The market faces unprecedented headwinds as the debt-ceiling crisis looms large. Investors can look into defensive strategies that can potentially navigate the choppy waters of the current and projected market environment. Quality, low volatility, and dividend yields are all factors that can help position a portfolio to weather even the toughest of storms. Join the experts at Invesco and VettaFi for an important webcast discussing strategies that incorporate defensive factors.
Topics will include:
Interest rate volatility and inflationary pressures have continued to challenge income seeking investors. Rates may have topped out and where we’ll go from here remains to be seen. That’s why it’s important to understand where income opportunities may lie in our current markets while planning for the future. In this upcoming webcast you’ll hear from a fellow advisor who’s navigating these challenges for his clients, as well as from a fund manager that’ll outline factors to consider when evaluating income-focused investments.We invite you to join the experts at NEOS Investments and VettaFi as they highlight tax-efficient monthly income strategies across core portfolio exposures that may offer a compelling addition or alternative to current client allocations.
The punditry knows that clients dread uncertainty. They count on it. They prey on it.
The Fed’s refusal to pause rates through the first five months of 2023 raises the odds of a hard landing. The magnitude of the yield-curve inversion has increased the risk inherent in the US banking and financial systems. The impending recession is unnecessary and self-inflicted.
The debt ceiling crisis has been averted—but this short-term relief might come at the cost of greater future peril. Franklin Templeton Fixed Income CIO Sonal Desai analyzes the debt-ceiling resolution and delves into the potential longer-term risks that rising public debt poses to financial markets.
With stocks struggling to break out of their range, rates climbing, and valuations stretched investors are rightly asking whether it’s time to sell.
Andy Rothman provides a first-hand perspective from his first trip to Shanghai and Beijing since the start of COVID in 2019.
Transitioning into the post-COVID investment environment shifts the foundations of portfolio construction that investors relied on in recent decades. On full display in 2022, inflation and recession risk punished both bonds and stocks together to historic declines.
The first few years of the 2020s have seen a number of acute economic, financial, and geopolitical disruptions on a worldwide scale, and it will take time for the ultimate consequences of these shocks to be fully felt.
Despite market headwinds, investors remain bullish on real estate. As traditional sectors, like office and retail, continue to underperform, farmland presents an opportunity for investors seeking capital preservation and downside protection.
I've updated our monthly workforce analysis to include the latest employment report for May. The unemployment rate rose to 3.7% and the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 339K.
Global bonds are slumping after two shock interest-rate hikes this week served traders a reality check that central banks are far from done fighting inflation.
Let's take a close look at May's employment report numbers on Full and Part-Time Employment. The latest data shows that 83.6% of total employed workers are full-time (35+ hours) and 16.4% of total employed workers are part-time (<35 hours).
This morning's seasonally adjusted 261,000 initial claims was up 28,000 from the previous week's revised figure. The latest reading came in well above the forecast of 235,000. This is the highest level of initial jobless claims since October 2021.
Zehrid Osmani, Head of Global Long-Term Unconstrained at Martin Currie, discusses the recent positive earnings reports from large U.S. banks and explains why their firm has no plans to invest in the banking sector.
Investors have had a lot to contend with thus far in 2023. Moderating economic growth, persistent inflation, volatile interest rates, falling profits, stress in the banking sector, war in Ukraine, and the debt ceiling debate all combined to weigh on sentiment.
The emotionally overwhelmed brain cannot assimilate and act upon rational information.
The once-hot Wall Street trades of 2023 are all falling apart, in a fresh blow to market pros blindsided again and again ever since the pandemic broke out.
The U.S. international trade in goods and services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 1992 and details U.S. exports and imports of goods and services. In April, the trade deficit expanded by 23% to $74.60B. This is the largest gap the trade balance has seen in the last 6 months. The latest reading was smaller than the -$75.20B forecast.
We see the market’s focus returning to higher-for-longer rates and sticky inflation after a U.S. debt ceiling deal. We prefer an up-in-quality portfolio.
As of June 5, the price of regular and premium gas decreased by 3 cents and 2 cents, respectively, from the previous week. According to GasBuddy.com, California has the highest average price for regular at $4.79 and Mississippi has the cheapest at $2.93. The WTIC end-of-day spot price for crude oil closed at $72.15 and up 3.9% from last week.
Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $13,927 for an annualized real return of 6.64%.
Too many advisors jump into surge poorly prepared to deliver massive value to their clients. Here are five common mistakes and how to avoid them.
With the Q1 GDP second estimate and the May close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 156.4%, up from 151.8% the previous quarter.
Doug Drabik discusses fixed-income market conditions and offers insight for bond investors.
Portfolio Manager Alex Zarechnak identifies six key themes from the COVID years—some new, some familiar—to help anchor investors in today’s emerging markets.
Tony Davidow, Senior Alternative Investment Strategist with Franklin Templeton Institute, illustrates the potential impact of adding alternative investments to pursue growth and income—as well as seek to dampen volatility—during the accumulation and distribution phases of retirement.
The US debt ceiling negotiations brought considerable volatility to market prices.
The empirical evidence supports Seigel’s general assertion that stocks beat inflation in the long run. But the inflation-hedging benefits of stocks aren’t perfect.
Improved value proposition in credit.
History suggests that a soft landing might be difficult, as the U.S. has entered a recession following the last five periods when inflation peaked above 5%.
I will analyze the pros and cons of three funds to access the reinsurance market.
Structural changes in the world’s energy systems represent significant investment potential across an array of sectors. Analysts on our equity research team offer insights into the impact and opportunities.
Managing substantial wealth often requires specialized capabilities and expertise.
Given the challenges presented by today's market environment, private credit can be a valuable and versatile tool in sourcing incremental growth and income, dampening portfolio volatility, and hedging the corrosive impact of inflation. Read this paper for an in-depth look at the types of private credit, potential benefits and how to access them.
There is a general belief that there are four big indicators that the NBER Business Cycle Dating Committee weighs heavily in their cycle identification process. This commentary focuses on one of those indicators, nonfarm employment. May saw a 339,000 increase in total non-farm payrolls. The unemployment rate rose to 3.7%. The forecast was for 180,000 jobs gained.
The moving average for the light vehicle sales per capita series peaked in August 1978. Almost 45 years later, it is down 40.5% from that peak.
Choppiness in the equity market continues as investors look to see a debt limit deal approved.
David Dali, Head of Portfolio Strategy, provides his 12-month outlook for global equity markets.
Thoughts on the current US debt challenge and the long-term implications for markets and the economy from Stephen Dover, Head of Franklin Templeton Institute.
Nick Goetze discusses fixed-income market conditions and offers insight for bond investors.
As of May 31, 2023, the 10-year note was 312 basis points above its historic closing low of 0.52% reached on August 4, 2020.
The Federal Reserve’s higher interest rates, the work from home trend, ESG distractions, increases in crime, etc., are having far reaching effects on our economy and investors.
Inflation has proven sticky, even as growth weakens. Markets are realizing that policy rates are set to stay higher for longer. We like quality in stocks and bonds.
I received many emails and questions on “why” we are adding the U.S. Treasury bond to our portfolios. The question is understandable, given its dire performance in 2022, where bonds had the biggest drawdown since 1786.
The BEA's core Personal Consumption Expenditures (PCE) Price Index for April, released last Friday, shows that core inflation continues to be well above the Federal Reserve's 2% long-term target at 4.7%. The April core Consumer Price Index (CPI) release was higher, at 5.5%. The Fed is on record as using core PCE data as its primary inflation gauge.
The latest job openings and labor turnover summary (JOLTS) report showed that job openings rose unexpectedly to 10.103 million in April. This is the first monthly increase in job openings since December. The latest figure came in above the forecast of 9.775 million vacancies.
The concentration of gains up the cap spectrum isn't itself a precursor to weakness; it's the lack of participation from the "average stock" that warrants some caution.
Stock investors who planned for one thing in 2023 are getting something else entirely. Now, with the tech-obsessed market at risk of running away from them, the race is on to catch up.
A debt ceiling deal is within sight.
The stresses in the CRE market do not appear to pose a systemic threat to the global banking system.
A range-bound VIX between 20-35 has common markers and dynamics which signal a “crisis gateway” that deserves a defensive posture.
The Conference Board's Consumer Confidence Index ® slipped to 102.3 in May from April's upwardly revised reading of 103.7. This month's reading was better than expected, exceeding the 99.0 forecast. The latest figure is the index's lowest reading in the past six months.
Travel on all roads and streets increased in March. The 12-month moving average was up month-over-month by 0.1% and was up 0.3% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) was up 0.0% MoM and down 0.8% YoY.
In March, S&P Case-Shiller Home Price Index revealed seasonally adjusted home prices for the benchmark 20-city index saw a 0.5% increase month-over-month (MoM) and a 1.2% decrease year-over-year (YoY). After adjusting for inflation, the MoM was reduced to 0.0% and the YoY was reduced to -8.5%.
For this edition of Bull vs. Bear, Elle Caruso and Karrie Gordon discussed the pros and cons of investing in fossil fuels.
As other nations seek to become less dependent on the U.S. dollar, rumors of the greenback’s potential demise continue to swirl. Can the dollar remain king of the world’s reserve currency?
The financial markets are giving off mixed signals of late, and credit investors may wonder whether to be downbeat or optimistic.
If you were doubting whether the age of AI has arrived, NVIDIA’s stock performance this week may have given you second thoughts.
The Census Bureau has posted its advance report on new orders for durable goods for April. This series dates from 1992 and is not adjusted for either population growth or inflation. Let's review durable goods data with those two adjustments.
Personal income (excluding transfer receipts) rose 0.5% in April and is up 5.7% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) was up 0.2% month-over-month and 1.2% year-over-year.
With the release of this morning's report on April's personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.37% month-over-month change in disposable income comes to 0.00% when we adjust for inflation. The year-over-year metrics are 7.36% nominal and 2.87% real.
While we don't expect the U.S. government to default, the uncertainty may heighten market volatility in coming days. Here are answers to some of the questions we're hearing most often.
Rick Rieder and team argue that a series of small, but more probable, wins in fixed income can pave the way for portfolios to outperform benchmarks in 2023.
The semiconductor cycle is dead, long live the super cycle!
New orders for manufactured durable goods came in better than expected in April at $283.02B. This is a 1.1% increase from last month and higher than the expected 1.1% decline. The series is up 4.2% year-over-year (YoY). If we exclude transportation, "core" durable goods were down 0.2% from last month and down 0.2% from last year.
I’ve said it before, 2023 has been a heck of a year. In just five months, four large regional banks and one major global financial institution shuttered, marking the second-worst year for bank failures.
War, inflation, rising rates, banking chaos, and recession are among the challenges facing markets. Investors must balance these shorter-term risks with the long-term return prospects of equities.
As COVID-era funding boosts come to a close, US state and local governments are facing some challenges. However, they have many tools with which to tackle them, according to Jennifer Johnston, Franklin Templeton Fixed Income’s Director of Research, Municipal Bonds. She provides her latest outlook.
The two primary styles of dividend investing are growth and yield. In the latter, investors embrace stocks with what are deemed above-average yields — often from slower-growth sectors, such as utilities and real estate.
Investors should rely on the wisdom of crowds as expressed through bond yields, not credit rating agencies, to judge fixed-income credit risk.
The Chicago Fed National Activity Index (CFNAI) rose to +0.07 in April from -0.37 in March. All four broad categories of indicators used to construct the index increased from March, but two of the four categories made negative contributions in April. The index's three-month moving average, CFNAI-MA3, decreased to -0.22 in April from -0.12 in March.
In 2011, markets were relatively flat during the year before Congress and the White House (temporarily) buried the hatchet with the passage of the Budget Control Act on August 2, 2011.
AI’s arrival will have an increasingly large impact on our lives. That includes investing and, especially, other aspects of financial planning.
We prefer private to public credit long term on better return potential. It’s the mirror image in equity: We prefer public stocks as risks fade in the medium term.
The deadline for the #debtceiling is quickly approaching. Where does each side stand? What does each side have to lose? Will a deal get done despite the hardening of partisan lines? Check out what it all means for investors.
We must understand our clients’ purposes and how they fit together in their lives. We need to take the initiative when rebalancing is in order.
Bond-market titans BlackRock Inc., Pacific Investment Management Co. and Vanguard Group Inc. are warning that recent violent swings in US Treasuries are only the beginning of a new era of volatility that’s here to stay until central banks conquer inflation.
Some previously steadfast bears are showing signs of giving in after a seven-month advance put the S&P 500 on the edge of a key chart line.
Diversification is a cornerstone of thoughtful, long-term focused investing. Incorporating assets and asset classes that don’t always move in tandem – that is, their returns aren’t strongly correlated – can help temper stock and bond market risk.
Tax-loss harvesting is one of the direct indexing’s biggest benefits. The automation that direct indexing provides greatly increases the strategy’s potential benefits.
A member of Putnam's Fixed Income team since 2007, Onsel Gulbiten analyzes macroeconomic issues, including inflation, interest rates, and policy developments.
Banks and financial institutions are big issuers of preferred securities, so the recent banking industry volatility has had an impact. Our guidance on preferreds is unchanged but with some caveats.
Negotiations among lawmakers in Washington, D.C., to raise the debt ceiling might trend in a more favorable direction.
We propose a golf-inspired advisor assessment framework with a scorecard, fairway average and handicap as performance measures to quantitatively assess an advisors’ investment performance.
Risk-averse investors seeking defensive systematic strategies to reduce left-tail risk should broaden their search beyond low volatility/low beta.
What generally follows that expression is a succinct synopsis. We’re always trying to be concise; however, distilling complex economic and investment matters usually requires several pages.
Macroeconomic uncertainty presents new challenges for investors who are saving for long-term goals like retirement. Inflation can diminish the ability to save today and the value of those savings tomorrow.
Could massive monetary support have softened the deep bear market many expected? It is an interesting question. Particularly given the Fed has hiked rates at one of the most aggressive paces in history.
Factor investing has seen increased popularity in the US. Investors may also want to consider increasing their opportunity set by considering factors abroad.
Buffer ETFs
As Market Uncertainty Looms, Think Defensively
The market faces unprecedented headwinds as the debt-ceiling crisis looms large. Investors can look into defensive strategies that can potentially navigate the choppy waters of the current and projected market environment. Quality, low volatility, and dividend yields are all factors that can help position a portfolio to weather even the toughest of storms. Join the experts at Invesco and VettaFi for an important webcast discussing strategies that incorporate defensive factors.
Topics will include:
Monthly Income Generation in Today’s Volatile Markets
Interest rate volatility and inflationary pressures have continued to challenge income seeking investors. Rates may have topped out and where we’ll go from here remains to be seen. That’s why it’s important to understand where income opportunities may lie in our current markets while planning for the future. In this upcoming webcast you’ll hear from a fellow advisor who’s navigating these challenges for his clients, as well as from a fund manager that’ll outline factors to consider when evaluating income-focused investments.We invite you to join the experts at NEOS Investments and VettaFi as they highlight tax-efficient monthly income strategies across core portfolio exposures that may offer a compelling addition or alternative to current client allocations.
What Not to Do When Clients Freak Out
The punditry knows that clients dread uncertainty. They count on it. They prey on it.
Odds of a Hard Landing Are Increasing
The Fed’s refusal to pause rates through the first five months of 2023 raises the odds of a hard landing. The magnitude of the yield-curve inversion has increased the risk inherent in the US banking and financial systems. The impending recession is unnecessary and self-inflicted.
Debt Ceiling to Markets—I’ll Be Back!
The debt ceiling crisis has been averted—but this short-term relief might come at the cost of greater future peril. Franklin Templeton Fixed Income CIO Sonal Desai analyzes the debt-ceiling resolution and delves into the potential longer-term risks that rising public debt poses to financial markets.
Will Selling in May Work This Year? Maybe Not
With stocks struggling to break out of their range, rates climbing, and valuations stretched investors are rightly asking whether it’s time to sell.
Sinology On-the-Ground in China
Andy Rothman provides a first-hand perspective from his first trip to Shanghai and Beijing since the start of COVID in 2019.
A New Playbook for Portfolio Diversification
Transitioning into the post-COVID investment environment shifts the foundations of portfolio construction that investors relied on in recent decades. On full display in 2022, inflation and recession risk punished both bonds and stocks together to historic declines.
The Aftershock Economy
The first few years of the 2020s have seen a number of acute economic, financial, and geopolitical disruptions on a worldwide scale, and it will take time for the ultimate consequences of these shocks to be fully felt.
Farmland – The New Frontier of Real Estate Investing
Despite market headwinds, investors remain bullish on real estate. As traditional sectors, like office and retail, continue to underperform, farmland presents an opportunity for investors seeking capital preservation and downside protection.
U.S. Workforce Analysis: May 2023 Update
I've updated our monthly workforce analysis to include the latest employment report for May. The unemployment rate rose to 3.7% and the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 339K.
Bonds Everywhere Suffer as Rate-Hike Fears Swamp Traders
Global bonds are slumping after two shock interest-rate hikes this week served traders a reality check that central banks are far from done fighting inflation.
Full-time and Part-time Employment: A Deeper Look
Let's take a close look at May's employment report numbers on Full and Part-Time Employment. The latest data shows that 83.6% of total employed workers are full-time (35+ hours) and 16.4% of total employed workers are part-time (<35 hours).
Weekly Unemployment Claims Jump to Highest Since October 2021
This morning's seasonally adjusted 261,000 initial claims was up 28,000 from the previous week's revised figure. The latest reading came in well above the forecast of 235,000. This is the highest level of initial jobless claims since October 2021.
Big U.S. Banks Had A Good Quarter. We Still Have No Plans to Invest in Them.
Zehrid Osmani, Head of Global Long-Term Unconstrained at Martin Currie, discusses the recent positive earnings reports from large U.S. banks and explains why their firm has no plans to invest in the banking sector.
Mid-Year Market Outlook
Investors have had a lot to contend with thus far in 2023. Moderating economic growth, persistent inflation, volatile interest rates, falling profits, stress in the banking sector, war in Ukraine, and the debt ceiling debate all combined to weigh on sentiment.
How to Deal with Clients Beset by Anxiety, Fear or Greed
The emotionally overwhelmed brain cannot assimilate and act upon rational information.
Wall Street’s Once-Hot Trades of 2023 Are Unraveling in Markets
The once-hot Wall Street trades of 2023 are all falling apart, in a fresh blow to market pros blindsided again and again ever since the pandemic broke out.
Trade Deficit Expands to $74.60B
The U.S. international trade in goods and services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 1992 and details U.S. exports and imports of goods and services. In April, the trade deficit expanded by 23% to $74.60B. This is the largest gap the trade balance has seen in the last 6 months. The latest reading was smaller than the -$75.20B forecast.
Macro Outlook Retakes Spotlight
We see the market’s focus returning to higher-for-longer rates and sticky inflation after a U.S. debt ceiling deal. We prefer an up-in-quality portfolio.
Weekly Gasoline Update: Prices Drop for First Time in 4 Weeks
As of June 5, the price of regular and premium gas decreased by 3 cents and 2 cents, respectively, from the previous week. According to GasBuddy.com, California has the highest average price for regular at $4.79 and Mississippi has the cheapest at $2.93. The WTIC end-of-day spot price for crude oil closed at $72.15 and up 3.9% from last week.
The Total Return Roller Coaster
Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $13,927 for an annualized real return of 6.64%.
The Top Five Mistakes Advisors Make in Surge Meetings
Too many advisors jump into surge poorly prepared to deliver massive value to their clients. Here are five common mistakes and how to avoid them.
Buffett Valuation Indicator: May 2023 Update
With the Q1 GDP second estimate and the May close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 156.4%, up from 151.8% the previous quarter.
Important Individual Bond Product Points
Doug Drabik discusses fixed-income market conditions and offers insight for bond investors.
What Changed with the Pandemic (And What Didn’t)
Portfolio Manager Alex Zarechnak identifies six key themes from the COVID years—some new, some familiar—to help anchor investors in today’s emerging markets.
Alts Angle: Rethinking Retirement With Alternative Investments
Tony Davidow, Senior Alternative Investment Strategist with Franklin Templeton Institute, illustrates the potential impact of adding alternative investments to pursue growth and income—as well as seek to dampen volatility—during the accumulation and distribution phases of retirement.
Preparing for Volatility: The Debt Ceiling and The End of US Exceptionalism
The US debt ceiling negotiations brought considerable volatility to market prices.
Is Jeremy Siegel Right About Stocks for the Long Run?
The empirical evidence supports Seigel’s general assertion that stocks beat inflation in the long run. But the inflation-hedging benefits of stocks aren’t perfect.
Fixed Income Is Now a Buyer’s Market
Improved value proposition in credit.
Hard Landing, Soft Landing, or No Landing at All?
History suggests that a soft landing might be difficult, as the U.S. has entered a recession following the last five periods when inflation peaked above 5%.
Which Fund to Choose for Exposure to the Reinsurance Risk Premium
I will analyze the pros and cons of three funds to access the reinsurance market.
Energy Transition Generates Potential Investment Opportunities
Structural changes in the world’s energy systems represent significant investment potential across an array of sectors. Analysts on our equity research team offer insights into the impact and opportunities.
Complex, Significant Wealth Warrants Elevated Support
Managing substantial wealth often requires specialized capabilities and expertise.
Private credit: Opportunities in today’s market environment
Given the challenges presented by today's market environment, private credit can be a valuable and versatile tool in sourcing incremental growth and income, dampening portfolio volatility, and hedging the corrosive impact of inflation. Read this paper for an in-depth look at the types of private credit, potential benefits and how to access them.
The Big Four Economic Indicators: May Employment
There is a general belief that there are four big indicators that the NBER Business Cycle Dating Committee weighs heavily in their cycle identification process. This commentary focuses on one of those indicators, nonfarm employment. May saw a 339,000 increase in total non-farm payrolls. The unemployment rate rose to 3.7%. The forecast was for 180,000 jobs gained.
Vehicle Sales Per Capita as of May 2023
The moving average for the light vehicle sales per capita series peaked in August 1978. Almost 45 years later, it is down 40.5% from that peak.
Conflicting Signals Add Uncertainty to Fed’s Rate Path
Choppiness in the equity market continues as investors look to see a debt limit deal approved.
Macro Tailwinds for Emerging Markets
David Dali, Head of Portfolio Strategy, provides his 12-month outlook for global equity markets.
The Tapestry of Debt and What We Need To Do To Unravel It
Thoughts on the current US debt challenge and the long-term implications for markets and the economy from Stephen Dover, Head of Franklin Templeton Institute.
What Are You Waiting For?
Nick Goetze discusses fixed-income market conditions and offers insight for bond investors.
Treasury Yields: A Long-Term Perspective
As of May 31, 2023, the 10-year note was 312 basis points above its historic closing low of 0.52% reached on August 4, 2020.
The Far-Reaching Effects of Commercial Real Estate’s Downward Spiral
The Federal Reserve’s higher interest rates, the work from home trend, ESG distractions, increases in crime, etc., are having far reaching effects on our economy and investors.
Markets Now Accept Rate Cuts Unlikely
Inflation has proven sticky, even as growth weakens. Markets are realizing that policy rates are set to stay higher for longer. We like quality in stocks and bonds.
The Treasury Bond. It’s Time Has Likely Come.
I received many emails and questions on “why” we are adding the U.S. Treasury bond to our portfolios. The question is understandable, given its dire performance in 2022, where bonds had the biggest drawdown since 1786.
CPI and PCE: Two Measures of Inflation and Fed Policy
The BEA's core Personal Consumption Expenditures (PCE) Price Index for April, released last Friday, shows that core inflation continues to be well above the Federal Reserve's 2% long-term target at 4.7%. The April core Consumer Price Index (CPI) release was higher, at 5.5%. The Fed is on record as using core PCE data as its primary inflation gauge.
Job Openings Unexpectedly Rise in April
The latest job openings and labor turnover summary (JOLTS) report showed that job openings rose unexpectedly to 10.103 million in April. This is the first monthly increase in job openings since December. The latest figure came in above the forecast of 9.775 million vacancies.
Total Concentration: Mega Caps Reign
The concentration of gains up the cap spectrum isn't itself a precursor to weakness; it's the lack of participation from the "average stock" that warrants some caution.
Stock Traders Turn to Options for Desperate Chase to Catch the Tech Rally
Stock investors who planned for one thing in 2023 are getting something else entirely. Now, with the tech-obsessed market at risk of running away from them, the race is on to catch up.
Debt Ceiling: Getting to Yes
A debt ceiling deal is within sight.
Is the Commercial Real Estate Market a Potential Threat to the Banking System?
The stresses in the CRE market do not appear to pose a systemic threat to the global banking system.
The Time is Now for a Systemic Market Hedge
A range-bound VIX between 20-35 has common markers and dynamics which signal a “crisis gateway” that deserves a defensive posture.
Consumer Confidence Slips to Six Month Low
The Conference Board's Consumer Confidence Index ® slipped to 102.3 in May from April's upwardly revised reading of 103.7. This month's reading was better than expected, exceeding the 99.0 forecast. The latest figure is the index's lowest reading in the past six months.
America's Driving Habits as of March 2023
Travel on all roads and streets increased in March. The 12-month moving average was up month-over-month by 0.1% and was up 0.3% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) was up 0.0% MoM and down 0.8% YoY.
S&P Case-Shiller Home Price Index: Rebound Continued in March
In March, S&P Case-Shiller Home Price Index revealed seasonally adjusted home prices for the benchmark 20-city index saw a 0.5% increase month-over-month (MoM) and a 1.2% decrease year-over-year (YoY). After adjusting for inflation, the MoM was reduced to 0.0% and the YoY was reduced to -8.5%.
Bull vs. Bear: Is There a Future for Fossil Fuel Investments?
For this edition of Bull vs. Bear, Elle Caruso and Karrie Gordon discussed the pros and cons of investing in fossil fuels.
Making Cent$ Of the Dollar: Understanding the Challenges to Its Global Reserve Currency Status
As other nations seek to become less dependent on the U.S. dollar, rumors of the greenback’s potential demise continue to swirl. Can the dollar remain king of the world’s reserve currency?
Defensive Stand: Investment-Grade Corporates Hold the Line
The financial markets are giving off mixed signals of late, and credit investors may wonder whether to be downbeat or optimistic.
The AI Era Unleashed: How NVIDIA’s Stock Boom Reflects The Future Of Tech
If you were doubting whether the age of AI has arrived, NVIDIA’s stock performance this week may have given you second thoughts.
The "Real" Goods on the April Durable Goods Data
The Census Bureau has posted its advance report on new orders for durable goods for April. This series dates from 1992 and is not adjusted for either population growth or inflation. Let's review durable goods data with those two adjustments.
The Big Four: Real Personal Income Inches Up
Personal income (excluding transfer receipts) rose 0.5% in April and is up 5.7% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) was up 0.2% month-over-month and 1.2% year-over-year.
Real Disposable Income Per Capita Flat in April
With the release of this morning's report on April's personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.37% month-over-month change in disposable income comes to 0.00% when we adjust for inflation. The year-over-year metrics are 7.36% nominal and 2.87% real.
Debt Ceiling Standoff: What Investors Should Know
While we don't expect the U.S. government to default, the uncertainty may heighten market volatility in coming days. Here are answers to some of the questions we're hearing most often.
It’s Time to Start Playing Investment “Small Ball” in Portfolios
Rick Rieder and team argue that a series of small, but more probable, wins in fixed income can pave the way for portfolios to outperform benchmarks in 2023.
Live at the Sub-ICs
The semiconductor cycle is dead, long live the super cycle!
Durable Goods Orders Up 1.1% in April, Better Than Expected
New orders for manufactured durable goods came in better than expected in April at $283.02B. This is a 1.1% increase from last month and higher than the expected 1.1% decline. The series is up 4.2% year-over-year (YoY). If we exclude transportation, "core" durable goods were down 0.2% from last month and down 0.2% from last year.
The Similarities & Differences Between Today & The GFC
I’ve said it before, 2023 has been a heck of a year. In just five months, four large regional banks and one major global financial institution shuttered, marking the second-worst year for bank failures.
The Quality Spectrum: Stability in an Unstable World
War, inflation, rising rates, banking chaos, and recession are among the challenges facing markets. Investors must balance these shorter-term risks with the long-term return prospects of equities.
An Overview of US State Budgets and Municipal Bonds
As COVID-era funding boosts come to a close, US state and local governments are facing some challenges. However, they have many tools with which to tackle them, according to Jennifer Johnston, Franklin Templeton Fixed Income’s Director of Research, Municipal Bonds. She provides her latest outlook.
Examining the Importance of Dividend Growth
The two primary styles of dividend investing are growth and yield. In the latter, investors embrace stocks with what are deemed above-average yields — often from slower-growth sectors, such as utilities and real estate.
The Bond Market Knows More than the Credit Rating Agencies
Investors should rely on the wisdom of crowds as expressed through bond yields, not credit rating agencies, to judge fixed-income credit risk.
Chicago Fed: Pickup in Economic Growth in April
The Chicago Fed National Activity Index (CFNAI) rose to +0.07 in April from -0.37 in March. All four broad categories of indicators used to construct the index increased from March, but two of the four categories made negative contributions in April. The index's three-month moving average, CFNAI-MA3, decreased to -0.22 in April from -0.12 in March.
Investors Only Have Eyes for Cash
In 2011, markets were relatively flat during the year before Congress and the White House (temporarily) buried the hatchet with the passage of the Budget Control Act on August 2, 2011.
Imagine Financial Planning 2030
AI’s arrival will have an increasingly large impact on our lives. That includes investing and, especially, other aspects of financial planning.
Public or Private? A Strategic Question
We prefer private to public credit long term on better return potential. It’s the mirror image in equity: We prefer public stocks as risks fade in the medium term.
A Look at the Debt Ceiling
The deadline for the #debtceiling is quickly approaching. Where does each side stand? What does each side have to lose? Will a deal get done despite the hardening of partisan lines? Check out what it all means for investors.
Rebalancing Your Clients’ “Purpose Portfolio”
We must understand our clients’ purposes and how they fit together in their lives. We need to take the initiative when rebalancing is in order.
Pimco, BlackRock Call End to Era of Stable Borrowing Costs
Bond-market titans BlackRock Inc., Pacific Investment Management Co. and Vanguard Group Inc. are warning that recent violent swings in US Treasuries are only the beginning of a new era of volatility that’s here to stay until central banks conquer inflation.
Hedge Funds Rush to Buy Stocks on S&P 500’s Momentum
Some previously steadfast bears are showing signs of giving in after a seven-month advance put the S&P 500 on the edge of a key chart line.
Wheat, Gold and the Pursuit of a Zero-Correlation Investment
Diversification is a cornerstone of thoughtful, long-term focused investing. Incorporating assets and asset classes that don’t always move in tandem – that is, their returns aren’t strongly correlated – can help temper stock and bond market risk.
How Direct Indexing Automation Aids Tax-Loss Harvesting
Tax-loss harvesting is one of the direct indexing’s biggest benefits. The automation that direct indexing provides greatly increases the strategy’s potential benefits.
Economic Imbalances Could Mean Deep Recession or Sticky Inflation
A member of Putnam's Fixed Income team since 2007, Onsel Gulbiten analyzes macroeconomic issues, including inflation, interest rates, and policy developments.
Banking Stress and Preferred Securities: Now What?
Banks and financial institutions are big issuers of preferred securities, so the recent banking industry volatility has had an impact. Our guidance on preferreds is unchanged but with some caveats.
U.S. Debt-Ceiling Scenarios: 4 Different Ways the Negotiations Could Play Out
Negotiations among lawmakers in Washington, D.C., to raise the debt ceiling might trend in a more favorable direction.
In Golf and Investing, Handicaps Matter
We propose a golf-inspired advisor assessment framework with a scorecard, fairway average and handicap as performance measures to quantitatively assess an advisors’ investment performance.
How to Build Defensive Equity Portfolios
Risk-averse investors seeking defensive systematic strategies to reduce left-tail risk should broaden their search beyond low volatility/low beta.
The Long and Short of It
What generally follows that expression is a succinct synopsis. We’re always trying to be concise;
however, distilling complex economic and investment matters usually requires several pages.
A Systematic Approach to Long-Term Investing
Macroeconomic uncertainty presents new challenges for investors who are saving for long-term goals like retirement. Inflation can diminish the ability to save today and the value of those savings tomorrow.
Monetary Support Suggests Bear Market Is Possibly Over
Could massive monetary support have softened the deep bear market many expected? It is an interesting question. Particularly given the Fed has hiked rates at one of the most aggressive paces in history.
International Style
Factor investing has seen increased popularity in the US. Investors may also want to consider increasing their opportunity set by considering factors abroad.