Tax-free muni bonds saw $8.8 billion in inflows in the first quarter, beating U.S. equity funds and international equity funds. Investors were seeking stability as well as a strategy to counteract the changes to the tax code.
Investors in commercial real estate should make sure their managers are being just as strategic when they finance investments as they are when they choose them. In this article, the CIO for one CRE manager talks about how the firm gives its finance team a seat at the table on deals and uses the full array of financial tools to diversify its portfolio and optimize its liability profile.
These are tricky days for the global economy. As growth downshifts and corporate earnings weaken, some investors are dusting off playbooks for late-cycle investing. That makes sense, but there are a few twists to today’s market conditions that may require new responses.
Simply Google the phrase “what effect is Amazon having on retail” and you’ll discover a significant amount of information, articles and theories. Personally, I found the following article written by Susan Ward that articulated the sales of brick-and-mortar versus online to be quite illuminating.
In recent weeks, the US yield curve has been making investors nervous again. The curve has inverted before each of the last seven recessions, and it did so again on March 22. But what does an inversion really mean for equity returns?
Investors were dour heading into 2019 and while the mood became sunnier in the first quarter, there’s still plenty for investors to ponder and many potential threats to the relative calm.
Surfing for opportunities while using vigilance to avoid wipeout.
We recently heard a great adage about investing: “The stock market is the only market where people head for the exit when things go on sale.” And considering what followed 2018’s stock-market rout, heading for the exit certainly wasn’t a wise move.
The Dow Jones Industrials Average and S&P 500 are breathing down the neck of record highs set last Fall. Some take that as a sign to sell, time to shift out of equities and realize gains. We think that would be a mistake.
Press coverage around reverse mortgages has grown more positive as new research has explained how they can improve an overall retirement income plan. However, a lingering question remains about the costs of reverse mortgages.
Although I consider the overall stock market as represented by the S&P 500 to be overvalued, not all stocks are overvalued.
Clearly I have been “sitting here in limbo” for the last few weeks relaxing in Key West, which is a profoundly different planet. I love it! We stayed at Casa Marina, a resort I would highly recommend to anyone. So while I was limbo, it would seem as though the stock market was in limbo, as well.
On March 9, 2009 investors solely exposed to the S&P 500 would have a 10-year annualized return of negative 4.5% and a cumulative return of negative 37%. Starting March 9, 2009, however, the next 10 years would generate more than 17% per year, with a cumulative return of near 400%.
Last week, the Federal Reserve released their March FOMC meeting minutes. Following the release, the markets surged higher as the initial reading by the markets was “the Fed is done hiking rates.”
The IMF made news yesterday by announcing its latest updates to 2019 GDP growth around the world. It guided global growth down and made an especially large cut to Eurozone growth estimates, bringing them down 30bps since January to 1.3%.
What will we learn from upcoming data releases and political negotiations?
This article summarizes the four main reasons why, despite levels of seemingly low interest rates and despite the flatness of the yield curve, I have not shortened the target average maturity of my family’s bond portfolio.
Markets are caught between incoming data that point to slower global growth and forward-looking factors that suggest improvement later in the year. With the pause in U.S. Federal Reserve rate hikes, we expect modest recovery in global cycle conditions.
Although Friday’s payroll report had a lot to cheer and was generally seen as Goldilocks-like, looking under the hood should generate some caution.
One of the main goals of this series of articles is to illustrate the significant differences between individual stocks, and the significant differences between different sectors. Therefore, from this perspective, I have been attempting to illustrate the “nature of the beast” for each of the sectors I have covered.
Probably the most useful exercise we can do at present is to examine where the markets and the U.S. economy are in their respective cycles - with 19 charts and detailed analysis. There’s little question that the market is long into what Rhea described as the final phase of a bull market; “the period when speculation is rampant – a period when stocks are advanced on hopes and expectations.”
The Northern Trust Economics team shares its outlook for U.S. economic growth, inflation, unemployment and interest rates.
With the return of Europe's economic doldrums and signs of a coming growth slowdown in the United States, advanced economies could be at risk of falling into the same kind of long-term rut that has captured Japan. To avoid that outcome, policymakers must recognize and address the deeper structural forces at work.
A recession is coming. As Warren Buffett’s top lieutenant Charlie Munger points out, successful navigation comes down to trying to make as few mistakes as possible.
We believe that bond investors should use the benefits of a stable rate environment to buy yield on the short to intermediate part of the yield curve. Stock investors have a more complicated task in 2019, albeit less so now that the Fed has indicated it is not hiking interest rates and will end the reduction in its balance sheet assets by October.
Recession is coming. We can debate the timing, but the economy will turn decisively downward at some point. My own analysis, looking at the data available on April 4, says recession isn’t likely this year but unfortunately looks very probable in 2020.
Just because the market is celebrating the Fed’s policy u-turn doesn’t mean volatility is a thing of the past. Disconnects between fundamentals and assets prices don’t make for market stability.
The municipal and the Treasury yield curves are different. This is never more evident than when the Treasury curve inverts. There have been multiple historical incidences of Treasury 2's to 10's inversion in the last quarter century...
The prospect of a “trade war” between the United States and China has caused some investor trepidation over the past year. But are the fears of economic fallout from this “war” warranted? And, was there ever really a war at all?
The Non-Energy Minerals Sector is mostly comprised of very cyclical and typically commodity-based companies. Consequently, very few companies in this sector offer the consistency and predictability that prudent and/or conservative investors might require.
Very clear warning signs are now flashing that the U.S. economy could be heading for trouble and that the longest expansion in recent memory may soon end. But as usual, financial media and mainstream investors are once again flushed with optimism as the stock market plows higher.
Global markets enjoyed a strong start to the year, marking a steep reversal from the downdraft that maligned the fourth quarter. Weak or decelerating growth in virtually every major economy, coupled with lingering overhangs from international trade frictions, have compelled the major central banks to adopt stimulative policies for the foreseeable future.
The Commerce Department reported late last week that 4Q Gross Domestic Product rose only 2.2% (annual rate), down from its initial estimate of 2.6%. For all of 2018, GDP rose by 2.9% versus only 2.2% in 2017 and 1.6% in 2016.
U.S. stocks experienced their biggest quarterly gains in nearly a decade. The S&P 500 completed its best quarter since 2009, gaining 14%, while the S&P MidCap 400 and S&P SmallCap 600 gained 14% and 12%, respectively.
In Part III, we examined the role of economic paradigms in the equality/efficiency cycle. All the major economic paradigms previously discussed lead to eventual problems. Capital-friendly policies eventually lead to inequality, while policies less friendly to capital eventually become inflationary.
“Ark Invest” is a money management firm that manages money in ETFs, mutual funds, and separately managed accounts. Ark believes that innovation is the key to growth and alpha.
There has been a lot of talk the past few years about the flattening of the US yield curve—which is a graphical representation of the spread between short- and long-term interest-rate instruments. More recently, some market commentators have focused on the inversion of one part of the curve—and what it means.
In today’s Weekly Market Commentary, we share our “Final Four Factors” for the stock market in 2019: policy, the economy, rates, and profits. While we expect a hard-fought battle between these factors and, with it, some market volatility, we still see the potential for further gains for stocks this year.
This has been one of the 10 best ever starts to a year; over the past 60 years, similar fast starts have consistently led to continued gains in the months ahead.
The market, and the yield curve, are trying to tell you something very important.
Worried about retirement but don’t know how to start building wealth? Dollar cost averaging allows you to put a long-term plan in place and let compound interest work its magic.
Brief dips in U.S. stocks have done little to dent investor confidence; and with an inverted yield curve, trade uncertainty continuing, economic growth slowing and earnings possibly declining in the first quarter, we believe a pullback is becoming increasingly likely. Investors should remain disciplined and diversified and continue to prepare for the inevitable end of this cycle—without needing to pinpoint the timing precisely.
The Expansion’s Endgame?; Latin America: Caught In The Middle; What The Yield Curve Is (And Isn’t) Telling Us
We find the global economy and market at an interesting crossroad. Continuing our “noise” versus “signal” theme of the past 2-3 months, here is our take on the current environment.
Russ discusses the divergence between rising stock prices and falling bond yields. What gives and can it continue?
A major goal of this series on sectors is to illustrate the reality that it is a market of stocks rather than a stock market. With this article I am technically covering the Industrial Services Sector.
While we are constructive on the prospects for emerging markets in the year ahead, we think the real potential lies in individual country and thematic opportunities.
As economic cycles enter their later stages, investors sometimes find that they’re taking too much risk to generate income. There’s a strategy that can help—and we think now is the time to use it.
Bond yields are crashing in major markets all around the world as fears of a global economic slowdown have prompted investors to seek shelter in low-risk government debt. Both Germany and Japan’s 10-year bond yields are back below zero, marking the first time we’ve seen German yields turn negative since October 2016.
A shift in monetary policy among central banks has boosted markets since the start of the year. How much longer could the window of opportunity last before recession risks set in?
