High interest rates – the condition investors have had to contend with for over two years now – can be a drag on dividend stocks and ETFs.
Hastily, investors have turned their worry about inflation into worry about a recession. The catalyst was Friday’s unexpectedly disappointing unemployment number.
Recent developments in the labor market triggered the Sahm Rule, an economic indicator known for predicting the onset of recessions. Developed by economist Claudia Sahm, it signals a recession when the 3-month average of the unemployment rate rises by at least 0.5 percentage points above its low from the previous 12 months.
Portfolio Managers Shuntaro Takeuchi, Michael Oh, CFA, and Andrew Mattock, CFA, assess the reasons for the heightened volatility and sharp moves in global markets.
The US Federal Reserve appears to have finally brought about the recession that it engineers whenever unemployment is low and the president is a Democrat. If it costs the party the White House in November, may its leaders use their time out of power to reflect on the unwisdom of their decades-old bargain with Wall Street.
Copper prices have pulled back since peaking in May at $5.12, but the long-term bull case for copper remains strong.
Until recently, the prevailing market narrative since October was that the Fed was in a "pivot" to eventual rate cuts.
As the late George HW Bush once said, “What is it about August?”
For bond investors looking to the near- and longer-term, Matt Eagan stepped through considerations and opportunities in the global market.
Friday’s jobs report has put a damper on economic sentiment for the moment. But much hype has been made about the so-called “Great Rotation.”
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.
Pullbacks are normal, but every time is scary. And every time we need to pay attention. But in the end, although there are real risks out there, right now everything is still fairly normal, in our view. We will be keeping an eye on things, but the best course of action remains simply this: keep calm and carry on.
One of the very popular technology companies in recent years has been CrowdStrike, Inc. It provides cybersecurity to numerous major technology companies including the top Artificial Intelligence (AI) players.
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.
North American trade is booming, but gains have been uneven.
A negative market reaction was triggered by a sharp selloff in Japanese stocks into the close earlier [Monday], with the Topix and Nikkei indices suffering 12% declines – their worst day since 1987. The selloff cascaded through global markets with the EuroStoxx 600 trading down over 3% on Monday and S&P 500 down about 3%.
The Federal Reserve is being challenged with one of our most important tenets: levels versus momentum.
Take the market narrative with a grain of salt and look at the fundamentals in determining your outlook for the economy and financial markets. We ultimately believe this soft patch of data will prove to a be a ‘growth scare,’ not a ‘recession reality.’
Rotation - The Earth's axis has an inclination of 23.5 degrees relative to its orbital plane around the sun.
The softening trends in both inflation and labor data are sending a message that monetary policy is too restrictive.
During each speculative run-up in asset prices – whether the dot-com bubble, the housing bubble, or more recently the rapid rise (and fall) of the stocks of electric vehicle companies – there’s typically a moment when Wall Street strategists, analysts, and investors go all-in on that theme.
Semiconductor stocks remain the leaders of this market, but investors might admit it looks pretty extended at the moment.
Recent macroeconomic and geopolitical developments, along with shifting AI sentiment, have raised concerns over whether strong headline returns, low volatility, and persistent mega cap tech leadership can continue as we look ahead.
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.
The relative weakness in July’s nonfarm payroll employment number and the increase in the rate of unemployment from 4.1% in June to 4.3% in July, triggering the Sahm Rule is a reminder of the difficult tasks ahead for the Federal Reserve.
The strong currency is neither a blessing nor a curse.
Never before in my history studying the Federal Reserve (Fed) has the Fed’s policy come into question immediately following the Fed decision.
As Milton Friedman taught us many decades ago, monetary policy works with long and variable lags. Recent economic reports suggest that the long and variable lags on the tightening of monetary policy in 2022-23 are starting to come to an end.
A recent mid-year strategist pulse check from Natixis revealed where strategists believe the top opportunities exist across markets.
Economic indicators are released every week to provide insight into the overall health and performance of an economy.
In bullish years, markets often have corrections. Yet, after a lengthy bullish run, it always surprises me how quickly investors and the media panic with the slightest hint of a market pullback.
The Federal Reserve is between the Rock of Gibraltar and the Rocky Mountains. The data they use to explain their policy choices is in apparent transition. A self-aware analyst, seeing the conflicting data, knows that the right policy choice will only be understood in hindsight.
Treasury yields plunged below 4% this week for the first time since January on recession fears as global manufacturing activity contracted and hiring in the U.S. slowed dramatically in July.
When growth slows and rates fall, what will happen to an asset class with long-dated cash flows that are not very economically sensitive? Well, it is likely to strongly outperform. Ergo the short-term outlook for growth relative to value/small caps appear to be rosy.
On July 31, the U.S. Treasury released its most recent Quarterly Refunding Announcement which revealed its financing strategy, presenting both positive and restrictive elements for global liquidity.
The secrets for a blueprint for young investors are: Start young. Be disciplined, do it regularly. Focus on what your needs are and what your goals are.
The members of the Bank of England’s Monetary Policy Committee (MPC) are probably not intimately familiar with Taylor Swift’s back catalogue. If they were, Swift’s hit “Cruel Summer” may have been ringing in their ears when cutting rates today for the first time since March 2020.
Once again, the Fed kept rates unchanged at the July FOMC meeting. As a result, the Fed Funds trading range remains in the 5.25%–5.50% band that was introduced exactly a year ago and still resides at a more than 20-year high watermark.
Advisors and investors that want to try to outperform can still gain some diversification benefits using concentrated ETFs.
While election news dominated July's headlines, small-cap stocks had their best monthly performance relative to large-cap stocks since December 2000.
We have been talking about resiliency-driven inflation for the past several weeks. As the US and its Western allies realign supply chains to strengthen economic resiliency, the cost of certain goods and commodities will go up.
Some investors who had previously expressed devotion to the largest digital currency propelled it higher last month.
ETFs had a big July, with some leading strategies lifting their YTD inflow totals behind strong July numbers.
Like you, we have read countless comparisons between today’s enthusiasm for all things AI and the top of the TMT bubble in 2000, with the implication being that stocks are on thin ice.
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.
The Federal Reserve noted that inflation is moving closer to its 2% target after electing to hold rates steady at its July FOMC meeting.
The Northern Trust Economics team shares its outlook for growth, inflation and interest rates in major markets.
Coming into this earnings season, one of the most intriguing questions was how well the consumer-facing companies would be able to maintain their pricing power. The new algorithm for success is a bit more complicated than “raise prices by x.”
In this article, Russ Koesterich discusses factors behind gold’s impressive performance year to date.
The Federal Reserve kept its policy rate unchanged at the July meeting, but left the door open to rate cuts later this year.
