We believe the risk that preferred-stock dividends will be suspended is low despite the recent announcement by the Federal Reserve that it is requiring banks to cap their common stock dividends.
The pandemic has delivered a global growth shock, but in doing so, it has accelerated the timeline for several mega trends that we have been actively investing in, such as productivity enhancement (robotics, automation, and software), e-commerce, electronic payments, and health care.
As we enter credit repair, we are wary of using the global financial crisis as a benchmark for the path to recovery. We see several key reasons that suggest this time will be different.
The June job market report and other indicators remained consistent with an unprecedented steep drop in economic activity in March and April, followed by a sharp-but-partial rebound in May and June. Many of these data were collected before the recent surge in COVID-19 cases.
The economic calendar is modest, and many market participants will probably extend their long weekends. The ISM Non-Manufacturing Index and jobless claims data will be the most important.
After a decade of steady growth and rising asset prices, economies and financial markets were rocked by the COVID-19 pandemic. The global health crisis forced most governments to lock down their communities, halting economic activity almost overnight and causing financial markets to reprice lower at an unprecedented speed.
Incredible as it may sound to nearly all observers – once they learn what MMT says – its basic economic tenets are agreed to by most knowledgeable economists. The dispute is not really over its core economic model; it is over fears of its perceived political implications.
If you haven’t heard of Modern Monetary Theory, or “MMT,” you will soon. If you recently lost your job due to the economic shut down, and received a stimulus check, you are already a beneficiary. As we will discuss in Part-1 of this two-part series, MMT’s theory falls flat when faced with reality.
Chief Investment Officer Terri Spath’s latest commentary.
In short, a demand-driven recession can’t end until demand returns. It doesn’t necessarily need to be the same kind of demand. Indeed, it probably won’t be. But something must restore consumer spending. A lot of entrepreneurs are spending late nights (and days) trying to figure out how to restore consumer spending.
With sentiment currently at very high levels, combined with low volatility, and a high degree of investor complacency, all the ingredients necessary for a market reversal are currently present. Am I sounding an “alarm bell” and calling for a massive correction? No.
Investors should consider these various investments—cautiously. Given the challenging economic outlook and high level of uncertainty, we believe bouts of volatility are possible, albeit not to the level witnessed in February and March.
As the economy reopens from COVID-19 restrictions, a question looms: What will colleges and universities look like come fall? Will students return to a more normal on-campus learning experience, some form of online experience, a combination of both … or will they simply not return?
In this latest survey, 68 leading bond and currency managers considered valuations, expectations and outlooks for the coming months.
Coronavirus cases and hospitalizations are spiking again in several countries, including the U.S. California had its biggest one-day jump in infections. Arizona, Florida and Texas are also turning into new hotspots.
Economies and markets whipsawed in the first half of 2020. Here’s what we expect for the rest of the year.
Returns for most fixed income asset classes are positive so far this year, but the numbers mask the rocky road markets have traveled since January.
Read Harold Evensky's latest NewsLetter.
New research shows that companies that adhere to positive ESG principles have lower costs of capital, higher valuations, are less vulnerable to systemic risks and are more profitable. But beware; those higher valuations translate to lower expected returns for investors.
The selloff this week was “perfectly normal,” according to the math. Find out why it makes sense to have a long-term investment horizon.
Why did unemployment fall? Why is Brexit proceeding? And why did so much food go to waste?
Rob Amodeo, Head of Municipals at Western Asset Management, digs into the state of the muni-bond market, his outlook moving forward and what investors have to look for to find winners in the sector.
Why did stocks rise over the past month despite grim economic news? The Federal Reserve’s massive liquidity injection is one reason.
Puerto Rico’s debt attracted investors throughout the U.S. for its higher yields and because the securities are tax exempt in all 50 states. Bondholders now wonder if they will ever get repaid.
I consider Oracle an attractively valued dividend growth stock with an emphasis on growth. Oracle has a long history of generating above-average growth of earnings and cash flows, and since paying its first dividend in 2009, its dividend growth has been nothing short of extraordinary.
Rationalizing high valuations won’t improve future return outcomes.
This week marked the 50th trading day since its March 23 low, with the S&P 500 rallying ~40% —the best 50 day rally since 1932. While the index has recovered ~85% of its virus-induced losses, there is still a distance to go, and if you are like me, the further the race goes, the more challenging it gets and the slower I advance.
Warren Buffett “should have kept airline stocks because the airline stocks went through the roof today,” President Trump said this week. It’s a good thing that investors chose not to follow Buffett’s lead, as airline stocks are up 50% since his exit.
Bruce Bond is co-founder and CEO of Innovator Capital Management. Having cofounded PowerShares Capital Management in 2003, he is recognized as one of the pioneers of the ETF industry. I spoke with him about the explosive growth in flows to defined-outcome ETFs.
European banks’ additional Tier 1 securities should survive a short bout of the coronavirus. But even in a prolonged pandemic, the risk/reward trade-off might be better than perceived.
Since broad domestic equity indices posted a bottom on March 23rd, they have not looked back. In fact, the S&P 500 Index (SPX), Nasdaq Composite Index (NASD), and Dow Jones Industrial Average (DJIA) have each rebounded with price returns in excess of 30% (data beginning 3/23/20 through 5/27/20).
The dominant question we’ve been getting from investors is about the perceived disconnect between what’s happening on Main Street and what’s happening on Wall Street.
As troubling as these developments are, it’s important not to lose sight of the good that appears to be taking place right now. Investors that focus only on the negative tend to miss out on the opportunities.
The Bureau of Labor Statistics reports that all 50 states experienced a decrease in payrolls and an increase in unemployment in April.
You don’t control the spread of COVID-19 or the timeline for when an effective treatment or vaccine will be available. You can control your expenses.
When the COVID-19 crisis shook markets in March, the Federal Reserve moved early and aggressively to help increase liquidity in financial markets.
Against this backdrop of anything-goes spending, the idea of having a national currency backed by a real asset like gold seems less and less crazy to some. Doing so, it’s believed, would force lawmakers to practice fiscal discipline, reign in inflation and normalize international trade.
The pandemic is putting universities and their graduates to the test.
We're seeing that there are meaningful differences between the last downturn and this one.
I’ve had three experiences with vendors seeking to assist with my new book. Check out the stories. They illustrate the need to adapt and be flexible.
A compassionate society has both economic reason and ethical responsibility to provide a social safety net to its most vulnerable members. It is an act of both economic insanity and ethical corruption to provide a financial safety net to its most reckless speculators.
On a day that started with good news on an experimental COVID-19 vaccine, with the stock market showing strong early gains, today’s report is more visual and less wordy than normal. Since I know not every reader of these publications follows me on Twitter—where I’m constantly posting charts, tables and data that I find compelling...
In his May 13 webcast on the economic outlook, Federal Reserve Chairman Jerome Powell struck a cautious tone. That mood was reinforced by the economic data reports that followed. The economic outlook depends on the virus and efforts to contain it. There’s hope that monetary and fiscal support will carry us through and the virus will be checked.
Jeremy Siegel, in time, will likely be proved wrong about the end of the “40-year bond bull” market. History suggests that not only is the “bond bull” alive and well, it likely has quite a long way as the U.S. will become more like Japan over time.
The economic effects from COVID-19 will be devastating. Stock and asset prices will fall dramatically and will take years to recover. U.S. Treasury yields will turn negative. Sell “risk-on” assets, increase cash, and buy Treasury bonds.
This year marks the 100th anniversary of the renowned investment firm Tweedy Browne. The firm was originally a broker, and one of its clients was Benjamin Graham. I interviewed six members of Tweedy, Browne’s investment committee.
The bitcoin halving that occurred this past Monday is only the third such event in the cryptocurrency’s 11-year history. In the months following the first and second halvings, bitcoin prices surged as it became abundantly clear that at some point in the near future, new bitcoin issuances will come to a halt.
The Fama–French value factor, and value investing in general, has suffered an extraordinarily long 13.3 years of underperformance relative to the growth investing style. The current drawdown has been by far the longest as well as the largest since July 1963. Arnott, Harvey, Kalesnik, and Linnainmaa examine the potential causes of value’s underperformance and provide estimates of value’s performance relative to growth’s performance under different revaluation scenarios over the next decade.
