Explore the potential market scenarios in 2025 with Meera Pandit's insightful analysis on tariff turmoil, trade truces, tax cuts, tech tumbles, and inflation spikes. Discover how these scenarios could impact equities, yields, and your investment portfolio. Learn about the importance of diversification and alternative investments in navigating volatile markets.
Traditional investment wisdom holds that when stocks zig, bonds zag, creating natural portfolio diversification. However, when inflation becomes the focus of investors and central banks, this relationship can break down.
Discover the driving forces behind the impressive 15.1% rise in Eurozone equities in 2025. Explore how fiscal policies, structural changes and key sectors like Defense and Aerospace and Banks are fueling growth. Learn about the impact of geopolitical events, government spending and market dynamics on Eurozone's economic outlook. Stay informed with expert insights and analysis on the sustainability of this market rally.
Explore the February Jobs Report with insights into payroll growth, sector performance, unemployment trends, and wage dynamics. Understand the implications for investors and the Federal Reserve amidst economic uncertainties. Ideal for institutional clients and qualified investors seeking a comprehensive analysis of current labor market conditions.
Explore the investment implications of recent tariff increases amidst trade turmoil. Discover strategies for navigating economic uncertainty, including asset diversification, quality risk exposure, and active management. Learn how tariffs impact growth, inflation and key industries, and gain insights into effective investing amidst policy changes.
Explore the AI Capex Boom as leading U.S. tech companies invest heavily in AI infrastructure, driving economic growth and productivity. Discover the implications for investors and the global economy, and learn how to navigate the evolving AI landscape with a diversified approach.
Explore the potential of small cap earnings in 2025 with Meera Pandit's insightful analysis. Discover why small cap stocks, despite an estimated 39% earnings growth, may face significant revisions and challenges. Learn about historical trends, economic factors, and investment strategies that could impact small, mid, and large cap equities.
Explore the sustainability of European equities' strong performance in 2025. Gabriela Santos analyzes the factors driving market gains, including cyclical recovery and structural changes, while highlighting potential risks like U.S. tariffs. Discover insights into global equity valuations and the future of international markets.
Explore the potential impacts of President Trump's "Fair and Reciprocal Plan" on global trade, focusing on how reciprocal tariffs could affect the European Union and emerging markets. Understand the complexities of non-tariff barriers and the economic implications for investors and industries. Stay informed with insights on international trade dynamics and market vulnerabilities.
Explore the January CPI report's impact on inflation trends and the Fed's stance on interest rates. Discover insights into core inflation, energy prices, labor market dynamics and tariff effects. Understand how these factors influence inflation expectations and the Fed's cautious approach amid potential trade wars. Stay informed on economic indicators and their implications for future monetary policy.
Discover how savvy investors can turn market volatility into opportunity with active tax management. Learn strategies to harvest tax savings and generate alpha in 2025's unpredictable market landscape.
Robust profit growth expectations and lofty S&P 500 price targets suggest investors are optimistic about 2025. However, there is deep uncertainty around how tariffs and tax reform may unfold, but 2018 can offer clues as to how these policies could impact profits, corporate activity, and market performance.
After a stimulus-fueled rally in 3Q24, Chinese equities have recently stumbled, declining 3.2% since the U.S. election. Domestically, challenges like policy uncertainty and real estate sluggishness persist, while externally, new risks are emerging.
Washington has been a hub of excitement for investors in recent weeks. However, the January Federal Open Market Committee (FOMC) meeting provided a welcome change of pace with few surprises.
A Chinese startup has disrupted the AI landscape and sent shockwaves through markets. DeepSeek, a newly released large-language model (LLM), challenges the dominance of tech giants by boasting similar performance despite using less sophisticated chips and functioning at a fraction of the cost.
Mexico and Canada took the spotlight this week after President Trump announced plans to impose 25% tariffs on its USMCA partners starting February 1st., as well as an investigation into unfair trade practices by China and others.
High hopes for the U.S. equity market this year are underpinned by expectations of robust corporate profits, and early indications of 4Q24 earnings have not disappointed.
Natural disasters impose severe hardships on families and communities, and our thoughts are with those affected by the wildfires in Southern California.
Over the past two years, healthcare stocks have experienced significant outflows and underperformance relative to the broader market, despite positive catalysts like innovation and weight-loss drugs.
The spread between the 3-month U.S. Treasury bill yield and the 10-year U.S. Treasury yield, commonly referred to as the yield curve spread, is a vital indicator in financial markets and is closely monitored by investors and the Federal Reserve, particularly given the historical efficacy of its inversion predicting U.S. recessions.
2024 was a busy year. Global economic growth diverged amidst elevated uncertainty; nearly half of the world's population went to the polls, igniting debates around policy; inflation eased across major economies, with policymakers seemingly successful in engineering a "soft landing"; and risk assets performed well, though the dispersion of returns across asset classes widened.
The U.S. dollar has continued to defy gravity, rising 7% in 2024 despite two Fed rate cuts. While the DXY Index peaked in September 2022, the U.S. real broad effective exchange rate (REER), which measures the dollar’s value relative to a broad basket of currencies adjusted for inflation differentials, remains near all-time highs.
To conclude the year, tariffs have once again become a focal point, with Google searches for the term spiking in November and December.
At its final meeting, the Federal Open Market Committee (FOMC) voted to reduce the Federal funds rate by 0.25% to a target range of 4.25%-4.50%, cutting rates by a 100 basis points (bps) or 300bps annualized in 2024.
As Paul Krugman famously stated in 1990, “Productivity isn’t everything, but in the long run it is almost everything.” By boosting productivity, an economy can enhance its standard of living by producing more with the same or fewer resources. In essence, productivity is a key driver of economic prosperity.
Today, investors are trying to understand the “series of tubes” that enable artificial intelligence. Behind every interaction with an AI tool is not only a complex web of digital neural networks, but also a humming physical network of data centers, electricity lines and power plants.
The alternative investment landscape often evolves gradually. Assets may be priced infrequently and therefore are less sensitive to day-to-day market moves.
Bitcoin has staged a remarkable rally this year, doubling in price to nearly $100,000. As of today, it is near an all-time high.
The dominance of Big Tech in digital services has enabled them to scale and grow in unprecedented ways, but has also raised concerns about their expanding power.
Former Federal Reserve (Fed) Chair Janet Yellen described the first episode of balance sheet drawdown from 2017-2019 to be “like watching paint dry”.
Today’s economic environment differs meaningfully from 2018—while the inflation heatwave is mostly past us, its embers are still alive.
In 2018, the U.S. corporate tax rate was slashed from 35% to 21% when the 2017 Tax Cuts and Jobs Act (TCJA) went into effect. On the campaign trail, President-elect Trump proposed a further reduction from 21% to 15%, specifying this would apply to companies that make their products in America.
With the U.S. election results settled, investors are now evaluating the economic policy implications. U.S. risk assets are buoyed by the ongoing soft landing and prospects of deregulation and lower corporate taxes.
In its penultimate meeting of 2024, the Federal Open Market Committee (FOMC) unanimously voted to lower the federal funds rate by 25 basis points to a target range of 4.50%-4.75%.
Former President Trump has been declared the winner of the U.S. Presidential election, securing the Electoral College and likely the popular vote. Republicans regained control of the Senate and are expected to gain control of the House as well.
Since the Fed’s jumbo 50 basis point rate cut in September, U.S. 2-year and 10-year Treasury yield have risen by 54bps and 59bps to 4.15% and 4.29%, respectively.
With the U.S. elections just a week away and polls indicating a tight race, investors are closely assessing potential impacts for currency markets.
If the U.S. economy were a pop star, it might be peak Taylor Swift. On nearly every major measure of economic health, the economy is in great shape and far ahead of its developed market peers.
Housing inventories remain near record lows, yet builders are not increasing construction volumes enough to sufficiently meet demand. Why aren't builders ramping up activity?
The combination of the stimulus announcement plus cheap valuations and underweight positions resulted in a surge in net flows into Chinese equities summing up to $12.7 billion from September 24th to October 14th.
The American consumer has been resilient in the face of significant headwinds, helping keep the U.S. economy afloat and increasing the likelihood of a "soft landing". However, while aggregate consumption has remained robust, the way the consumer is spending across categories has changed since the start of 2020.
Recent years have seen a significant acceleration in clean energy investment and grid decarbonization alongside the implementation of the Inflation Reduction Act passed in August 2022.
After retracing 8.5% by early August, the S&P 500 had just about fully recovered by the end of the month, and subsequently powered to new highs after the Federal Reserve delivered a jumbo 50 basis point rate cut.
Chinese equities had a spectacular end to September, with the MSCI China up 21% from September 24th to 30th. The catalyst was the announcement of a series of economic stimulus measures focused on the housing market, domestic consumption, and the stock market.
Utilities have traditionally been known for their defensive properties, which makes the combination of robust economic growth, technological excitement and elevated bond yields an unlikely recipe for their outperformance.
Utilities have traditionally been known for their defensive properties, which makes the combination of robust economic growth, technological excitement and elevated bond yields an unlikely recipe for their outperformance.
Emerging market equities sold off along with other markets in early August. However, they have since rebounded 8%, bringing YTD performance to 11%. While China lags due to ongoing economic challenges, recent developments have sparked a small recovery.
The relative strength and direction of the U.S. dollar matters: trade balances can fluctuate, multinational corporations can see foreign sales rise or fall and U.S. dollar-denominated investors in international markets can see returns amplified or diminished.
In a highly anticipated decision, the FOMC voted to lower the federal funds rate by 50 basis points to a target range of 4.75%-5.00%, a larger-than-expected move and their first move lower since March 2020.
The change is most evident in international trade data. China's share of U.S. imports peaked at 22% in 2018 during the U.S.-China trade conflicts and sits at 11.5% as of June 2024.
The August CPI report showed further progress in inflation making its way down to 2%, setting the Fed up to begin normalizing monetary policy next week with a quarter point rate cut.
In this piece, we compare the proposals of Vice-President Harris and former President Trump across taxes, trade and immigration, and the potential market implications of different election outcomes.
Elevated public market valuations, historically low bond yields and positive stock-bond correlation are all challenges facing the traditional 60/40 portfolio. Moving forward, investors may need to rely on alternative asset allocations to enhance return, income, and diversification in their portfolios.
“The time has come” was a memorable phrase from Chair Powell’s speech at the Jackson Hole Symposium last week. After a few false dawns this year, Federal Reserve rate cuts are imminent, with the discussion now shifting to how quickly rates will come down.
Interest rate expectations have changed wildly since the start of the year. While these expectations will continue to evolve as new data are released, one thing seems clear: the Federal Reserve will begin its rate cutting cycle this year, and it will cut by more in 2024 than it had previously telegraphed.
Markets have largely rebounded from the volatility of the past two weeks. The S&P 500 has recovered 3.0% after a 4.8% decline, U.S. Growth equities have risen 4.3% following a 5.5% drop, and the VIX has settled at 20.7, after spiking to 55.1, its highest level since March 2020.
Large moves were seen in Japanese markets, which dropped 6% on Friday (8/2) and another 12% on Monday (8/5), marking the worst daily sell-off since 1987.
The Federal Open Market Committee (FOMC) voted to leave the Federal funds rate unchanged at a target range of 5.25%-5.50%, but hinted rate cuts are on the horizon.
Mega-cap tech has enjoyed a long winning streak, but the stars recently began to align for the underdogs to take the lead.
With the U.S. election approaching, potential U.S. policy changes are a key concern for global investors. After most U.S. elections, the MSCI EM Index has had positive performance in the 100 days following.
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.
Later this month will mark a year since the last rate hike from the Federal Reserve (Fed). Historically, the end of a hiking cycle should have been an opportune time to extend duration by deploying cash into high quality intermediate fixed income securities.
While French politics are somewhat unique, the New Popular Front’s victory is the second win for a left-wing party so far this month after a strong defeat of the Conservatives in the UK.
Looking to the back half of the year and beyond, lingering geopolitical uncertainty and an upcoming U.S. presidential election, coupled with the divergence in performance across assets, underscores the importance of diversification in a fundamentally uncertain world.
The “Magnificent 7” has massively outperformed the rest of the market, up roughly 30% since the start of the year compared to around 5% for the remaining companies, on AI-related headlines and strong earnings growth.
Markets have a tendency to over appreciate the near term and under appreciate the long term. We think AI will lead to all sorts of business transformation and productivity gains in the long term, but recent performance has been driven by significant upgrades in near-term AI demand projections.
The average homeowners’ insurance policy cost roughly $1,900 in 2023, up over 20% from the previous year and nearly 50% from before the pandemic.
In the May CPI report, year-over-year headline inflation cooled to 3.3% from 3.4% - down one decimal, yet the median FOMC rate forecast for 2024 moved higher by half a percent.
MORENA party’s candidate, Claudia Sheinbaum, won the Mexican presidential election with a historic margin, receiving 60% of votes. This victory was anticipated, but the scale of left-leaning MORENA's win in Congress was unexpected.
For three years, stock and bond returns have been moving in the same direction. When times are good, this is not thought of as a problem; however, when stocks sell off and bonds are not there to catch them, then investors are faced with an important portfolio construction challenge to solve.
The U.S. is the largest equity market in the world, but its weighting in the MSCI AC World Index exceeds its global equity market weighting and its projected contribution to global GDP in 2023.
While we don’t expect home prices to decline materially from here given structural dynamics, Americans that have been sidelined from being able to purchase a home over the past couple of years are perhaps hoping and waiting for at least one area of reprieve: lower mortgage rates.
If 2023 was the year for AI excitement, this year may be the year for deployment. In first quarter earnings calls, approximately 45% of S&P 500 companies mentioned AI, marking a fresh high by our measures, and their collective investments continue to climb.
Within that “super core” index, one small category (only 3% of the overall CPI basket) has been making outsized contributions: auto insurance.
2023 marked a third consecutive year of double-digit declines for Chinese equity markets. Investors are now reconsidering how to invest in that market and whether investing in Asia is about more than just China.
To understand these shifting dynamics and determine how to embrace this growing asset class, investors should consider: What’s driving the growth of private credit and the decline in high yield and, if private credit deserves a strategic allocation in a broader credit portfolio?
Following the pandemic, median home prices surged by double digits until peaking at the end of 2022. While prices are down roughly 12% since then, home affordability still sits at multi-decade lows.
At its May meeting, the Federal Open Market Committee (FOMC) voted to leave the Federal funds rate unchanged at a target range of 5.25%-5.50%.
Investors should consider trimming decade-long international equity underweights – and Asia is the key place to look for opportunities.
Private equity has been surprisingly resilient throughout the Fed hiking cycle. In 2022, PE only declined by 2%, but is now 3.2% higher than the end of 2021, compared to U.S. small cap stocks, which were 7% lower.
It’s well understood that consumption is the largest contributor to economic growth in the United States accounting for just under 70% of GDP. Therefore, to a large extent, any outlook on the economy hinges on the health of the consumer.
Investors should recognize that while geopolitical headlines have the ability to capture market attention, the shocks to sentiment are often short-lived.
Well-positioned investors could take advantage of the new era unfolding in healthcare transformation.
We expect yields to stabilize in the near term and for spreads to remain tight given still healthy credit fundamentals and strong economic activity.
2023’s so-called “everything rally” was confusing to many market watchers, given the pessimistic macro outlook at the beginning of last year. Now, a quarter into 2024, the rally has clearly continued.
The S&P 500 notched 24 new all-time highs in Q1, up 10.6%, with 2.7%-points from earnings, 7.4% from multiple expansion, and 0.4% from dividends.
While we don’t expect a recession this year, whenever one occurs, the lack of private sector imbalances suggest that it is unlikely to be a severe one.
Investors should focus on EM regions and sectors that benefit from structural, as well cyclical, tailwinds.
As widely anticipated, the Federal Open Market Committee (FOMC) voted to leave the Federal funds rate unchanged at a target range of 5.25%-5.50% at its March meeting.
Cryptocurrency investments should be made cautiously, and only as part of a much larger diversified portfolio of stocks and bonds. For investors with a long time horizon, traditional asset allocation remains an effective strategy.
While many changes are likely to emerge, one clear trend, with far-reaching macro and market implications, is the increase in leverage, says Azzarello.
The S&P 500 has marched steadily higher from its March 23rd low against a backdrop of investor skepticism. In previous posts, we have discussed how this rally is being driven by three things.
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.
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.
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.
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.
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.
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.
