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?
Last Friday I spoke to a number of money managers. One of the attendees was Linda Bradford Raschke, a professional trader, who used to trade on the Pacific and Philadelphia Stock Exchanges, founded a number of hedge funds, well you get the idea.
The inversion of the 10y-3m yield curve unleashed a sharp pullback in stocks; but the Fed’s “preferred” curve first inverted in early January.
It is a big economic calendar with almost every report on housing released in a single week. This is the result of the shutdown delay. Now we can get more clarity on this important sector. Pundits will be asking: Are lower mortgage rates helping home sales?
Today stocks erased their weekly gains and bond yields fell. Chief among the contributors were a Treasury yield curve inversion, the first since before the financial crisis, and continued slowdown in the pace of U.S. manufacturing expansion.
Investors in UK inflation-linked bonds are facing two critical sources of structural uncertainty: Brexit-induced volatility and questions about the deeply entrenched (yet problematic) Retail Price Index (RPI
Matching the stock market’s long-term average returns sounds like it should be easy, if you’re patient enough. But in fact it is remarkably difficult. In last week’s letter, Ed Easterling and I showed you why it is a longshot bet in almost every market environment. Returns over a decade or two are usually well above or well below average. Most of all, it’s fairly predictable which side of average will occur. Today Ed and I will expand on that discussion.
What happens in China clearly does not stay in China so the outlook for China’s growth in 2019 is one of the keys to how the global economy will perform and how financial markets will respond to that level of growth.
In a widely expected outcome, the Federal Reserve announced no change to the Fed funds rate but did leave open the possibility of a rate hike next year.
The Schwab Center for Financial Research’s theme for 2019 was “be prepared,” and that still holds true. Here’s what we expect to see for the remainder of the year.
We believe short-term interest rates in the U.S. are now anchored in The New Neutral, as global growth keeps synching lower.
As expected, the U.S. Federal Reserve (the Fed) left interest rates unchanged at the conclusion of today’s policy meeting, once again emphasizing a patient approach to monetary policy in the months ahead.
A brief monthly update on what's happening in the municipal bond market.
To the dismay of many observers, US treasury yields have been dead as a doorknob despite the 20% rally in stocks over the last three months. In fact, the US 10-year yield is on the verge of breaking below the 2.56% level it reached on January 4th when recession concerns were flaring.
Investors in UK inflation-linked bonds are facing two critical sources of structural uncertainty: volatility arising from the Brexit process, and questions about the deeply entrenched (yet problematic) Retail Price Index (RPI), to which UK “linkers” are tied.
Extraordinary policy measures are proving extraordinarily difficult to undo.
A long time ago in a galaxy far far away I began working on Wall Street. The year was 1971 and I had joined a small firm making markets in over-the-counter stocks and options. My salary was $100 a week and it was Camelot.
A New Normal For The Fed Balance Sheet; How Tariffs Work…and Don't Work; The ECB Goes Back To The TLTRO Well
The value of negative-yielding bonds around the world has ticked up to more than $9.32 trillion. Although still below the 2016 high, this indicates that investors fear global economic growth is slowing. Is this gold’s time to shine?
Last week, I described the enormous challenges retirees face. One reason for that, aside from insufficient savings, is that markets haven’t delivered the returns many experts said we could plan on.
Recession fears have risen and stocks have become more volatile, but is now the time to prepare for a sharp downturn?
The Health Services Sector is one of the smallest sectors as presented by FactSet as it only contains 137 companies out of more than 19,000 in the US and Canadian universe.
We favor Asian high yield over investment grade credits in spite of historical higher volatility since we view valuations as more attractive, particularly compared with U.S. high yield and emerging market peers.
Fourth-quarter volatility expanded the opportunity set for those looking for a deal.
As I wrote on Friday, the weak economic outlook from the ECB, continuing reduced earnings estimates, worries about the Mueller Report, renewed Chinese trade war tensions, and the underperformance of the cyclical sectors bringing on cries of recession all proved too much for stocks...
Want to build a diversified, tax-efficient, and low-cost income fund for your clients? Here’s a surprising way to do that with a broad-based index fund like the S&P 500.
Institutions have been using managed-risk strategies for a long time, and thanks to the ETF vehicle they are now accessible to financial advisors and end investors. Irma Bribiesca, who is the director of ETF strategy and product management for Transamerica Asset Management, has been at the forefront of designing and building those strategies.
In this issue, Research Affiliates assesses risks facing the All Asset strategies and shares insights from its CEO on fostering a winning corporate culture.
Rick Rieder and Russ Brownback argue that as the conventional wisdom in policy and investment circles surrounding prospects for growth and inflation have shifted in 2019, so too have investment opportunities.
Extremism at either end of the political spectrum can raise huge obstacles for business and investors. The difference, though, is that hard-left legislation seeks to punish wealth and prosperity through politics of envy.
Russ explains the mystery of why gold is performing surprisingly well while stocks are rallying.
I found more value in the Finance Sector than I did in any other sector that I screened. All in all, I identified 131 attractively valued companies out of the 1,888 companies in the Finance Sector.
In this article, we show returns of portfolios comprised of high-ESG scoring companies. More importantly, we use attribution analysis to show contributions from sector, industry and stock selection within these portfolios.
Sacagawea lived from May 1788 to December 1812. She was a Lemhi Shoshone woman who is best known for her help guiding the Lewis and Clark Expedition in achieving their mission objectives by exploring thousands of miles from North Dakota to the Pacific Ocean.
Chinese stimulus could be instrumental in deciding which investors are proved right.
The metals and mining industry could be undergoing some dramatic changes in the near future, and it’s important for investors to get in on the ground floor. I’m proud of our track record of getting in early with a number of successful companies.
This paper discusses Smith Capital Investor’s 2019 outlook on interest rates, with a focus on likely volatility in 2019 and the implications of stocks and bonds moving in tandem.
This isn't the time in the cycle to take excessive risk. The easy money has already been made. Astoria's 2019 playbook is as follows: late cycle economic forces + desynchronized global growth + a deteriorating earnings cycle = the need for more defensive posturing across stocks and bonds.
Given the generally positive trends on both market signals and noise, is it any real surprise that the markets have rallied as they have so far this year?
Over the years, I have always thought that the left’s obsession with global warming was really just an excuse to push through a fully socialist economic agenda. After all, the radical changes that would be required for businesses and consumers to rapidly reduce our carbon footprint could only come about through government mandates and force.
The Energy Minerals Sector is comprised of 619 companies. And, as it is with every sector, they come in all shapes, sizes and colors. However, a common attribute that is shared by most companies in this sector is a significant amount of cyclicality in their operating results, i.e., earnings and cash flows.
Chinese stimulus could be instrumental in deciding which investors are proved right....
A generation ago, China had little influence beyond its borders. Today, its importance to the world economy rivals the United States’. China’s role in markets is growing, too: in April, it will join a major global bond index. The future may bring a freely traded Chinese yuan and a challenge to the US dollar.
I was traveling last week seeing portfolio managers and doing gigs for our financial advisors and their clients. I have been doing such events for much of the past six months. The recurring question from clients is, “What about the national debt?”
