Markets have been very positive this week on better-than-expected inflation numbers. The Consumer Price Index (CPI) printed a better than expected 0.1% in March with the year-over-year rate declining to 5.0% compared to a 6.0% year-over-year rate reported in February of this year.
Recession odds have climbed considerably since Jerome Powell’s testimony before Congress and the latest FOMC meeting. However, the recent failures of Silicon Valley Bank (SVB) and Credit Suisse (CS), as higher rates impact regional bank liquidity, also added to the risks.
The dollar's strengths still outweigh its weaknesses.
Spotting trend changes is the key to economic forecasting. They don’t happen often. Most of the time, this year will be similar to last year. The pace varies but the overall trend continues… until it doesn’t.
It’s believed that to meet this goal, two out of every three passenger vehicles manufactured in the U.S. would need to be electric models.
What does a potential change in Federal Reserve policy mean for markets and the economy?
This much is clear from Tesla Inc.’s fifth price cut this year: Elon Musk is dead set on seizing much more of America’s SUV market.
Yesterday’s CPI report showed that inflation continues to slow to 5% on an annualized basis. That is a lot better than it was last year. We should be happy about this.
Just as it is getting ever-more important to anticipate changes in Fed policy, those changes are becoming more uncertain. One way to help resolve this dilemma is by explicitly incorporating political and public policy goals into the monetary policy calculus.
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates and inflation.
2023 has already been an eventful year, featuring a banking crisis and more Fed rate hikes. In our view, this is not a “set it and forget it” type of market – investors need to stay vigilant.
After the market selloff in 2022—a period that was particularly hard on growth stocks—we think our companies are attractively priced for the next five years, which is our baseline investment horizon.
Despite recent headwinds, structural drivers underpinning China’s growth remain intact. Sectors that will benefit from the structural trends include healthcare, industrial automation, and domestic brands targeting increased spending by Chinese consumers.
The Fed’s concern about U.S. banks dominated last month’s FOMC meeting. According to today’s release of the March 21-22 meeting minutes, the Fed was apparently so concerned over banking problems and the potential for an ensuing credit crunch that officials tempered calls for rate hikes...
Given market uncertainty and the risk of a US recession, is now the time for defensive stocks? Making a case for low-volatility, high-dividend equities with Franklin Templeton Investment Solutions’ Vaneet Chadha and Michael LaBella.
The lack of diversification benefits of government bonds in 2022 was painful for multi-asset investors. The sell-off in US Treasuries in particular was sharp, and we saw correlations versus stocks move well into positive territory.
March inflation data may put the Federal Reserve close to its terminal policy rate this cycle, if it hasn’t already reached it.
The stakes are high, and it appears likely that our deeply divided government is headed for another debt-ceiling showdown. Divided governments have typically been good for the markets; however, they often spell trouble when it comes to negotiating fiscal matters.
Although central banks may be near the end of the rate hike cycle, short-duration stocks may still be an attractive investment theme should interest rates remain at higher levels.
The Federal Reserve Board reduced banking reserve requirements to zero in March 2020. So banks in the United States are technically not required to back customers' deposits with anything.
During his spring break, Johnson Financial Group Portfolio Manager Brian Schaefer had the time to read “A Gentleman in Moscow,” which got him thinking about the how the current market moves could impact the American experiment. In this investment commentary, Schaefer discusses the MOVE and VIX indexes and what they might say about the markets.
Tax-managed investing has gained in popularity in recent years. But what exactly is a tax-managed mutual fund? We do a deep dive into the concept.
Born of the Global Financial Crisis, additional tier-1 securities were designed to absorb bank losses in times of turbulence and maintain financial safety at no cost to taxpayers. Despite good intentions, we’ve found AT1s to be flawed instruments that are contingently junior to common equity in practice.
What must happen to make these stocks attractive to investors like us?
I have been getting a lot of questions around the dollar in recent weeks. De-dollarization seems to be a thing, as do central bank digital currencies, along with the latest round of worries about what the government is going to do to our savings.
Why finding ways to break the tie to these variables is so important, and outline a few ideas for how to do it.
Trading might be muted today as the market pivots, awaiting earnings and inflation data this week.
Doug Drabik discusses fixed income market conditions and offers insight for bond investors.
We think dividend-income strategies can be effective across multiple environments, provided that they’re designed to tap into a wider opportunity set beyond traditional dividend payers alone.
As central banks wrestle with how to respond to volatile economic data and banking turmoil, while also fighting inflation, Franklin Templeton’s economists provided their perspectives on what’s next for economic growth, interest rates, inflation and fixed income markets.
Lost in the Good Friday holiday and the jobs report was the weekly report on bank lending, deposits and securities holdings. Keeping in mind this data is always a week old, it shows the retreat from banks continues.
History is full of economic and societal collapses. The Incan and Roman societies disappeared, the Ottoman Empire fell apart, the United Kingdom saw the pound lose its reserve currency status. So, anyone who says the US, and the dollar, couldn’t face the same fate doesn’t pay attention to history.
The market bottomed last October despite ongoing concerns about inflation, higher rates, recessionary risks, and a banking crisis. While the media headlines and youtube podcasts are filled with “crisis” headlines, as noted in “Analysts Raise Estimates,” expectations for growth and earnings are rising.
The case for a central bank digital currency has many shortcomings.
Central banks accumulated gold at the fastest pace on record in the first two months of 2023. In January and February, central banks collectively bought a net 125 tonnes of the metal, the highest amount for the year-to-date period since banks became net buyers in 2010.
Volatility can be challenging but it also creates opportunities. In our view, rotating across sectors within the investment grade market is the most effective way to take advantage of price fluctuations and generate alpha.
Fifteen years ago, in 2008, the Federal Reserve started an experiment in monetary policy, switching from a “scarce reserve” system to one based on “abundant reserves.” This switch has created massive problems that are hitting not just the private banking system but the Fed itself.
There is a lot riding on the monthly jobs report, which comes out tomorrow. For the economy, more jobs are good: more workers, more wage income, more spending ability, and so forth. There’s no real downside.
“Thinking the Unthinkable.” What does that phrase bring to mind? To me it suggests a situation that has become so stressed you are forced to consider undesirable solutions.
Rick Rieder and team argue that a major shift in market perception of growth, inflation and policy trajectories means investors should consider calling a "time-out" to reassess portfolios.
Implications of the ongoing volatility in the banking sector, and what it means for markets in Europe and globally—check out highlights from our most recent discussion with Kim Catechis, Investment Strategist, Franklin Templeton Institute.
Everyone knows it by now: 2022 was not a kind year for investors, particularly balanced fund investors. There were no silver linings, no shelter from the storm; it seemed that no matter what levers you had in place to protect clients’ wealth, there was very little to cheer about on investor return statements.
In the face of banking stress and a hawkish Federal Reserve, stocks have advanced impressively so far this year, but narrow breadth doesn't bode well for continued strength.
Senior Fixed Income Analyst Bedford Lydon shares three factors that may affect states' creditworthiness in a downturn.
Inflation regimes often coincide with changing political regimes and agendas, much of which stems from the rise of populism and fiscal dominance. As a result of decades of globalisation and rising wealth inequality, we may well be entering a new regime - one of higher inflation and higher inflation volatility.
After a weak February, markets rallied in March. U.S. markets were up by low single digits, while bond markets were in the same range. International markets also showed modest gains, with developed markets about the same as the U.S. and emerging markets doing slightly better.
Emerging Markets (EM) have faced a challenging environment over the past five years, due to a series of global shocks that have triggered elevated market volatility and led the MSCI EM equity benchmark to experience its most protracted drawdown in history.
Many advisors today are helping clients with a broad range of their financial planning needs.
Money market funds are attracting deposits for more reasons than just SVB.
