on and on...
GMO has published a new 7-Year Asset Class Forecast.
At the end of 2021, the Dow Jones Industrial Average closed at 36,338, and the career scoring total of LeBron James stood about 60 points lower…
Our emerging market debt valuation metrics across all but the U.S. interest rate dimension remain unambiguously attractive. In this new, compact version of our Quarterly Valuation Update, we provide our Q1 assessment and introduce summary valuation graphics to assist in quantifying expected returns.
Technology enhancements have increased the speed of panic.
In his latest memo, Howard Marks discusses the significance of the Silicon Valley Bank collapse. He argues that it likely doesn’t portend a wave of banking failures but may amplify preexisting wariness among investors and lenders, leading to further credit tightening and additional pain across a range of industries and sectors.
To kick off the beginning of 2023, there continues to be a bias we see in equity investor portfolios. These portfolios have many of the traits investors see at the endpoints of the economy like software, consumer products and computer chips.
The US economy is being tugged in two different directions right now. On the positive side we have the lingering effects of the massive stimulus of 2020-21, the renormalization of the service sector after COVID Lockdowns, and, as always, the entrepreneurial and innovative spirit of the American people.
For years, investors seeking tax-efficient income grappled with a key question: Are municipal bonds that are subject to the alternative minimum tax (AMT) worth their higher yields? After all, an attractive bond yield didn’t hold as much luster once the AMT shaved off up to 28%.
Markets have been very positive this week on better-than-expected inflation numbers. The Consumer Price Index (CPI) printed a better than expected 0.1% in March with the year-over-year rate declining to 5.0% compared to a 6.0% year-over-year rate reported in February of this year.
Recession odds have climbed considerably since Jerome Powell’s testimony before Congress and the latest FOMC meeting. However, the recent failures of Silicon Valley Bank (SVB) and Credit Suisse (CS), as higher rates impact regional bank liquidity, also added to the risks.
The dollar's strengths still outweigh its weaknesses.
Spotting trend changes is the key to economic forecasting. They don’t happen often. Most of the time, this year will be similar to last year. The pace varies but the overall trend continues… until it doesn’t.
It’s believed that to meet this goal, two out of every three passenger vehicles manufactured in the U.S. would need to be electric models.
What does a potential change in Federal Reserve policy mean for markets and the economy?
This much is clear from Tesla Inc.’s fifth price cut this year: Elon Musk is dead set on seizing much more of America’s SUV market.
Yesterday’s CPI report showed that inflation continues to slow to 5% on an annualized basis. That is a lot better than it was last year. We should be happy about this.
Just as it is getting ever-more important to anticipate changes in Fed policy, those changes are becoming more uncertain. One way to help resolve this dilemma is by explicitly incorporating political and public policy goals into the monetary policy calculus.
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates and inflation.
2023 has already been an eventful year, featuring a banking crisis and more Fed rate hikes. In our view, this is not a “set it and forget it” type of market – investors need to stay vigilant.
After the market selloff in 2022—a period that was particularly hard on growth stocks—we think our companies are attractively priced for the next five years, which is our baseline investment horizon.
Despite recent headwinds, structural drivers underpinning China’s growth remain intact. Sectors that will benefit from the structural trends include healthcare, industrial automation, and domestic brands targeting increased spending by Chinese consumers.
The Fed’s concern about U.S. banks dominated last month’s FOMC meeting. According to today’s release of the March 21-22 meeting minutes, the Fed was apparently so concerned over banking problems and the potential for an ensuing credit crunch that officials tempered calls for rate hikes...
Given market uncertainty and the risk of a US recession, is now the time for defensive stocks? Making a case for low-volatility, high-dividend equities with Franklin Templeton Investment Solutions’ Vaneet Chadha and Michael LaBella.
The lack of diversification benefits of government bonds in 2022 was painful for multi-asset investors. The sell-off in US Treasuries in particular was sharp, and we saw correlations versus stocks move well into positive territory.
March inflation data may put the Federal Reserve close to its terminal policy rate this cycle, if it hasn’t already reached it.
The stakes are high, and it appears likely that our deeply divided government is headed for another debt-ceiling showdown. Divided governments have typically been good for the markets; however, they often spell trouble when it comes to negotiating fiscal matters.
Although central banks may be near the end of the rate hike cycle, short-duration stocks may still be an attractive investment theme should interest rates remain at higher levels.
The Federal Reserve Board reduced banking reserve requirements to zero in March 2020. So banks in the United States are technically not required to back customers' deposits with anything.
During his spring break, Johnson Financial Group Portfolio Manager Brian Schaefer had the time to read “A Gentleman in Moscow,” which got him thinking about the how the current market moves could impact the American experiment. In this investment commentary, Schaefer discusses the MOVE and VIX indexes and what they might say about the markets.
Tax-managed investing has gained in popularity in recent years. But what exactly is a tax-managed mutual fund? We do a deep dive into the concept.
Born of the Global Financial Crisis, additional tier-1 securities were designed to absorb bank losses in times of turbulence and maintain financial safety at no cost to taxpayers. Despite good intentions, we’ve found AT1s to be flawed instruments that are contingently junior to common equity in practice.
What must happen to make these stocks attractive to investors like us?
I have been getting a lot of questions around the dollar in recent weeks. De-dollarization seems to be a thing, as do central bank digital currencies, along with the latest round of worries about what the government is going to do to our savings.
Why finding ways to break the tie to these variables is so important, and outline a few ideas for how to do it.
Trading might be muted today as the market pivots, awaiting earnings and inflation data this week.
Doug Drabik discusses fixed income market conditions and offers insight for bond investors.
We think dividend-income strategies can be effective across multiple environments, provided that they’re designed to tap into a wider opportunity set beyond traditional dividend payers alone.
As central banks wrestle with how to respond to volatile economic data and banking turmoil, while also fighting inflation, Franklin Templeton’s economists provided their perspectives on what’s next for economic growth, interest rates, inflation and fixed income markets.
Lost in the Good Friday holiday and the jobs report was the weekly report on bank lending, deposits and securities holdings. Keeping in mind this data is always a week old, it shows the retreat from banks continues.
History is full of economic and societal collapses. The Incan and Roman societies disappeared, the Ottoman Empire fell apart, the United Kingdom saw the pound lose its reserve currency status. So, anyone who says the US, and the dollar, couldn’t face the same fate doesn’t pay attention to history.
The market bottomed last October despite ongoing concerns about inflation, higher rates, recessionary risks, and a banking crisis. While the media headlines and youtube podcasts are filled with “crisis” headlines, as noted in “Analysts Raise Estimates,” expectations for growth and earnings are rising.
The case for a central bank digital currency has many shortcomings.
Central banks accumulated gold at the fastest pace on record in the first two months of 2023. In January and February, central banks collectively bought a net 125 tonnes of the metal, the highest amount for the year-to-date period since banks became net buyers in 2010.
Volatility can be challenging but it also creates opportunities. In our view, rotating across sectors within the investment grade market is the most effective way to take advantage of price fluctuations and generate alpha.
