Tools and resources necessary to help you make informed investment decisions and build stronger portfolios
This paper, written by Chaoping Zhu, discusses the Chinese new reforms and the subsequent selling pressure in Chinese equities, and what this means for investors.
The FOMC statement highlighted the continued improvement in economic conditions due to progress on vaccinations, but noted risks to the outlook still remain, largely reflecting the rise in cases over the past few weeks in unvaccinated communities.
It is reasonable to believe that at some point we will see the U.S. economy return to a trend pace of growth, and furthermore, it would not be surprising for the recovery to be a bit more uneven that was originally anticipated.
Understanding how to properly navigate conversations with Millennials and recognize the unique challenges that face younger investors today are important steps in building a successful relationship with the next generation of wealth.
Generational differences can present a challenge when navigating money management. Discover our best practices for making these conversations more fruitful.
One of the most prevalent concerns among investors today is where inflation is heading next.
After a sharp drop in 2020, global inflation is rising due to recovering energy, surging goods and normalizing services prices. This reflation signals building momentum in the global economy, a support for credit and equities, especially of cyclical regions like Europe, Japan, and EM ex-North Asia.
While many changes are likely to emerge, one clear trend, with far-reaching macro and market implications, is the increase in leverage, says Azzarello.
At the June meeting, the Federal Open Market Committee (FOMC) signaled a more hawkish stance towards its monetary policy outlook driven by a materially stronger growth and inflation outlook in the medium term.
The bottom line is that if inflation begins to rise, interest rates will rise, and valuations will come under pressure. So far, 2021 has been characterized by range bound valuations and rising earnings estimates, which has allowed the equity market to trend higher during the first half of the year.
Following the recession in the first half of 2020, U.S. equities rebounded quickly. Today, partly due to this and partly due to the strong domestic reopening story, U.S. equities make up roughly 79% of total investor equity allocation, just 20 bps shy of an all-time high.
Investors may want to focus on the intersection of valuation and historical volatility when positioning equity portfolios for what could be a bumpy ride this summer.
EM offers investors access to powerful structural growth stories of the expansion: technological innovation and the rise of the EM Asia middle class, themes that will come back into favor once investors look past the early cycle economic growth surge.
A disappointing April report suggested a combination of higher federal unemployment benefits, lingering COVID concerns, and remote schooling constrained job growth, but as many of these factors ease in the coming months, job growth should increase.
Regardless of one’s personal view, digital assets and cryptocurrencies are becoming an increasingly large part of the global financial system. As such, more and more investors are asking how they should think about them as both investments and currencies.
Looking ahead, European equities should stay supported given a substantial improvement in vaccinations, upcoming fiscal support, and a sizable valuation discount relative to the U.S. for a market that offers access to both the cyclical recovery and an inflation hedge.
The most successful companies of the past decade are not necessarily going to be the leaders of the next decade. Sustainability is likely to be a decade-defining theme, creating opportunities for the next generation of innovative companies.
How will higher taxes impact retirement savings? Explore how resilience to tax changes can maximize after-tax returns for better retirement outcomes.
Policymakers will be the key drivers of efforts to mitigate climate change, and given the urgency and sheer scope of the challenge, they will need to pull on all of the levers available.
With future domestic market returns constrained by heightened valuations, other opportunities must be sought out: international equities remain one of the best.
President Biden’s recently proposed American Jobs Plan outlines a robust strategy to rebuild the nation’s infrastructure, while also including significant funding for clean energy and affordable housing.
Achieving net zero carbon emissions will be no easy feat. It will require major innovation and investment. Therefore, it presents incredibly lucrative opportunities for the companies and countries that succeed.
While we cannot time the market, fundamentals remain supportive. With this in mind, investors saving for retirement should be positioned more aggressive in their allocations.
In general, there are three levers that a corporation can pull to boost return on equity – margins can expand, assets can be used more efficiently, or more leverage can be taken on .
All told, the post-COVID global recovery should help to sustain commodity performance in the near-term, a boon for investors looking to hide from inflation or diversify portfolios. However, it seems premature to call this anything more than a strong recovery.
After this year’s 18% correction in the MSCI China, valuations are now presenting a more interesting entry point. Over the next decade, China’s growing capital markets and its increasing size in the 60/40 portfolio is the most interesting development to watch.
Although ultimately all of this may not pass in final legislation, it represents significant and comprehensive efforts by the U.S. to uphold its commitment to reduce carbon emissions and improve underserved communities.
2020 was an incredible year in the capital markets. However, in the wake of very strong performance for both stocks and bonds over the past 12-months, as well as the past decade, most traditional assets are looking expensive.
Inflation has been a hot topic amongst investors. Globally, inflation is expected to rise this year from 2020’s low levels. This reflation, a sign that the economy is operating above potential, should lead to strong earnings growth as well
Although we are not inclined to chase recent performance, it seems reasonable to expect that a more balanced approach to equity markets could help investors navigate what remains a very uncertain world.
For better or for worse, banks are required to meet various liquidity and leverage requirements. One ratio that measures a bank’s ability to absorb losses is the Supplementary Leverage Ratio (SLR). The SLR formula measures tier 1 capital, which consists mostly of common and preferred stock, as a percent of total leverage exposure.
Later this year, we expect the Fed to announce plans to taper its bond purchases, but EM is better positioned should a surge in real yields occur. In 2013, concerns centered on EM countries that had external vulnerabilities (such as large current account deficits), which left them particularly exposed to capital outflows.
Despite many other measures to help slow the spread of COVID-19, there is only one that can end the pandemic: broad global vaccination.
The Federal Reserve has made it clear that they are laser-focused on returning to full employment. One can only wonder if they will be looking for a durable rise in the overall participation rate, or whether they will take a more granular view and seek more equal progress across the gender spectrum.
The remainder of 2021 should see an acceleration in economic activity, rising inflation, and higher interest rates. In general, this dynamic should support the outperformance of value relative to growth, with attractive relative valuations acting as an additional tailwind for value outperformance.
The March 4th OPEC+ meeting passed with more fanfare than is typically associated with the organization’s biannual summit. As is normal, OPEC countries, led by Saudi Arabia, met with key non-member states to discuss output changes.
The pandemic has presented many challenges for working parents— simultaneously managing full-time jobs, supervising children’s remote learning, and tackling household chores, with fewer options for outside assistance.
Given the modest back-up in yields over the last several months, many investors are wondering if, and how, the role of fixed income in a portfolio might change moving forward.
Comparing the recoveries of the global financial crisis (GFC) and the pandemic recession is like comparing the tortoise and the hare: the aftermath of the former was slow and steady, while the latter should experience a burst of speed ahead.
Among the many considerations the Federal Reserve has to take in managing monetary policy, the behavior of the Treasury Department can be one of the more challenging. The Treasury Department holds its cash on deposit in the Treasury General Account at the Fed.
Markets saw retail investors pile into highly-shorted, small cap equities in an effort to push back on the institutional investment community
Loss aversion refers is the preference to avoid losing compared to gaining an equivalent amount.
Last week, we learned that the unemployment rate fell to 10.2% in July.
The balance sheet of the U.S. Federal Reserve (Fed) has increased by 2.9 trillion USD since the start of March, meaning that in just over eleven weeks it has grown more than it did in the five years following the Financial Crisis.
Global governments have been swift and bold in supporting their economies, building a bridge to get consumers, small businesses and corporates over the present abyss to the other side. Given the unknown breadth and depth of the abyss, more stimulus may be required.
Year-to-date, emerging market (EM) equities are down -17.6%, as a combination of the COVID-19 recession and the oil price shock has led to downward revisions to earnings expectations, as well as weaker currencies relative to the U.S. dollar.
Investors looking to the equity market for income should focus on sectors with healthy balance sheets and minimal exposure to the COVID downturn, says Lebovitz.
Global markets have roiled in the face of COVID-19 and social distancing, and many investors are looking to “pick up the pieces,” eagerly hunting for the next big opportunity.
Earlier this week, oil prices turned negative for the first time in history, with WTI trading as low as -$37 a barrel.
Over the past two months investors have digested the COVID-19 shock: the fast spread of the virus around the world, the social distancing measures implemented and the resulting economic and earnings recession.
1Q20 earnings season will provide an important first look at how the ongoing pause in global activity is impacting corporate earnings.
The industries most impacted by social distancing account for 20% of payroll employment, and consumer spending across those industries account for 20% of GDP.
Today’s objectively complicated credit market may be an excellent source of future portfolio growth, says Dryden.
Ultimately, how high the unemployment rate gets is dependent on one key question: will American small business fire its workers, says Manley.
Initial claims for unemployment insurance surged to the highest level ever: 3,283,000, spiking from a slightly revised 282,000 last week.
This paper, written by Dr. David Kelly, reviews the U.S> relief bill and its investment implications.
The U.S. Federal Reserve (Fed) has pulled out its alphabet bazooka in an effort to ensure sufficient liquidity and the smooth functioning of financial markets, while also providing credit to businesses that are affected by the spread of COVID-19 and the stall in global economic activity.
As economists continue to revise down their 2020 GDP estimates, a lot of clients have been asking us about the potential impact on earnings.
This past Sunday, the U.S. Federal Reserve (Fed) fired a last desperate salvo in an attempt to stabilize financial conditions, the second emergency inter-meeting cut in two weeks.
Coming into this year, we expected an improvement in global economic growth, as 2019’s policy uncertainty clouds dissipated.
The COVID-19 crisis confirms, once again, the value of a diversified portfolio, says David Kelly.
It is important to avoid trying to predict the future; rather, clients are best served by monitoring the present situation and maintaining composure.
There is not a clear answer. However, what we can provide perspective on, is where we are finding value, according to David Lebovitz.
Former Vice President Joe Biden made a surprise comeback during the Super Tuesday contests, paving the way for a two-person race to the Democratic nomination.
Even with this Fed action, there will likely be calls for fiscal action to support to businesses suffering from the response to virus fears, says David Kelly.
Equity investors spend a lot time looking for where earnings growth will be strong; what doesn't get as much attention is what happens after they're generated.
Taken at face value, the fall in job openings is concerning and warrants careful monitoring.
AUM growth and focus by investors globally suggest interest and adoption of sustainable investing is unlikely to subside anytime soon, says Samantha Azzarello.
Financial markets have fallen sharply on concerns of the coronavirus, a respiratory illness first identified in Wuhan, China, spreading globally.
Equity market valuations have risen substantially in recent months, with the forward P/E ratio of the S&P 500 now at a level of 18.6x.
Investors are now asking whether inflation could return, threatening the rally in financial markets.
Buying the dip - the coveted strategy (almost) all investors like to employ.
Rising geopolitical tensions with Iran have led to some fears over potential oil supply shocks out of the Middle East.
Rising geopolitical tensions with Iran have led to some fears over potential oil supply shocks out of the Middle East.
