Short-term bonds could rise in price and potentially maintain a high degree of liquidity in response to Federal Reserve rate cuts.
Patrick Nolan offers his top tips to help your money deliver.
In a nutshell, we concluded that the global economy is about to enter a low-growth “window of weakness,” which we expect to persist going into 2020 with heightened uncertainty about whether it is a window to recovery or recession.
In our mid-quarter update, we highlighted the plunge in the University of Michigan’s consumer confidence indicator, suggesting that “good feelings” among consumers were starting to fade. Often surveys offer a leading glimpse into economic activity. A more confident consumer is more likely to make those big-ticket purchases, like homes and cars, as well as consuming more services.
Interest rates rose last week, but the surge did not keep stocks from climbing. Russ explains why.
On September 16, banks were unwilling or unable to lend on a collateralized basis in the repo market, even with the promise of large risk-free profits. This behavior pointed to the end of the market stimulus that has been around for the past decade.
What sources of market returns can withstand late-cycle uncertainty? By identifying the right ingredients, we think investors can create an allocation with the potential to overcome new challenges and perform well over the long term.
Given the backdrop of a slowing global economy and shaky investor sentiment tied to trade tensions, Franklin Templeton Multi-Asset Solutions’ Ed Perks and Gene Podkaminer are calling for an active investment approach.
We believe a disciplined approach to bond investing is critical to achieving desired return and risk objectives. Model portfolios may help.
Want to reduce overall portfolio risk without giving up on income? Consider high-yield bonds.
Never underestimate the ability of politicians to mess up a good thing. They're certainly trying in Washington, D.C.
I'm going to lay out the bull and the bear case. You can decide which is more compelling.
Opportunistic investors are taking advantage of the disconnect between solid fundamentals and currently low valuations.
Emotions run rampant before the uncertainty of floating, fluctuating, often violent and volatile markets. Constantly discounting prices are fickle and full of surprises. Disorder is usually the norm.
New research on the low-risk anomaly – the fact that less risky stocks have had higher risk-adjusted returns – reveals exactly which types of stocks are likely to perform poorly over time, especially in a bear market. If the funds and ETFs you own lack construction rules to screen out those stocks, you will be exposed to unnecessary risks.
Climate change is a risk for the global economy.
“I think gold is in a good place,” Pierre Lassonde, co-founder of Franco-Nevada, said this week at the Denver Gold Forum. Looking ahead 30 years, Pierre believes the yellow metal could average $12,500 an ounce—and may even hit $25,000!
Elga explains why we could see lower growth and higher inflation ahead in the U.S. Hint: trade tensions.
Weakness in the U.S. economy leaves it vulnerable to shocks. We think the Fed will respond with additional easing this year.
In line with expectations, the FOMC cut rates by 25 basis points; also lowering the IOER by 30 basis points to address liquidity problems in the repo market.
The US Federal Reserve cut its benchmark short-term interest rate for the second time this year, but some observers were disappointed the Fed didn’t more strongly signal future easing moves.
Markets can prove interesting when the price of liquidity abruptly increases and high yield is no longer the highest-yielding investment.
Losing interest in bank loans now that rates have begun to fall? It’s a common gut reaction for those who have a narrow view of loans as a tactical play on interest rates. However, loans have other virtues worth considering in the current environment. Here are two factors that might have you rethinking your instinct to swipe left.
The yield on the benchmark 10-year Treasury security was 1.42% on September 3, and it won’t go any lower this year, according to Jeffrey Gundlach. He said he would “absolutely not” buy 10-year bonds.
In today’s highly uncertain market environment, investors in US stocks are paying a premium for companies with high-dividend yields. But how much is too much—especially if interest rates stop declining? Stocks with resilient high-growth profiles deserve a closer look.
Gold may be off its 52-week highs, but the precious metal is still up more than 15 percent for the year through September 17. This appears to put gold on a path for its best year since 2010, when it gained just under 30 percent.
The Federal Open Market Committee will meet this week to set monetary policy. It’s widely expected that the FOMC will lower the federal funds target range by another 25 basis points, although that’s not a done deal.
With global markets growing more volatile, we’re often asked what we think are the most underappreciated risks that investors face today. One in particular stands out: currency risk—especially for non-US dollar–based investors.
Fintech can bring tremendous benefits to emerging markets but mimicking China’s success in the space might be unwise.
The conventional approaches to limiting downside losses, such as put options, portfolio insurance or market timing, are either too costly or cumbersome to implement. We propose a “black swan” strategy that combines Treasury securities with equity call options in a barbell fashion.
In this interview, Jeffrey Germain and Matthew Johnson of Brandes Investment Management explain why U.S. investors suffer from a “home country bias” and discuss the compelling opportunities outside the U.S.
With interest rates on the 10-year US treasury bond having moved nearly 50bps higher over the last 10 days it is certainly worth asking the question if we’ve seen the low in interest rates or whether this is more of a correction in an ongoing downtrend in rates.
Stocks have climbed higher but we don’t recommend attempting to trade around short-term moves; rather, investors should remain disciplined and diversified, and use any volatility to rebalance as needed. The consumer continues to drive the economy, while weakness is mostly still concentrated in manufacturing. Yet, the potential for volatility remains, as a comprehensive trade deal is not in sight, tariffs on consumer goods are still set to kick in on December 15, and monetary policy’s ability to spur growth and inflation may be waning. We continue to favor large caps over small caps and are neutral to U.S. and global equities.
Fed is set to ease, ECB eases and mortgage refinancing takes off.
At the economic event horizon, we all need to become black hole investors. Relying on past performance as the tectonic plates shift underneath us, as the central bank black holes begin to suck historical performance into their maws, we must look forward rather than backwards to design our portfolios.
Trade fears, social unrest in Hong Kong and Brexit uncertainties weighed on markets in August. Franklin Templeton Emerging Markets Equity expects continued volatility, but an interest-rate cut from the US central bank in September could help stabilize emerging market currencies.
Why listed infrastructure? Let’s follow the logic chain: Equity-market volatility, low fixed-income yields and increased economic uncertainty all stand as potential stumbling blocks that threaten to derail even the best-laid of plans.
Invesco Fixed Income remains cautious on risk until the dynamic between growth and monetary policy is resolved.
Russ describes the reasons why growth stocks can still outperform value.
Indian PM Modi’s latest surprising policy move was the sudden announcement that the northern state of Jammu and Kashmir would no longer have the special autonomy it has enjoyed since India’s independence.
The Northern Trust Economics team shares its outlook for U.S. economic growth, inflation, unemployment and interest rates.
Interest rates are falling and with that comes a series of problems investors must confront. There are the obvious implications, like lower returns from bonds. But the more pernicious harm will come from thee failure to properly adapt financial plans to current market conditions.
In our experience, family-owned private firms and small-to-medium sized public companies are most likely to borrow responsibly and prioritize bondholders ahead of other investors.
Value investing is poised to dominate growth investing based on a historical comparison of valuation metrics. The gulf between the P/E ratios of value growth and growth stocks has never been this wide.
In this interview, the retired FPA managing partner and portfolio manager expresses his criticism of monetary policies, and how investors should position their portfolios in response.
A dollar in secular decline may be the final piece in the puzzle that shows the insanity of our current fiscal and monetary policy. The U.S. bubble economy rests on the foundation of the dollar's status as the reserve currency. If that status is lost, the entire house of cards may just come crashing down.
For fiscal year 2020, the federal budget deficit is expected to hit a massive $1 trillion—the first time in U.S. history that it will have expanded so rapidly in a time of peace and economic stability.
Ray says our current situation is essentially the reciprocal of the 1970s inflationary blow-off. The last historical parallel to what we now face was the 1930s. Both those analogues, while not perfect, carry valuable lessons we should consider.
