Perspective on Market Volatility
After several months of historic calm, stocks sold off sharply last week. Rising interest rates and trade war fears were cited as the primary causes of the sell-off that caused the Dow Jones Industrial Average to drop more than 1300 points on Wednesday and Thursday combined. Concerns about corporate profit…
Benign Inflation Readings Support Fed’s Gradual Approach
Several new readings on inflation last week confirmed that price pressures remain manageable, supporting a continued gradual path of rate hikes for the Federal Reserve (Fed). With the unemployment rate near multi-decade lows and the economy growing well above the median Fed longer-term consensus rate of 1.8%, markets are growing…
10-12-18 Weekly Bottom Line
The S&P500 has seen its biggest five-day loss since February last week. Much like then, higher bond yields have led to a repricing of stocks. There are few signs the U.S. economy is cooling. September consumer price inflation data showed that inflation pressures remain quite contained. On net, this argues…
Global Equity Market Outlook: Favor U.S.; Stick with EM
We continue to favor the United States and emerging markets (EM) over developed foreign markets for global equity allocations. We see the U.S. economy as the primary driver of our forecast for 3.8% global gross domestic product (GDP) growth in 2018, supported by new fiscal policies, while Europe and Japan…
Global Economic Outlook: U.S. and EM Poised to Underpin Growth
Investors have been digesting a number of important global developments this year: fiscal stimulus, trade tensions, divergence in global policy and currencies, and political developments. As 2018 heads into the fourth quarter, we’ve put together what we believe these developments mean looking forward to 2019. Overall, we expect global growth…
10-05-18 Weekly Bottom Line
The big story of the week is the trade deal struck just in the nick of time between U.S. and Canada. The new USMCA deal will see Canada joining the agreement previously worked out between the U.S. and its southern neighbor and calms some fears, particularly among auto manufactures in…
Best Quarter for Stocks Since Q4 2013
Investors endured a flurry of trade headlines and emerging market turmoil in the third quarter, but that didn’t slow down U.S. stocks. The S&P 500 Index rose 7.2% during what has historically been the most volatile quarter of the year (7.7% including dividends), its biggest quarterly gain since the fourth…
The Dot Disconnect
The Federal Reserve (Fed) wrapped up its most recent monetary policy meeting on Wednesday, September 26. While the Fed raised its policy rate, as expected, the more important outcome was the Fed’s guidance on future policy through its statement, a new set of forecasts, and Fed Chair Jay Powell’s press…