September 2 was a momentous day on several fronts. It was the initial pop to all-time highs for both the S&P 500 and NASDAQ; after an impressive run from the March 23 pandemic low. It was also a turning point in terms of market leadership; reflecting budding optimism about a turn-for-the-better in economic data.
Encouraging news about COVID-19 vaccines has boosted hope for stronger economic growth, kicking off a rotation in stocks and equity sectors as investors look to a brighter future. However, near-term volatility is possible, as we’re not yet out of the coronavirus tunnel.
Key Points
A COVID-19 vaccine could start being administered globally this week.
The planned rollout is good news that has lifted the stock markets around the world. But the reality of the rollout faces risks that could extend the time frame for mass immunizations.
We expect markets to be volatile in coming months while the threat of new lockdowns weighs against the hope of recovery, although we believe we may be on the verge of a period of international stock market outperformance.
Given all the municipal bonds to choose from, how do you decide which ones should make up the core of your portfolio? With $3.7 trillion of muni debt outstanding1 spread among tens of thousands of issuers, the choice may seem daunting, but we’ll help you break it down.
With COVID-19 vaccines on the horizon, the longer-term economic outlook appears brighter.
We expect the municipal bond market to return to a sense of normalcy in 2021.
It was a bumpy ride for corporate bond investors this year. After the sharp, pandemic-driven selloff in February and March, total returns for most corporate bond investments have climbed their way back into positive territory.
Ten-year Treasury bond yields may rise as high as 1.6% in 2021, reflecting prospects for faster economic growth.
This week’s report will look at last week’s market moves in the wake of positive vaccine news (with additional and even better news today); but will also review our most recent tactical recommendation change.
Actual third-quarter earnings may be less important than what business leaders say about their expectations.
Investors looking past the presidential election for the next market-moving news break were rewarded earlier this week when Pfizer announced that it had made some headway in the fight against COVID-19.
Stock market performance during the transition period between outgoing and incoming U.S. presidents tends to be more dependent on the economic cycle than the election results.
The Fed did not add to this week’s uncertainties and kept rates unchanged, while also providing no new information with regard to its balance sheet.
Investors likely have many questions about the 2020 election. Votes were still being counted late Wednesday, but here are answers to some of the most frequently asked questions we’re hearing.
While the election remains too close to call, investor attention will soon turn back to Capitol Hill, where senators will reconvene on Nov. 9 and House members on Nov. 16 for what is known as a “lame duck” session of Congress.
There are many major policy decisions that will influence the outlook—trade, energy, taxes and budget deficits, and pandemic relief. However, it’s difficult to assess how these issues will be addressed post-election, and even more unpredictable how the market will react.
For the third time since the COVID bear ended its short havoc, U.S. stocks went into pullback mode—culminating in the worst week since March. The virus itself continues to be a culprit; with another surge in cases and hospitalizations; although not for deaths, at least not yet. The lack of a fiscal relief package and heightened election uncertainty are also to blame.
Stocks tumbled again on Wednesday, as worries about rising COVID-19 cases and hospitalizations sent investors toward the safe havens of U.S. Treasuries and the dollar.
The “end of globalization” is a phrase that has come up a lot lately. Stories written about deglobalization have soared this year with the pandemic.
Investor sentiment is telling a mixed story about the market’s ascent since the March low; begging the question, will the skeptics converge with the optimists?
Given current low yields, some investors wonder whether bonds can continue to provide diversification in a portfolio. Here’s why those fears may be overblown.
The potential economic and market impacts a “Blue Wave” for the U.S. election could have on five key areas: taxes, labor, the environment, oil and trade.
The transportation sector in the municipal bond market faces significant headwinds as a result of the COVID-19 pandemic.
High-yield bonds can generally offer more income in a very low-interest-rate world. However, if the economic or stock market outlook deteriorates, it could be a bumpy ride.
With investors already on edge regarding election uncertainty, an “October surprise” arrives yet again. Can history provide some guidance on how elections impact markets?
The biggest political risk facing investors may be the potential for politicians to implement national lockdowns in response to a rise in new COVID-19 cases that could lead to renewed recession and a new bear market for stocks.
When a stock index falls by more than 10%, it is often said to have entered “correction” territory. That’s a fairly neutral term for what feels like a nerve-wracking drop to many investors. What does a correction mean? What’s likely to happen after a correction, and what can you do to help your portfolio weather the downturn?
As of this writing, it’s a rough start to the week for U.S. equities. Major indices attempted to find more stable ground last week, but volatility risks persist and the bears are winning the latest round. Policy risks abound—not just election-related, but both monetary and fiscal policy as well.
Fed maintained rates at near-zero, while also updating its summary of economic projections; now expecting a shallower economic contraction, but a slower recovery thereafter.
Markets have been walking a fine line, with a still-struggling economy on one side and hopes for a COVID-19 vaccine breakthrough on the other. Heading into the fourth quarter, there are both encouraging signs and cause for caution.
The risk of a “no deal” Brexit and the potential economic harm that accompanies it increased last week.
The U.S. stock market hit pause in early September, as investors took a harder look at market overconcentration and frothy sentiment. Meanwhile, global economies may be entering a new phase, and the Federal Reserve’s newly announced inflation policy is likely to keep U.S. rates lower for longer.
The Federal Reserve has changed its inflation policy. Here’s what it may mean for markets.
Rotation away from the market’s prior momentum darlings continues. Friday’s jobs report had bullets for both the optimists’ and pessimists’ case studies. And improving productivity, partly due to work-from-home trends, could persist as a positive economic driver.
Major tech-focused shares fell after helping drive the fastest stock market recovery in history.
Prior to Hurricane Laura making landfall in Louisiana and the wildfires in California and parts of the West igniting, the U.S. had already experienced 10 different billion-dollar natural disasters this year.
Bond investors face a challenging environment. The federal funds rate is back near zero, the 10-year Treasury yield remains stuck in a 0.5%-to-0.75% range, and inflation-adjusted (real) yields are deep in negative territory.
The recent imbalances in the stock market can lead to vulnerability; rebalancing portfolios may be valuable to help balance exposure to U.S. capitalization-weighted benchmarks relative to international stocks.
The move away from a precise 2% target likely means short-term rates will stay lower for longer.
In a speedy round-trip, the S&P 500 hit an all-time high last week; meaning the rally since March is now an “official” bull market.
Treasury bond yields have been drifting quietly lower since early June. But there is more going on beneath the surface than it might seem at first glance. Real yields—nominal yields less inflation—have declined steeply into negative territory. While nominal yields are near record-low levels from the deep economic decline, inflation expectations are picking up.
Confidence matters; faith in a brighter future drives risk taking, fueling growth through investment and consumption.
Although certain high-frequency data haven’t improved markedly, the threat of the virus has started to recede.
The July labor market report had talking points for both the economic bulls and bears; with Congress on the hot seat to keep the recovery from faltering.
Treasury Inflation-Protected Securities can help protect your portfolio against rising inflation, but there are nuances you should understand.
There’s a small portion of the bond market that investors may have overlooked in the past, but should now consider—the taxable municipal bond market.
Let’s take a look at how recent developments may have impacted long-term returns for stock market investors.
The U.S. dollar has fallen by about 7% against a broad basket of currencies since its mid-March peak. After a nearly decade-long bull market that saw it appreciate by more than 40%, we believe the dollar could be headed for a longer-term decline.
The Fed left rates unchanged near-zero, as expected, while emphasizing that “the path of the economy will depend significantly on the course of the virus.”
