While politics garner headlines, fundamentals drive the market over the long term.
The 2024 wild ride has proven to be a continuation of last year’s.
As we look through our financial lens and reflect upon everything that has transpired in 2024, we have compiled a list of the top ten economic and market-oriented things that we are most grateful for this year.
There has been a lot of talk about (in)efficiencies in government spending, both before and since the election. Much of the conversation has been driven by Elon Musk, who will co-head the Department of Government Efficiency (DOGE, not an actual government agency). Musk has boasted he could find $2 trillion to cut from the federal budget.
The Treasury yield curve has shifted appreciably all year long. In particular, the last few months have realized substantial rate changes. The shift in the Treasury curve is not isolated. The corporate curve is also changing.
Wait, what? The Fed cut interest rates and bond yields went up, not down. Yes, you read that right.
The Federal Reserve (Fed) Chairman seems to be happy with the market’s new wisdom regarding the path of interest rates going forward.
Your fixed income strategy does not necessarily need to be adjusted based on every personnel or environmental change.
With the outcome of the election now known, we will continue to assess how policy changes impact our broader view.
The yield on the 10-year Treasury surged to about 4.4% just after the election, even though it has come back down close to pre-election levels recently.
Explore how these two investment types compare.
Volatility is likely here to stay until we get some level of clarity on the political landscape.
Better than expected economic data drove interest rates higher, changing the market narrative and contributing to an equity market pullback early in the month. This unraveled expectations of further rate cuts by the Federal Reserve (Fed) and resulted in real rates moving higher. The 10-year Treasury has moved up 48 basis points, ending the month at 4.27%.
As you know, economists are normally criticized and accused of being ‘two-handed.’ This is because when we talk, we typically say, “on the one hand, and on the other hand.” Many argue that we are hedging our bets and lack the spine to take a position. While we disagree with that simplistic view of our job, we can understand why we are accused of being ‘two-handed.’
Get ready to ‘roll back’ the clocks! That’s right, Daylight Savings Time (DST) ends this weekend. This twice-a-year ritual is followed by every US state (except Arizona and Hawaii) and nearly 70 countries across the globe, but not everyone supports it.
Yields have risen from the dead since their recent lows in mid-September presenting investors with an opportunity that many were scared had disappeared following the FOMC’s 50 basis point rate cut at their last meeting.
The long and winding road to one of the most unusual presidential elections in history is coming to an end – with Election Day now just 11 days away.
Talking and exchanging communication with advisors and clients over the last several years has shown that many of them are concerned about the fiscal path of this country and the consequences it is having on our debt.
Senior Investment Strategist Tracey Manzi notes that while the predictive power of the inverted yield curve has waned this cycle, investors shouldn't dismiss the warning signs entirely.
The FOMC lowered the Fed Funds rate by 50 basis points at their September meeting. This was the first cut in over four years and the start of what is expected to be a multi-year easing cycle.
From current data, it is clear there are no signs the U.S. economy is currently facing challenges.
The S&P 500 is on track to deliver its second consecutive year of 20+% returns – a milestone it has not achieved since 1998. It is also on pace to deliver its strongest performance leading into an election year since 1932.
While tariffs have been utilized heavily in the past, both their usage and rates have fallen considerably over the past half century as countries have engaged in different stages of trade negotiations.
A tariff is a tax assessed on imports. Historically, tariffs have been enacted to generate tax revenue or to protect domestic producers from competition in the form of cheaper foreign goods. In essence, tariffs artificially make domestically produced goods more competitive in the local market by making imports more expensive.
Since hitting the October 12, 2022, low, the S&P 500 has climbed 65.9%! By historical standards, there is still plenty of room for the current bull market to run
The disruptive effects of the pandemic are still reverberating across the economy and giving incorrect signs, in this case, of the U.S. labor market.
We have openly promoted increasing duration over the last several months. An increase may seem like an odd “wish” as it implies taking on greater price risk.
A series of unprecedented and historic events has completely shifted the candidates and dynamics of the race for the presidency and Congress.
Just like road trips can bring unexpected detours, the economy and financial markets are at their own crossroads: recession or soft landing?
The recent fears regarding the state of the U.S. employment sector seemed to have disappeared completely this morning as markets are ‘recalibrating’ their view on the U.S. economy going forward.
As we look at today’s economy and financial markets, we are at a crossroads: Will it be a long straight highway to a soft landing, or will it be a bumpy road to recession?
September is typically the weakest month of the year for stocks, but thanks to the much-anticipated federal funds rate cut, the S&P 500 turned in its first positive performance in a September since 2019
For many investors, the fixed income portion of their portfolio is intended to be the ballast of the portfolio.
The economy reached an inflection point, with labor market conditions squarely in focus.
After the first rate cut in two years went according to market expectations as the Fed reduced the federal funds rate by 50 bps, markets have continued to run with the Fed’s ball and seem to have a ‘sugar rush.'
Explore fixed-income tools that generate income and infrastructure.
Fixed income strategy and opportunities have remained relatively unchanged over the past few months. However, the much-talked-about monetary policy change has commenced.
The seasons are changing. This weekend marks the autumn equinox—a time of year when the days get shorter, the weather gets cooler, and the leaves start to turn (at least for our friends in the north). While our calendars will show that fall has officially arrived, it may not feel like it as much of the nation will be enjoying unseasonably warm weather.
After more than six months of indicating that it lacked conviction regarding the path of inflation, the Federal Reserve (Fed) seems to have gotten a conviction boost so large that it pushed it to lower the federal funds rate by 50 basis points at the September Federal Open Market Committee (FOMC) meeting.
More than two years after first taking steps to contain swelling inflation, the Federal Reserve (the Fed) has taken a step back, suggesting monetary policy decision-makers have confidence that inflation will continue to move closer to the Fed’s target, allowing them to turn some attention to economic growth.
The half-percentage point reduction at the September 17-18 FOMC meeting represents the largest non-COVID era cut by the Fed since 2008.
Doug Drabik discusses fixed income market conditions and offers insight for bond investors.
The Federal Reserve (Fed), and markets, overreacted to the slightly higher inflation seen during the first quarter of the year. After that scare, the Fed went from expecting three cuts in the federal funds rate in 2024 to just one cut during its June dot plot release.
The time has come! After the most aggressive tightening cycle in modern history, the Fed is ready to turn the page and begin dialing back its policy restraint after the second longest ‘on hold’ period (14 months) in history. Barring any surprises, the Fed should lower interest rates at its meeting next week—the first rate cut in over four years—in the hopes of preserving a soft landing for the economy.
Fed officials must recalibrate their policy stance to ensure the economy stays on solid footing to achieve that elusive soft landing they have been aiming for after their quest to quash inflation.
Investors may find themselves prognosticating about future rates relative to current rates in an attempt to optimize their portfolio.
August’s employment report, which was weaker than markets were expecting but stronger than our call, cements our view that the easing cycle will begin during the next FOMC meeting, September 17-18.
When we’re viewing markets, it’s not surprising sentiment shifts quickly if we don’t instantly see the anticipated results. Market pundits quickly point fingers and determine the Fed, economists, and participants are wrong. Reactions can be powerful in number and sway momentum for stocks and/or bonds.
A soft landing for the U.S. economy still appears to be the most likely outcome.
Happy National Cheap Flight Day! Yes, you heard that right—there is a national celebration day to mark the start of a lull in travel demand. Who knew this would be a day to celebrate? Regardless, it’s good news for consumers as airfares should continue their recent downward trend!
