Inflation trends are moving in a favorable direction, but the change is likely too slow for the Fed to take its foot off the brake anytime soon.

Weaker economic trends will likely form heading into 2023 as the Fed battles inflation, but a (hopefully) mild recession may help set stocks up for a better second half of the year.

U.S. stocks posted its biggest daily gain since 2020 following data on October’s consumer price inflation (CPI), which came in cooler-than-expected.

Much attention has been paid to the elevated risk (and announcement) of a recession, but investors should instead focus on signals coming from leading economic indicators.

The August jobs report delivered something for both economic bulls and bears, but what matters more in the near term is the Fed's focus on seeing a continued easing in labor demand.

Second-quarter earnings growth will mark an expected deceleration in profits, but focus will likely continue to shift to the pace at which outlooks are downgraded.

The June jobs report was cheered by economic bulls given its strength in level terms, but rates of change among leading indicators don't favor a soft-landing outcome for the economy.

Rising inflation, rate hikes, supply-chain problems and the Russia-Ukraine war have contributed to growing recession fears.

Sharp, countertrend rallies may continue this year, but aggressive Fed policy, the turning of the liquidity tide, and slower economic growth will likely keep pressure on stocks.

Charles Schwab May 2022 Market Snapshot with Liz Ann Sonders. 

As expected, the Federal Open Market Committee (FOMC) raised the fed funds rate by 50 basis points, to a range of 0.75% to 1.0%.

It was quite a month.

Recession chatter has picked up increasingly for numerous reasons, not least being the spike in oil prices, slowdown in economic growth estimates, and the Fed's transition from accommodative to tighter monetary policy.

There is no shortage of headwinds facing both the market and the economy: the tragic Russian invasion of Ukraine and attendant commodity/energy crisis; the Federal Reserve's transition from accommodative to tighter monetary policy; and increased chatter of a recession on the horizon; among others.

The Russian invasion of Ukraine overturned a lot of assumptions about the near-term direction of the global economy.

The war between Russia and Ukraine—and subsequent economic and financial ripple effects—has exacerbated stress in global markets and ushered in an acute risk-off environment.

In recent weeks, it has felt like the U.S. stock market slips a gear every so often, dropping sharply as investors search for traction in uncertain terrain.

After “whisper” estimates for the December jobs report, out last Friday, had plunged well into negative territory, payrolls instead jumped by 467k—well above the official consensus of only 125k, and close to twice the highest Bloomberg estimate.

The Federal Open Market Committee (FOMC) of the Federal Reserve did not make any formal changes to its policy, but did signal it would begin raising the fed funds rate soon.

“Jobs day” last Friday was a bit of a dud.

Some of the market’s recent pressures are showing signs of easing.

The FOMC upped the pace of tapering—now expected to conclude by March—with three rate hikes expected in 2022 per its “dot plot.”

Investor sentiment is one key to shorter-term market swings; with euphoria preceding September’s and late-November’s pullbacks; but better conditions in place … for now.

Bear with us as (no pun intended) you read this longer-than-usual outlook!

With less than two months left in what has been an extraordinary (and mystifying) year on multiple fronts, stocks have maintained a largely uninterrupted trek higher (at the index level) in the face of myriad headwinds...

Liz Ann Sonders shares her perspective on the U.S. stock market and economy in this monthly Market Snapshot video.

The Federal Open Market Committee (FOMC) announced the start of balance sheet tapering at a pace of $15 billion per month ($10 billion of Treasuries and $5 billion of mortgage-backed securities). They made no change to the fed funds rate, which remains near the zero bound.

Earnings season has been stellar so far, although the growth rate is well off its prior quarter peak, with profit margins in focus looking ahead.

The speculative exuberance around special purpose acquisition companies (SPACs) seems to be over, but investors still have questions about them.

The age of abundance has given way to an age of scarcity, while the pro-cyclical version of inflation may have given way to the counter-cyclical version.

September closed with a whimper (from folks hoping the seven-month stretch of positive performance months for the S&P 500 would make it to eight). The month also held true to the history of September being the worst month for performance on average since the index’s inception in 1928.

It was 35 years ago this month that I began my career on Wall Street. In thinking about those three-and-a-half decades, I decided to shift tack with today’s report and ask readers to indulge me as I ruminate about what I’ve learned during these decades.

Over the past 70 years, rising government debt generally has been accompanied by weaker economic activity. But it’s not a simple relationship.

Special purpose acquisition companies (SPACs)—also known as blank-check companies—have gained immense popularity among investors since the beginning of 2020, despite being around for decades.

The stock market could use some mouthwash.

As expected, in a unanimous vote, the Federal Open Market Committee (FOMC) of the Federal Reserve (Fed) kept the fed funds rate unchanged in its range of 0-0.25%.

In what shaped up to be a very impressive first half of the year for both the economy and stock market, stellar earnings growth has been a key ingredient.

There is always a lot of controversy around the implications of high and rising government debt. Over the past 70 years, rising government debt has generally been accompanied by weaker economic activity.

The Fed made no changes to its interest rate or balance sheet policies; but some of the language in its statement was tweaked, reflecting recent hotter inflation data.

To get the facts, sometimes you need to look beneath the surface.

Second quarter is likely the peak growth rate for both the economy and corporate earnings; with positive economic surprises waning.

Is the stock market disconnected from the economy?

A boom in spending has stirred fears of economic overheating, which has coincided with a surge in commodity prices and a lift in traditional inflation metrics.

Special purpose acquisition companies (SPACs)—also known as blank-check companies—have gained immense popularity among investors since the beginning of 2020, despite being around for decades.

Economic and earnings data are in boom territory, with more momentum likely near-term.

Although it’s early in the first quarter earnings reporting season, it’s worth a look at the progress so far and the implications for the rest of the season, as well as valuations.

As Shakespeare might put it, “full of sound and fury, signifying nothing” is perhaps an apt way to describe the character of the market so far this year.

I am often asked by investors why we do not have formal tactical views on growth vs. value like we do on large caps vs. small caps.

U.S. economic growth is accelerating as vaccinations rise and social-distancing measures ease, but hopes for a long-lasting spending boom may hit a couple of speed bumps. Vaccine rollouts in major countries are proceeding at different speeds, but stock market performance contradicts what vaccination data would seem to imply for investors. Meanwhile, inflation-adjusted longer-term Treasury yields have risen as investors anticipate stronger economic growth.

Is the stock market disconnected from the economy? Perhaps, but less so lately.