Sustainable Investing

U.S. debt may not be at an immediate breaking point, but persistent deficits, higher rates, and rising interest costs are narrowing fiscal space and market tolerance.

On August 19, the US Treasury announced that it will at least double the size of its long-term bond buybacks, from $2 billion to $4 billion per operation, between September 9 and the November Quarterly Refunding. The announcement followed a rise in the 30-year Treasury yield to roughly 5.3% and is drawing attention to how the Treasury may respond if pressure at the long end persists.

Outdoor sports and exercise are more difficult at the height of summer. Runners slow their paces, and teams start their practices early to beat the heat. Competitors must marshal their energy carefully to perform at their best.

After recovering from the “tariff tantrum” that saw stocks of all sizes and styles bottoming out in early April of 2025, equities finished 2025 in admirable shape, carrying the positive momentum into 2026.

Market leadership has broadened beyond mega-cap tech, but the next phase is likely to reward disciplined, diversified investors, write Chris Galipeau and Lukasz Kalwak of Franklin Templeton Institute.

U.S. equities were mostly higher last week, though gains were modest and trading was quiet. The S&P 500, an index of the largest U.S. companies, rose 0.4 per cent and closed on Thursday at a new record high.

Margin of safety has nearly vanished from today’s market, as heavy AI debt, off-balance-sheet financing, and a stressed bond market leave stocks little room for error.

With the US fiscal year 2027 (FY27) state budget season now largely complete, several important trends have emerged. Most states and local governments adopted their budgets without major delays or political impasses, an encouraging sign for two important credit considerations: governance and financial management.

Governments can print money, but they cannot print credibility. Once investors begin to question a country's fiscal trajectory, borrowing costs rise, confidence erodes, and policy choices become increasingly constrained. The age of cheap debt allowed many governments to overlook these limits. Today, they are becoming harder to escape.

Small-cap equities are winning out against their large-cap counterparts in a classic David versus Goliath ETF battle. After years of mega-cap technology dominance, small-cap equities have delivered investors a historic first half of 2026.

This bargain-hunting environment sets up a stark divide for upcoming earnings. Walmart (WMT) remains uniquely positioned as its dominant grocery business continues to draw trade-down traffic from higher-income households, whereas Target (TGT) faces headwinds due to its heavier mix of discretionary home and apparel goods.

Chris Galipeau discusses high-conviction insights that go beyond media headlines.

Franklin Templeton Institute finds valuations across fixed income sectors becoming more attractive, with all-in yields approaching compelling levels—a signal to consider moving from a short-duration bias toward core bond portfolios.

Royce Investment Partners: Co-CIO Francis Gannon examines the myth that rate hikes are bad news for US small-cap returns—and finds that history tells a different story.

While institutions have embraced private markets for decades, individuals have historically had limited access to these potentially valuable and versatile tools. Tony Davidow from Franklin Tempelton Institute demonstrates that private markets can be potentially valuable sources of growth and income during the accumulation and distribution phases of retirement.

The release of ChatGPT in 2022 ushered in the AI era. Since then, technology stocks have emerged as a key driver of market performance. The extraordinary gains have naturally sparked questions about whether the momentum can continue, particularly as technology companies invest heavily in AI infrastructure.

The risks of a rate hike have increased lately, but we don't believe we're there just yet. If the data changes—specifically if inflation comes in hotter-than-expected over the next few months—we'll likely change our view.

All told, global equities are near all-time highs, despite the sharp June-July semiconductor drawdown. Fundamentally, an eye-popping 50% Q2 SPX earnings growth rate fuels the rally. Of course, it has been a perfect storm of sorts for domestic large-cap profitability. ​

College planning begins long before college. Learn why welcoming a new child is the ideal time to build a strong financial foundation, explore education savings options and prepare for your family’s future.

The market was jolted by a much weaker-than-expected employment report, sending Treasury yields sharply lower as investors quickly reduced the odds of another Federal Reserve rate hike. At first glance, the payroll number looked alarming, particularly when combined with sizable downward revisions to prior months and unexpectedly soft wage growth.

Municipals posted their weakest July return in more than two decades. The Bloomberg Municipal Bond Index returned -1.85%, underperforming most investment-grade fixed-income sectors and marking just the fifth negative July return over the past 30 years.

Today’s equity markets are arguably the most concentrated, interconnected and exposed to correlated risks in the modern era. In this fragile environment, we believe investors need more than just exposure to stocks that have driven recent market returns. Disciplined stock selection and clear risk objectives are essential—as well as conviction in what not to own.

US equity market leadership underwent a rotation in July, with previous leaders turning into laggards and vice versa.

Chris Galipeau discusses high-conviction insights that go beyond media headlines.

US 10-year Treasury yields have climbed roughly 50-basis points since the start of 2026. This is not an inflation scare. Despite the sharp rise in energy prices following the outbreak of war with Iran, market-based measures of medium-term inflation expectations have drifted lower.

Many of the most critical components of AI infrastructure are produced by a small and increasingly consolidated group of highly specialized companies.

LPL Research highlights strong corporate earnings, AI-driven growth, and a favorable equity outlook while monitoring inflation, oil prices, and risks.

This summer has offered little opportunity for a lull. Investors have contended with Federal Reserve (Fed) policy uncertainty, renewed tariff-driven inflation concerns, escalating tensions in the Middle East, questions about the durability of AI-related investment spending and a packed earnings calendar.

The market spent much of this week trying to interpret what Fed Chair Kevin Warsh meant rather than what he actually said and that was entirely avoidable. The decision to leave rates unchanged was defensible. What wasn’t defensible was Warsh’s lack of explanation.

As companies race to capitalize on the AI boom, water security is emerging as a material risk across the value chain. While data centers attract headlines, semiconductor fabrication remains one of the value chain’s most water-intensive activities, requiring reliable supplies of high-purity water.

Chris Galipeau discusses high-conviction insights that go beyond media headlines.

Energy markets have reached a precarious moment, with the path of prices over the remainder of the year – and potentially beyond – hinging on two key questions.

In part two of AB’s “Build a Better Path” Disruptor SeriesTM, we shifted from diagnosing the challenge of long-term investing to a potential approach for solving it. With practical, actionable steps, investors have the potential to translate the concept of improving up/down capture into strategies aimed at improving portfolio design.

As families prepare for college move-in season, the packing list usually starts with the obvious essentials: bedding, a laptop, chargers, school supplies and plenty of snacks.

Artificial intelligence is a transformative new technology, but we believe that it’s likely to follow a familiar pattern. From spreadsheets to the internet, innovations have historically given early adopters an edge—for a time. In our view, the ability to maintain that advantage depends much more on how effectively an asset manager integrates it throughout the organization.

Chris Galipeau discusses high-conviction insights that go beyond media headlines.

Resilient earnings, improving industrial activity and the AI investment cycle should continue to support equities, according to Putnam Equity’s Shep Perkins. But the same forces driving the market higher are also making companies harder to value.

The summer has once again brought a miasma of wildfire smoke across wide stretches of the nation, leading to hazy views and slower activity. The clouds in our outlook are not merely atmospheric. A failed ceasefire and renewed conflict in the Middle East have created new reasons to worry about economic performance.

From severe wildfires in northern Ontario to record heat across Europe, extreme weather is back in the headlines. Such events are becoming more frequent and intense, and the risks associated with them are testing the limits of insurability. With our research partners at Columbia Climate School, we examine how strains on the insurance system can transmit climate-related risks through the capital markets.

The prime culprit was renewed questioning of the artificial intelligence (AI) buildout given the increasing amount of capital investment needed to bring it to life and the corresponding costs for those who use the technology weighed against its potential productivity benefits.

As developed economies grapple with higher debt burdens and elevated interest rates, the UK's gilt market offers important lessons for investors evaluating sovereign bonds around the world.

The first half of 2026 was shaped by market-moving headlines. The conflict in the Middle East was the most significant story, triggering a short-term market sell-off.

Chris Galipeau discusses high-conviction insights that go beyond media headlines.

The first half of 2026 reinforced the importance of balance, selectivity and income generation. Franklin Income Investors Chief Investment Officer Ed Perks discusses how markets have evolved, where opportunities are emerging, and why diversification remains critical heading into the second half of the year.

Investors must determine what the AI capital-spending surge means for long-term business durability.

Tax-aware long-short strategies are no longer the exclusive domain of institutional investors. As separate account delivery has expanded access, more advisors are asking whether tax-aware long-short belongs in their clients’ portfolios. Here are five practical considerations to help you decide.

Midyear is a useful moment in investing—not because it tells us where we are going, but because it offers a clearer view of how little we truly knew at the start. Six months is often enough time for confident forecasts to meet reality, for consensus narratives to fray, and for the distinction between what sounded plausible and what proved durable to come into focus.

Beyond the obvious differences such as contribution limits, ability to take loans and eligibility requirements, here are some other, lesser-known differences many savers may not be aware of.

General Douglas MacArthur once remarked that “rules are mostly made to be broken.” He was at odds with U.S. President Harry Truman over the conduct of the Korean War, feeling that the restrictions placed on his forces weren’t supportive of success.

This paper presents the case for emerging market (EM) allocations within the broader context of global investment strategy. In a period of heightened geopolitical complexity—spanning the 2026 US-Iran conflict, challenges to globalization, political transformation and ongoing great power competition—we believe the case for engaged emerging markets exposure has never been stronger.

For decades, traditional index-based ETFs have served as the low-cost foundational anchor for core allocations, consistently demonstrating that outperforming a broad market index is an uphill battle.

Morningstar data shows most active strategies lag passive indexes, but selective active fixed income ETFs can generate alpha.

Markets enter the second half of 2026 facing a familiar wall of worry—geopolitical conflict, oil prices, inflation, Federal Reserve policy, and questions around the durability of an AI-led equity rally. Yet the economic backdrop still looks resilient: growth remains solid, inflation has moderated, unemployment is reasonable, and market leadership appears to be broadening.

The sharp correction in gold prices during the first half of 2026 has left many investors wondering whether the precious metal's bull market has come to an end. According to Money Metals' Mike Maharrey, however, the market's recent weakness is largely a matter of perspective.

Chief Investment Officer Sean Taylor reviews a strong second quarter for emerging markets, where AI and reindustrialization were key drivers of investor returns.