Flashing green light – crowd will determine path forward.
As we look at today’s economy and financial markets, we are at a crossroads: Will it be a long straight highway to a soft landing, or will it be a bumpy road to recession?
We expect bond yields to trend gradually lower—but it may be a bumpy ride. These seven strategies may help investors take advantage.
I’ve been too pessimistic about the risks of a so-called hard landing for the US economy over the past few years. Although most of my conclusions that led to that view were correct, such an outcome remains very much in doubt.
The M2 money supply growth rate in the U.S. accelerated, marking the first time the monthly change exceeded a 5% annualized rate after several months of more moderate increases. A 5% money supply growth is a desirable target, as it reflects 2-3% growth in the economy with 2% inflation. Thus, the uptick in money growth is reassuring and supports the possibility that we will avert a hard landing for the economy.
Reaching age 65 with a net worth of $1 million dollars is a way to provide a comfortable and secure retirement. It is also a reasonable and achievable goal for many middle-class workers who would, quite accurately, never describe themselves as wealthy.
The last two years brought challenges for investors across all walks of life, but particularly for retirees.
A stronger-than-expected pivot to stimulus in the world’s two biggest economies has brightened the market outlook. For economists, the jury is still out.
I attended and spoke at the European Blockchain Convention this week in Barcelona, where the energy around digital assets, Bitcoin and Web3 was palpable. Among the 6,000 attendees, there was a sense that we’re on the brink of a new era in finance and digital infrastructure.
Buyout heavyweights are increasingly resorting to the old-fashioned way of making money — actually running the companies they’ve bought.
Financial services, like many institutions, are losing Americans’ trust. That’s a problem. Economies depend on a healthy financial system, as became painfully evident during the 2008 financial crisis, and that system operates largely on trust — confidence that people can access the money in their bank accounts, that their investment accounts are secure, and that their trades will be filled at quoted market prices, to name just a few everyday financial interactions.
Policy, more likely to be dictated by economic circumstances, may not resemble generous populist proposals, which could limit their impact on stock markets.
Historically, investors have struggled to add meaningful alpha through security selection. A dynamic new credit scoring approach could change that.
On September 18, the Federal Reserve cut the Federal funds rate, as expected, announcing at the same time that the Fed will continue to reduce its balance sheet. In my view, both of these decisions were appropriate. The Fed reduced short-term rates by 50 basis points, which was consistent with economic conditions that remain near the threshold of recession.
Investors poured money into exchange-traded funds that buy emerging-market bonds last week as optimism around the Federal Reserve’s easing cycle fueled risk appetite.
A popular rebuttal of the idea that the US ought to worry about its surging public debt is, “What about Japan?” America’s taxpayers are currently on the hook for 123% of gross domestic product, exceeding the previous record of 118% in the aftermath of the second world war, and the number is going up.
For years, the U.S. has been the dominant player in military spending, with American companies like Lockheed Martin and RTX (formerly Raytheon) commanding the global arms market. But now, Europe—specifically its arms manufacturers—may be the next big opportunity for savvy investors.
As GMO celebrates its 30th anniversary managing emerging debt this year, we offer our comprehensive guide to emerging debt markets. Given the tumultuous recent events – a global pandemic, defaults, repricing of interest rates, relentless strength in the U.S. dollar – we’ll focus on the Why as a starting point. Then we’ll dive into the proliferating How, covering strategies and vehicles.
The Northern Trust Economics team reacts to the Fed's decision and shares its outlook for U.S. growth, employment and inflation.
While the beach version of SoCal has had an epic, non-marine layer summer, it seems to have been enjoyed by few locals who instead violate the cardinal rule of adult life without children living at home and nevertheless travel to Europe in summer. We haven’t missed you.
Many investors understandably are wondering where Japan’s equity markets are heading. The market had a good year through June. After that it changed. The Bank of Japan's hawkishly delivered interest rate increase on July 31 preceded the release of weak U.S. economic data.
Aligning a client’s values with their financial decisions is often touted as a best practice for financial advisors. It’s time to reexamine that premise.
History suggests Presidential elections are not nearly as important to the financial markets as the media plays them up to be, and a focus on fundamentals rather than political slogans has generally been beneficial. Historical asset class and sector performance shows virtually no consistent performance pattern under Democratic or Republican Presidents.
The August jobs report highlighted a critical reality: the labor market is cooling off. While the headline figures seemed decent, the underlying data reveals clear warning signs that worker demand is slowing.
Investors piled money into exchange-traded funds that buy emerging-market bonds on Friday amid optimism that developing-nation debt will get a boost from a highly anticipated Federal Reserve rate cut this week.
The August consumer price index report showed that U.S. inflation slowed to 2.5%
How rapidly should the Fed cut rates?
The US Federal Reserve faces a crucial decision at its policy-making meeting this week: Ease off slightly on monetary restraint with a 25-basis-point interest-rate cut, or go for a rare 50-basis-point cut to fend off a recession.
Nvidia’s strong earnings exceeded expectations, but the stock fell as investors recalibrated their expectations given its high valuation.
As AI's usage becomes increasingly widespread around the globe, energy consumption is soaring, along with a demand for additional power.
The next U.S. president will face immediate fiscal challenges.
While technology is a powerful driver of economic growth, it also presents challenges that can negatively impact productivity, equality, mental health, and societal cohesion. Addressing these issues ensures that technological advancements promote sustainable and inclusive economic growth.
In emerging markets, technological advancements present a unique opportunity to empower underserved communities.
The safest way to ensure retirement security is to match, on a year-by-year basis, future spending needs with a reliable stream of inflation-adjusted income and maturing fixed-income assets. As we’ve already seen, a conventional stock/bond portfolio may not cut that mustard.
An analysis of the leadership reversal and market sell-off observed in recent weeks and why an emphasis on equities with consistent fundamentals is justified.
We are entering a time I think will include a deep crisis. We are going to need each other. We really do need to “find our tribe.”
In a recent discussion with Adam Taggart via Thoughtful Money, we quickly touched on the similarities between the U.S. and Japanese monetary policies around the 11-minute mark. However, that discussion warrants a deeper dive. As we will review, Japan has much to tell us about the future of the U.S. economically.
Despite pullbacks and elevated volatility in the earlier days of the month, major equity indices were up in August.
In this edition, Harold Evensky explores the challenges facing sustainable and active funds, the implications of the new DOL Fiduciary Rule, and the value of long-term performance projections. With candid observations and critical analysis--read on to gain perspective on navigating the complex world of investing, the importance of risk management, and the role of fiduciary advisors in securing your financial future.
On the latest edition of Market Week in Review, Director and Senior Investment Strategist Alex Cousley and ESG and Active Ownership Analyst Zoe Warganz discussed key takeaways from the U.S. Federal Reserve’s (Fed) annual economic symposium in Jackson Hole, Wyoming.
The August S&P Global US Manufacturing PMI™ fell to 47.9 in August from 49.6 in July, indicating a modest deterioration in business conditions for a second straight month. The latest reading was just below the forecasted reading of 48.0 and is the index's lowest level of the year.
As I write this, gold continues to trade above $2,500 an ounce after surging past the psychologically important level for the first time ever in mid-August. For seasoned gold mining investors, this should be a moment of validation. After all, the yellow metal has long been seen as the ultimate hedge against economic uncertainty.
China's economic transformation presents both challenges and opportunities for global markets.
Last week’s meeting of central bankers in Jackson Hole was a kind of victory lap for the Fed. It may have also marked the peak of its power.
The level of U.S. Treasury yields and the changing shape of the Treasury yield curve provide investors with critical feedback regarding the market’s expectations for economic growth, inflation, and monetary policy
Midstream’s second quarter earnings calls reinforced the positive outlook for US natural gas demand driven in part by expected power demand from data centers. This note discusses the advantages of natural gas for data centers, additional factors contributing to demand growth, and how midstream is uniquely positioned to benefit from these trends.
This week, before she accepted the Democratic Party’s nomination for president, Vice President Kamala Harris threw her support behind President Joe Biden’s tax proposals for 2025, which include a steep 44.6% capital gains rate and an unprecedented 25% tax on unrealized gains.
Chair Jerome Powell said the time has come for the Federal Reserve to cut its key policy rate, affirming expectations that officials will begin lowering borrowing costs next month and making clear his intention to prevent further cooling in the labor market.
Since our last update of the Three Tactical Rules on June 25, 2024, equity markets have retraced most of the rally from the spring. The change in market sentiment came abruptly, due to the labor market showing signs of weakness as the number of jobs available per unemployed worker fell to 1.2 and the unemployment rate rose to 4.3%. The recent market volatility has had a dramatic impact on our tactical rules.
With questions swirling around Federal Reserve policy, the state of the economy and the US presidential race, at least one thing seems clear on Wall Street: spending on artificial intelligence remains a central priority.
As the AI halo begins to fade, equity investors are seeking companies that can profit from—and not just pontificate about—artificial intelligence.
Ethical Capital's Sloane Ortel marshals the data to counter the arguments against aggressively fighting climate change laid out in Larry Siegel's recent article.
This year’s presentation by Chair Jerome Powell is eagerly awaited due to the economic fluidity and financial volatility that the US has been experiencing, and its spillovers to the rest of the world.
Powell will hint at normalizing monetary policy, but at a measured pace.
BlackRock Inc. says the market for blended finance has now reached a “turning point,” as it targets growth in deals that combine private and public funding.
When US Federal Reserve Chair Jerome Powell speaks at next week’s annual economic conference in Jackson Hole, Wyoming, people will be listening intently for any hint about what the central bank will do with interest rates at its September policy making meeting.
Alphabet Inc. investors are facing a long period of uncertainty as they grapple with a scenario they previously saw as unlikely: a possible breakup of Google.
Builder confidence fell further in August as a lack of affordability and buyer hesitation continue to slow down the market. The National Association of Home Builders (NAHB) Housing Market Index (HMI) dropped to 39 this month, its lowest level of the year. The latest reading came was below the forecast of 43.
The inflation numbers this week — both for producer and consumer prices — have served to reassure markets in two distinct ways: confirming continued progress in the battle against high price increases and supporting the ongoing shift in the Federal Reserve’s focus from its inflation mandate to its employment mandate.
It's a good time to revisit which equity market sectors are defensive themes. Certain products are nondiscretionary we can't live without.
A bid to break up Alphabet Inc.’s Google is one of the options being considered by the Justice Department after a landmark court ruling found that the company monopolized the online search market, according to people with knowledge of the deliberations.
The KraneShares Sustainable Ultra Short Duration Index ETF (KCSH) offers low risk income investing with notable yields and diversification.
The Jensen Quality Growth ETF is a high-conviction U.S. large-cap ETF with a growth tilt. The ETF’s investment approach is rooted in bottom-up fundamental analysis, focusing on quality companies that have demonstrated consistent performance and resilience over time.
Everybody loves a good comeback story: Seabiscuit. The Mighty Ducks. 493 stocks in the S&P 500 index.
Four interlinked principles form a compelling investment philosophy for uncovering promising growth companies.
The early August sell-off could represent just the market taking a breather after seven months of fantastic returns and could be right back on track, albeit with additional volatility.
Savvy advisors that blend classic prospecting methods with modern tech are not only reviving successful strategies from the past but are also setting the stage for sustainable future growth.
Andy Rothman provides four reasons why he’s stubbornly convinced that Xi Jinping will eventually overcome his stubbornness and make the changes necessary to put China back on track to reach its potential growth rate.
Economist Claudia Sahm developed the “Sahm Rule,” which states that the economy is in recession when the unemployment rate’s three-month average is a half percentage point above its 12-month low.
While strategy provides direction, a strong culture is the foundation that supports and sustains an organization’s success. Culture influences every aspect of an organization and defines the purpose and values that guide the actions of employees.
For a technology that promises to help businesses cut costs, artificial intelligence has had a big problem with being so costly.
On the latest edition of Market Week in Review, Investment Strategist BeiChen Lin and ESG and Active Ownership Analyst Zoe Warganz discussed key takeaways from recent central bank meetings. They also provided an update on how U.S. small cap companies are performing during second-quarter earnings season.
A recent mid-year strategist pulse check from Natixis revealed where strategists believe the top opportunities exist across markets.
De Leus and Gijsels, both originating in the world of institutional brokerage identify the five principal trends affecting investments in the near future. The two take turns writing chapters so that the book is a straight man/funnyman show, with the straight man providing mostly sound, conventional analysis and the funnyman interviewing dead economists and Fed chairmen not yet born.
With stock markets plunging around the world, traders are talking up the prospect of an emergency interest-rate cut from the Federal Reserve after the US central bank passed up the opportunity to ease policy last week. Not only is this highly unlikely, it would be counterproductive.
Advisors and investors that want to try to outperform can still gain some diversification benefits using concentrated ETFs.
The central bank’s latest policy statement and Chair Jerome Powell’s remarks suggest that an initial interest rate cut could come as soon as September.
Today’s passive index investing requires active choices, as customization and innovations in index funds have resulted in new considerations for investors and the potential for greater control.
Reasonable Treasury debt ratios and more than enough buyers put Treasuries in a much better light than is commonly heard.
Macro drivers mixed with market narratives last week to sustain the volatility cocktail being served in July
Unfortunately, investors have little else to work with given the table scraps of useful data being offered by the tech giants. None of the top companies have yet adequately spelled out the financial performance of AI adoption on their income statements.
Improving inflation and growth scenarios should enhance the equities and bond dynamic for multi-asset investors.
President Joe Biden’s withdrawal and endorsement of Vice President Kamala Harris has sent shockwaves through the political establishment, and while former President Donald Trump remains the frontrunner, the wind has certainly shifted in Harris’s favor.
Yes, the market could continue to rotate massively from large-cap to small and mid-capitalization companies. However, given the current levels of bullish sentiment and allocations against a backdrop of weakening economic data and widening spreads, this suggests the current rotation may be nothing more than a significant short-covering rally.
Progress toward a goal usually isn’t linear. The first 50% isn’t too bad, the next 40% is harder, and the last 10% consumes most of the effort and resources. Business strategists call this the “last mile” problem… and it applies to inflation, too.
The Momentum factor picked up where it left off at the end of the first quarter, turning in another standout performance in the April-through-June timeframe and ending the second quarter as the factor most relevant to positive performance.
The small cap rally has primarily been a de-risking event. It's unclear at this point whether it’s just a blip or the beginning of a new trend in market leadership.
It's been another strong first half for the U.S. ETF industry, with overall flows set to challenge or surpass historic records.
For taxable investors, an appreciating portfolio can be a mixed blessing. But regular loss harvesting isn’t the only way to reduce your portfolio’s tax bill, especially as its value rises. We share some important tax-management techniques for the future.
The momentum we've seen in U.S. equity markets over the past year continued in the second quarter of 2024. With large technology stocks leading the wave, the S&P 500 index has risen 23% in the 12 months ended June 30.
Sustainable Investing
Tactical Rules Remain Bullish
Flashing green light – crowd will determine path forward.
The Great American Road Trip
As we look at today’s economy and financial markets, we are at a crossroads: Will it be a long straight highway to a soft landing, or will it be a bumpy road to recession?
Fixed-Income Outlook: Strategies for a Controlled Descent
We expect bond yields to trend gradually lower—but it may be a bumpy ride. These seven strategies may help investors take advantage.
How My Hard Economic Landing Forecast Went Wrong
I’ve been too pessimistic about the risks of a so-called hard landing for the US economy over the past few years. Although most of my conclusions that led to that view were correct, such an outcome remains very much in doubt.
Money Supply Growth Eases Hard Landing Fears
The M2 money supply growth rate in the U.S. accelerated, marking the first time the monthly change exceeded a 5% annualized rate after several months of more moderate increases. A 5% money supply growth is a desirable target, as it reflects 2-3% growth in the economy with 2% inflation. Thus, the uptick in money growth is reassuring and supports the possibility that we will avert a hard landing for the economy.
Could You Be a Middle Class Millionaire?
Reaching age 65 with a net worth of $1 million dollars is a way to provide a comfortable and secure retirement. It is also a reasonable and achievable goal for many middle-class workers who would, quite accurately, never describe themselves as wealthy.
For Retirees, Interest Rates & Inflation Remain Risks
The last two years brought challenges for investors across all walks of life, but particularly for retirees.
Market-Boosting Moves in US, China Yet to Convince Economists
A stronger-than-expected pivot to stimulus in the world’s two biggest economies has brightened the market outlook. For economists, the jury is still out.
How M-PESA Is Leading a Financial Revolution Across Africa
I attended and spoke at the European Blockchain Convention this week in Barcelona, where the energy around digital assets, Bitcoin and Web3 was palpable. Among the 6,000 attendees, there was a sense that we’re on the brink of a new era in finance and digital infrastructure.
Private Equity Calls in Experts to Fix Firms They Can’t Sell
Buyout heavyweights are increasingly resorting to the old-fashioned way of making money — actually running the companies they’ve bought.
We Asked a Nobel Prize-Winning Economist How to Fix Fintech
Financial services, like many institutions, are losing Americans’ trust. That’s a problem. Economies depend on a healthy financial system, as became painfully evident during the 2008 financial crisis, and that system operates largely on trust — confidence that people can access the money in their bank accounts, that their investment accounts are secure, and that their trades will be filled at quoted market prices, to name just a few everyday financial interactions.
2024 Elections: Big Bark, Little Bite
Policy, more likely to be dictated by economic circumstances, may not resemble generous populist proposals, which could limit their impact on stock markets.
Core Score: How a New Approach to Credit Investing May Harness More Alpha
Historically, investors have struggled to add meaningful alpha through security selection. A dynamic new credit scoring approach could change that.
Asking a Better Question
On September 18, the Federal Reserve cut the Federal funds rate, as expected, announcing at the same time that the Fed will continue to reduce its balance sheet. In my view, both of these decisions were appropriate. The Fed reduced short-term rates by 50 basis points, which was consistent with economic conditions that remain near the threshold of recession.
Rate Cut Kickoff Sparks Rush to Emerging Market Bond ETFs
Investors poured money into exchange-traded funds that buy emerging-market bonds last week as optimism around the Federal Reserve’s easing cycle fueled risk appetite.
America’s Fiscal Exceptionalism Is All Too Real
A popular rebuttal of the idea that the US ought to worry about its surging public debt is, “What about Japan?” America’s taxpayers are currently on the hook for 123% of gross domestic product, exceeding the previous record of 118% in the aftermath of the second world war, and the number is going up.
Surge in Defense Funding Puts European Stocks in the Spotlight
For years, the U.S. has been the dominant player in military spending, with American companies like Lockheed Martin and RTX (formerly Raytheon) commanding the global arms market. But now, Europe—specifically its arms manufacturers—may be the next big opportunity for savvy investors.
The What-Why-When-How Guide to Owning Emerging Debt
As GMO celebrates its 30th anniversary managing emerging debt this year, we offer our comprehensive guide to emerging debt markets. Given the tumultuous recent events – a global pandemic, defaults, repricing of interest rates, relentless strength in the U.S. dollar – we’ll focus on the Why as a starting point. Then we’ll dive into the proliferating How, covering strategies and vehicles.
No Half Measures
The Northern Trust Economics team reacts to the Fed's decision and shares its outlook for U.S. growth, employment and inflation.
Summer Cocktails, White Sneakers, Nvidia: It’s Back to Schooling
While the beach version of SoCal has had an epic, non-marine layer summer, it seems to have been enjoyed by few locals who instead violate the cardinal rule of adult life without children living at home and nevertheless travel to Europe in summer. We haven’t missed you.
The Fundamentals of Japan
Many investors understandably are wondering where Japan’s equity markets are heading. The market had a good year through June. After that it changed. The Bank of Japan's hawkishly delivered interest rate increase on July 31 preceded the release of weak U.S. economic data.
Aligning Values With Money Isn’t Your Job
Aligning a client’s values with their financial decisions is often touted as a best practice for financial advisors. It’s time to reexamine that premise.
Fade the Election
History suggests Presidential elections are not nearly as important to the financial markets as the media plays them up to be, and a focus on fundamentals rather than political slogans has generally been beneficial. Historical asset class and sector performance shows virtually no consistent performance pattern under Democratic or Republican Presidents.
Labor Market Impact On The Stock Market
The August jobs report highlighted a critical reality: the labor market is cooling off. While the headline figures seemed decent, the underlying data reveals clear warning signs that worker demand is slowing.
Risk Traders Buy Emerging-Market Bond ETFs Ahead of Fed’s Cut
Investors piled money into exchange-traded funds that buy emerging-market bonds on Friday amid optimism that developing-nation debt will get a boost from a highly anticipated Federal Reserve rate cut this week.
What Does the Latest U.S. Inflation Report Reveal?
The August consumer price index report showed that U.S. inflation slowed to 2.5%
Fed Preview: Be Quick, but Don’t Hurry
How rapidly should the Fed cut rates?
The Fed Should Go Big Now. I Think It Will.
The US Federal Reserve faces a crucial decision at its policy-making meeting this week: Ease off slightly on monetary restraint with a 25-basis-point interest-rate cut, or go for a rare 50-basis-point cut to fend off a recession.
What’s Hot: Nvidia Earnings, What’s Not: Investor Reactions
Nvidia’s strong earnings exceeded expectations, but the stock fell as investors recalibrated their expectations given its high valuation.
Is AI Slowing Down the Energy Transition?
As AI's usage becomes increasingly widespread around the globe, energy consumption is soaring, along with a demand for additional power.
Overture on Election Issues
The next U.S. president will face immediate fiscal challenges.
Technological Advances Make Things Better – Or Does It?
While technology is a powerful driver of economic growth, it also presents challenges that can negatively impact productivity, equality, mental health, and societal cohesion. Addressing these issues ensures that technological advancements promote sustainable and inclusive economic growth.
The New Emerging Markets
In emerging markets, technological advancements present a unique opportunity to empower underserved communities.
Why Should You Care When Stocks Plunge?
The safest way to ensure retirement security is to match, on a year-by-year basis, future spending needs with a reliable stream of inflation-adjusted income and maturing fixed-income assets. As we’ve already seen, a conventional stock/bond portfolio may not cut that mustard.
Emphasize Consistency to Navigate Volatility
An analysis of the leadership reversal and market sell-off observed in recent weeks and why an emphasis on equities with consistent fundamentals is justified.
The Time Has Come
We are entering a time I think will include a deep crisis. We are going to need each other. We really do need to “find our tribe.”
Japanese Style Policies And The Future Of America
In a recent discussion with Adam Taggart via Thoughtful Money, we quickly touched on the similarities between the U.S. and Japanese monetary policies around the 11-minute mark. However, that discussion warrants a deeper dive. As we will review, Japan has much to tell us about the future of the U.S. economically.
Fed Rate Cuts Give Higher Probability of the Great Rotation Occurring
Despite pullbacks and elevated volatility in the earlier days of the month, major equity indices were up in August.
Navigating the Investment Landscape: Insights and Warnings
In this edition, Harold Evensky explores the challenges facing sustainable and active funds, the implications of the new DOL Fiduciary Rule, and the value of long-term performance projections. With candid observations and critical analysis--read on to gain perspective on navigating the complex world of investing, the importance of risk management, and the role of fiduciary advisors in securing your financial future.
Key Highlights From Q2 Earnings Season Around the Globe
On the latest edition of Market Week in Review, Director and Senior Investment Strategist Alex Cousley and ESG and Active Ownership Analyst Zoe Warganz discussed key takeaways from the U.S. Federal Reserve’s (Fed) annual economic symposium in Jackson Hole, Wyoming.
S&P Global US Manufacturing PMI™: Lowest Level of 2024
The August S&P Global US Manufacturing PMI™ fell to 47.9 in August from 49.6 in July, indicating a modest deterioration in business conditions for a second straight month. The latest reading was just below the forecasted reading of 48.0 and is the index's lowest level of the year.
Why Gold Stocks Could Be a Contrarian Investor’s Dream Right Now
As I write this, gold continues to trade above $2,500 an ounce after surging past the psychologically important level for the first time ever in mid-August. For seasoned gold mining investors, this should be a moment of validation. After all, the yellow metal has long been seen as the ultimate hedge against economic uncertainty.
China's Growth Evolution: Opportunities and Challenges for the Global Economy
China's economic transformation presents both challenges and opportunities for global markets.
The Fed Is No Longer the Only Game in Town
Last week’s meeting of central bankers in Jackson Hole was a kind of victory lap for the Fed. It may have also marked the peak of its power.
Yield Curve Shifts Offer Signals for Stockholders
The level of U.S. Treasury yields and the changing shape of the Treasury yield curve provide investors with critical feedback regarding the market’s expectations for economic growth, inflation, and monetary policy
AI, Natural Gas & Midstream’s Emerging Opportunities
Midstream’s second quarter earnings calls reinforced the positive outlook for US natural gas demand driven in part by expected power demand from data centers. This note discusses the advantages of natural gas for data centers, additional factors contributing to demand growth, and how midstream is uniquely positioned to benefit from these trends.
How Price Controls Could Harm the U.S. Economy Under a President Harris
This week, before she accepted the Democratic Party’s nomination for president, Vice President Kamala Harris threw her support behind President Joe Biden’s tax proposals for 2025, which include a steep 44.6% capital gains rate and an unprecedented 25% tax on unrealized gains.
Powell Says ‘Time Has Come’ for Fed to Cut Interest Rates
Chair Jerome Powell said the time has come for the Federal Reserve to cut its key policy rate, affirming expectations that officials will begin lowering borrowing costs next month and making clear his intention to prevent further cooling in the labor market.
Tactical Rules Turn Bullish
Since our last update of the Three Tactical Rules on June 25, 2024, equity markets have retraced most of the rally from the spring. The change in market sentiment came abruptly, due to the labor market showing signs of weakness as the number of jobs available per unemployed worker fell to 1.2 and the unemployment rate rose to 4.3%. The recent market volatility has had a dramatic impact on our tactical rules.
Nvidia Eyes Return to Record as AI Spending Bonanza Continues
With questions swirling around Federal Reserve policy, the state of the economy and the US presidential race, at least one thing seems clear on Wall Street: spending on artificial intelligence remains a central priority.
In an AI Arms Race, Investors Should Focus on Profit Potential
As the AI halo begins to fade, equity investors are seeking companies that can profit from—and not just pontificate about—artificial intelligence.
A Rebuttal to an Energy Transition “Realist”
Ethical Capital's Sloane Ortel marshals the data to counter the arguments against aggressively fighting climate change laid out in Larry Siegel's recent article.
The Stakes Are High for Powell and the Fed at Jackson Hole
This year’s presentation by Chair Jerome Powell is eagerly awaited due to the economic fluidity and financial volatility that the US has been experiencing, and its spillovers to the rest of the world.
A Script for Jackson Hole
Powell will hint at normalizing monetary policy, but at a measured pace.
BlackRock Says Blended Finance at ‘Turning Point’ as Deals Grow
BlackRock Inc. says the market for blended finance has now reached a “turning point,” as it targets growth in deals that combine private and public funding.
Five Big Questions for the Fed at Jackson Hole
When US Federal Reserve Chair Jerome Powell speaks at next week’s annual economic conference in Jackson Hole, Wyoming, people will be listening intently for any hint about what the central bank will do with interest rates at its September policy making meeting.
Alphabet Shares Face Months of Uncertainty on New Breakup Risk
Alphabet Inc. investors are facing a long period of uncertainty as they grapple with a scenario they previously saw as unlikely: a possible breakup of Google.
NAHB Housing Market Index: Builder Confidence Hits Lowest Level of the Year
Builder confidence fell further in August as a lack of affordability and buyer hesitation continue to slow down the market. The National Association of Home Builders (NAHB) Housing Market Index (HMI) dropped to 39 this month, its lowest level of the year. The latest reading came was below the forecast of 43.
The Market May Be Too Aggressive on Fed Rate Cuts
The inflation numbers this week — both for producer and consumer prices — have served to reassure markets in two distinct ways: confirming continued progress in the battle against high price increases and supporting the ongoing shift in the Federal Reserve’s focus from its inflation mandate to its employment mandate.
Disruptive Theme of the Week: Playing Defense
It's a good time to revisit which equity market sectors are defensive themes. Certain products are nondiscretionary we can't live without.
US Considers a Rare Antitrust Move: Breaking Up Google
A bid to break up Alphabet Inc.’s Google is one of the options being considered by the Justice Department after a landmark court ruling found that the company monopolized the online search market, according to people with knowledge of the deliberations.
Diversify Your Income Portfolio Without Sacrificing Yields
The KraneShares Sustainable Ultra Short Duration Index ETF (KCSH) offers low risk income investing with notable yields and diversification.
Jensen Investment Management Launches the Jensen Quality Growth ETF
The Jensen Quality Growth ETF is a high-conviction U.S. large-cap ETF with a growth tilt. The ETF’s investment approach is rooted in bottom-up fundamental analysis, focusing on quality companies that have demonstrated consistent performance and resilience over time.
The Comeback Kids
Everybody loves a good comeback story: Seabiscuit. The Mighty Ducks. 493 stocks in the S&P 500 index.
Lessons from Equity Investing with a Very Long Lens on Growth
Four interlinked principles form a compelling investment philosophy for uncovering promising growth companies.
The Windshield Is Bigger Than the Rearview Mirror for a Reason
The early August sell-off could represent just the market taking a breather after seven months of fantastic returns and could be right back on track, albeit with additional volatility.
Classic Rewind: How RIA Prospecting Tactics From the Past Are Making a Comeback
Savvy advisors that blend classic prospecting methods with modern tech are not only reviving successful strategies from the past but are also setting the stage for sustainable future growth.
Stubborn
Andy Rothman provides four reasons why he’s stubbornly convinced that Xi Jinping will eventually overcome his stubbornness and make the changes necessary to put China back on track to reach its potential growth rate.
The Sahm Rule, Employment, And Recession Indicators
Economist Claudia Sahm developed the “Sahm Rule,” which states that the economy is in recession when the unemployment rate’s three-month average is a half percentage point above its 12-month low.
Assessing Culture in the Evaluation of Investment Strategies
While strategy provides direction, a strong culture is the foundation that supports and sustains an organization’s success. Culture influences every aspect of an organization and defines the purpose and values that guide the actions of employees.
AI Is Getting Cheaper. That Won’t Fix Everything
For a technology that promises to help businesses cut costs, artificial intelligence has had a big problem with being so costly.
Fed Signals Rate Cuts Could Begin in September
On the latest edition of Market Week in Review, Investment Strategist BeiChen Lin and ESG and Active Ownership Analyst Zoe Warganz discussed key takeaways from recent central bank meetings. They also provided an update on how U.S. small cap companies are performing during second-quarter earnings season.
Where Strategists See Market Opportunities in Second Half
A recent mid-year strategist pulse check from Natixis revealed where strategists believe the top opportunities exist across markets.
A Straight Man and a Funnyman Explain the World Economy
De Leus and Gijsels, both originating in the world of institutional brokerage identify the five principal trends affecting investments in the near future. The two take turns writing chapters so that the book is a straight man/funnyman show, with the straight man providing mostly sound, conventional analysis and the funnyman interviewing dead economists and Fed chairmen not yet born.
An Emergency Fed Rate Cut Would Be A Mistake
With stock markets plunging around the world, traders are talking up the prospect of an emergency interest-rate cut from the Federal Reserve after the US central bank passed up the opportunity to ease policy last week. Not only is this highly unlikely, it would be counterproductive.
Diving Into Concentrated Active Large Cap ETFs
Advisors and investors that want to try to outperform can still gain some diversification benefits using concentrated ETFs.
Fed Sets Stage for Rate Cuts Amid Growing Confidence on Inflation
The central bank’s latest policy statement and Chair Jerome Powell’s remarks suggest that an initial interest rate cut could come as soon as September.
Index Investing as an Active Decision: Implications for Equity Investors
Today’s passive index investing requires active choices, as customization and innovations in index funds have resulted in new considerations for investors and the potential for greater control.
U.S. Treasuries and the Fiscal Situation
Reasonable Treasury debt ratios and more than enough buyers put Treasuries in a much better light than is commonly heard.
The Good and Evil Angels and Powell’s Shoulders
Macro drivers mixed with market narratives last week to sustain the volatility cocktail being served in July
Will Investors Get Good AI News This Week? Don’t Bet on It
Unfortunately, investors have little else to work with given the table scraps of useful data being offered by the tech giants. None of the top companies have yet adequately spelled out the financial performance of AI adoption on their income statements.
Multi-Asset Mid-Year Outlook Global Growth Picture Supports Risk Assets
Improving inflation and growth scenarios should enhance the equities and bond dynamic for multi-asset investors.
How 2024’S Election Could Reshape Your Portfolio
President Joe Biden’s withdrawal and endorsement of Vice President Kamala Harris has sent shockwaves through the political establishment, and while former President Donald Trump remains the frontrunner, the wind has certainly shifted in Harris’s favor.
The Bull Market – Could It Just Be Getting Started?
Yes, the market could continue to rotate massively from large-cap to small and mid-capitalization companies. However, given the current levels of bullish sentiment and allocations against a backdrop of weakening economic data and widening spreads, this suggests the current rotation may be nothing more than a significant short-covering rally.
A Sticky Last Mile
Progress toward a goal usually isn’t linear. The first 50% isn’t too bad, the next 40% is harder, and the last 10% consumes most of the effort and resources. Business strategists call this the “last mile” problem… and it applies to inflation, too.
Q2 2024 Active Management Review: Momentum Keeps Rolling
The Momentum factor picked up where it left off at the end of the first quarter, turning in another standout performance in the April-through-June timeframe and ending the second quarter as the factor most relevant to positive performance.
The U.S. Small Cap Rally Has Been Fast and Furious. But Is It Here to Stay?
The small cap rally has primarily been a de-risking event. It's unclear at this point whether it’s just a blip or the beginning of a new trend in market leadership.
U.S. ETF Flows: Investors Are Getting Polarized
It's been another strong first half for the U.S. ETF industry, with overall flows set to challenge or surpass historic records.
Four Ways to Manage Taxes as Loss-Harvesting Opportunities Fade
For taxable investors, an appreciating portfolio can be a mixed blessing. But regular loss harvesting isn’t the only way to reduce your portfolio’s tax bill, especially as its value rises. We share some important tax-management techniques for the future.
Navigating the Markets: Insights From Our Q2 Economic and Market Review
The momentum we've seen in U.S. equity markets over the past year continued in the second quarter of 2024. With large technology stocks leading the wave, the S&P 500 index has risen 23% in the 12 months ended June 30.