Four years ago this week (2/19 to be exact) the S&P 500 climbed to an all-time high of 3,386 before plunging over -34% as the world economy shutdown due to the pandemic.
Debt levels will likely continue to rise absent policy changes, and the yield curve is likely to steepen.
The REIT sector has faced many challenges over the past few years, including COVID-related closures and tightening monetary policy. Franklin Equity Group Portfolio Managers Blair Schmicker and Daniel Scher discuss how a return to pre-pandemic monetary policy could mean a promising 2024 for publicly traded real estate.
NVIDIA reported financial results for the fourth quarter and full-year 2023 this week, and I’m still picking my jaw off the floor.
A Fidelity International money manager has sold the vast majority of US Treasuries from funds he oversees on expectations the world’s biggest economy still has room to expand.
How many Wall Street buzzwords can you fit into one security? The limit is being tested by a new breed of options-fueled exchange-traded funds making inroads with the retail crowd.
Record issuance in the corporate bond market is giving fixed income investors an abundance of opportunities. However, due diligence is necessary as high-yielding bonds may uncover a risky proposition that doesn’t quite match an investor’s risk profile.
Short-term bond yields are high currently, but with the Federal Reserve poised to cut interest rates investors may want to consider longer-term bonds or bond funds.
Many investors remain in cash, but we think it’s time to shift exposure to bonds.
History shows that when the Federal Reserve (Fed) is paused and easing, longer duration higher quality fixed income has outperformed riskier assets, as well as money market instruments.
The $1.4 trillion US junk-bond market is getting junkier, as more debt gets either downgraded or elevated out of the high-yield universe altogether, leaving greater potential risks for investors.
We think market optimism can persist for now but stay nimble. We get more active in our long-term portfolios given a greater dispersion of returns.
The challenges in banks' portfolios will work out over time.
The real estate sector represents a mere 2.31% of the S&P 500. Just two sectors – materials and utilities – command smaller allocations in the benchmark domestic equity gauge. That low weight garnered by real estate stocks and REITs belies the popularity of those assets among investors.
This year continues to follow in the footsteps of 2023, marked by increased investor optimism but ongoing uncertainty. For now, much remains unknown, and a higher January inflation print only proves the challenges that still lie ahead.
Patience is required when embracing long-dated bonds and corresponding exchange traded funds. In standard market environments, intraday price action for long duration Treasurys usually isn’t breathtaking. Nor are investors expecting it to be.
Investors are beginning to war-game how the Federal Reserve can manage a US economy that just won’t land, with some even debating whether interest-rate hikes will be needed only weeks after a steady run of reductions appeared all but certain.
Sentiment data is beginning to match relatively strong "hard" economic data.
A record month of issuance in January and still relatively high yields could be prime drivers of demand for corporate debt in the current market environment. With that, an all-encompassing approach to corporate debt is available in the Vanguard Total Corporate Bond ETF ETF Shares (VTC).
Approximately 80% of all S&P 500 companies have reported fourth-quarter earnings as of today, and of those, 75% have reported earnings per share (EPS) above estimates. That’s well above the 10-year average, according to FactSet.
There is some conventional wisdom as it pertains to how interest rates affect stocks. For example, the real estate and utilities sectors are viewed as negatively correlated to 10-year Treasury yields. That explains why those sectors struggled last year.
January’s US inflation print came as an unwelcome spoiler for financial markets, dealing what looks like the final blow to hopes of a March interest-rate cut, sending bond yields back up and triggering a major one-day correction in equities.
US retail sales broadly declined in January, indicating consumers took a breather after a strong holiday shopping season.
Stephen Dover, Head of Franklin Templeton Institute, recently hosted a discussion with Michael Buchanan, Co-Chief Investment Officer, Western Asset Management, and Brendan Circle, Portfolio Manager, Franklin Income Investors. The group considered the current market environment as it pertains to cash in client portfolios. Has cash reached a tipping point?
It’s tempting to dismiss the response to Tuesday’s inflation data as an outsized reaction to a slight miss in numbers that are particularly vulnerable to seasonal noise. Yet the development is also indicative of deeper issues whose influence may well be with us for the next few months and quarters.
US banks are starting to ramp up purchases of everything from mortgage-backed securities to collateralized loan obligations after nearly two years of cutting back, adding fuel to a multi-month rally across credit markets.
Bond traders are turning their attention to the latest reading on inflationary pressures in the US economy as concern mounts the recent selloff has further to run.
Many midstream companies provide guidance for the year ahead, but a select group also offer EBITDA growth guidance or targets for the next few years. Visibility to future EBITDA growth provides important context for dividend growth.
The consumer price index (CPI) for January showed that core inflation held steady at a rate of 3.9% last month, a small setback in a trend of moderating inflation in the U.S. Healing in global supply chains and a rebalancing of the U.S. labor market have helped to dramatically tame inflation over the past year.
A slate of US economic data is about to put the loftiest Treasury yields this year to the test.
The coming 12 months are shaping up as the year of the interest-rate cut. After racing ahead with the most aggressive tightening campaign in decades during 2022 and 2023, central banks around the world are poised to begin easing monetary policy as inflation continues to retreat.
Capital markets pondering when and how fast rate cuts come may invoke anxiety in fixed income investors expecting yields to fall. If they’re willing to extend their exposure to higher duration, they can attain the higher yields they seek.
The latest consumer price index reading indicated that core prices — excluding volatile food and energy — rose 0.4% in January from a month earlier, exceeding the median economist forecast.
Traders ratcheted down their expectations for a Federal Reserve’s interest-rate cut before July, and Treasury yields soared, after a report showed that inflation remains sticky in the US.
Two seasoned investment professionals bring us up to date on the intersection of commercial real estate and bank lending.
One of the major benefits of municipal bonds is that the interest earned is exempt from federal income taxes. The appeal of earning money that you do not have to pay taxes on understandably piques the interest of many investors.
The cost of housing remains a hot-button topic with both Millennials and Gen-Z. Plenty of articles and commentaries address the concern of supply and affordability, with the younger generations getting hit the hardest.
Market folklore provides an easy, but inaccurate guide for investing in today's interconnected and complex market. Indicators based on economic or market behavior may be preferred.
The latest January release of the ClearBridge Recession Risk Dashboard shows another indicator move from red to yellow. Jeff Schulze of ClearBridge Investments shares his insights on what this could mean for the recession outlook in the United States and the overall state of the economy.
Digital currencies are back, at least if you ask the crypto faithful. The US Securities and Exchange Commission has at last approved Bitcoin exchange-traded funds— begrudgingly, with a hard nudge from the courts. Renewed investor enthusiasm in risky assets such as technology stocks seems to have rubbed off on tokens, too.
Investors who stay too long in cash may find they’ve missed out.
High yield bonds are off their highs of 2023, but even now, with all-in yields around 8%, the asset class remains competitive with equities for total return potential with significantly better downside protection, according to Payden & Rygel’s Jordan Lopez and Nick Burns.
There are three pitfalls that I most commonly see income investors fall victim to. I hope illustrating them will help you avoid their damaging effects on your investment portfolio.
Bond traders are finally heeding one of the market’s oldest lessons: Don’t fight the Fed.
Closed-end funds (CEFs) are relatively under the radar compared to peers like exchange-traded funds (ETFs) and mutual funds. Closed-end funds are generally desirable for two reasons: 1) high income; and 2) premium/discount mechanism.
A data-dependent Federal Reserve is keen to hold interest rates until it gets additional confirmation inflation is cooling. This could keep the window open for prospective bonds investors seeking value opportunities.
Mortgage rates in the US inched higher amid signals that the Federal Reserve is likely to keep its policy steady for some time.
Over long horizons, dividends’ growth and reinvestment of those payouts serve as vital factors in portfolio growth. However, dividends aren’t guaranteed and with bond yields still high, some skittish investors may be inclined to embrace fixed income over equity income.
Tomorrow marks the start of China’s Lunar New Year, meaning it’s out with the Rabbit and in with the Dragon… but all eyes remain on the Bear. And no, I’m not talking about the hit Hulu series, but Russia.
Treasury yields rose further — with some reaching year-to-date highs — ahead of inflation data comprising the market’s next test after a string of Treasury auctions went off without a hitch.
