Timely market commentaries from leading investment firms
Brexit and trade talks provided lots of uncertainty this year. Last week saw progress on both fronts.
Predicting a major economic or financial event—whether that’s a recession, market downturn or even your own retirement—requires that you also take action. Otherwise your prediction was meaningless.
Much of the reaction to last week’s Inflationary Angst letter boiled down to, “Get government out of the way and the free market will work.” Others said the opposite: Government must help people even more than it already does. I wish it were that easy. Neither of those options are what we need, and today I will explain why.
As widely expected, the Conservative Party emerged victorious in the UK general election. Our Colin Morton anticipates UK equity markets will welcome the outcome, but cautions that some uncertainties remain.
While the election outcome was quickly reflected in the pound exchange rate, the direction from here depends on what kind of relationship Boris Johnson really (really) wants to have with the EU. Find out more from our currency expert.
We expect to see flows back into UK equity and credit now that some of the Brexit uncertainty has been removed.
In its December forecasts, the Federal Reserve estimates that the policy rate will hold steady through 2020. Will economic and trade developments change that view?
The Federal Reserve left interest rates unchanged, as expected; while signaling rates would stay in their current range through next year.
U.S. economic activity is expected to remain mixed in 2020, with moderate strength in consumer spending and general softness in business fixed investment and manufacturing.
The Northern Trust Economics team shares its outlook for U.S. economic growth, inflation, unemployment and interest rates.
No one expected the Federal Reserve to change short-term rates today and no change was made. Meanwhile, the Fed made no significant changes to its policy statement and the statement was unanimous.
In part 2 of this series I focused on how to value slow and moderately growing businesses. In this article, Part 3, I will shift my focus on how to value faster growing companies (growth stocks).
Asia goes into the global deceleration with already-lean companies and a valuation advantage.
A review of last month’s market-moving events across countries and asset classes.
Why should investors pay attention to the China A-share market? We explain why we believe the opening of one of the most liquid and diverse markets in the world has profound implications for global portfolios.
Did you know that more than $12 trillion in assets under management are engaged in one or more strategies of sustainable investment in the United States? This comprises more than 25 percent of the professional managed assets across the country and is a 38 percent growth from 2016 figures.
Insured bonds continue to pay interest and principal even if an issuer defaults.
Health care reforms are always a popular topic of discussion ahead of a US presidential election campaign, where politicians talk about proposed changes that can be very different than the current system.
One way of thinking about the share price of a common stock is the price range as a teeter-totter. When the psychology of investors is very negative, enthusiasm for the company hits the ground. On the other end, when everyone is in love with a company’s shares, their end of the board can’t seem to get any higher. Where is the board end hitting the ground currently and who is stuck up in the air on a psychological high?
Jean highlights some key takeaways that may help you with next year’s investment decisions.
What's on the market's wish list for 2020? Chief Investment Officer Larry Adam provides a festive perspective.
Research Affiliates discusses why they believe value investing is still alive and well and explains how changes to the display of expense ratios seek to enhance clarity for investors.
“This is not QE. In no sense is this QE.” That was Jerome Powell in early October, answering a reporter’s question on whether the Federal Reserve’s intervention in the overnight U.S. repo market constituted another round of quantitative easing (QE).
Read the latest Weekly Headings by CIO Larry Adam.
The recent repo squall shined a spotlight on “sponsored repo” transactions, a growing segment of the U.S. overnight funding market.
Environmentally minded investors, take note: a controversial new bond format that links a company’s sustainability goals to its bottom line could be a game changer in building a more sustainable future.
It was a mixed month for emerging markets in November, as shifting expectations about a trade deal between China and the United States continued to drive market sentiment. Our emerging markets equity team explains why US-China trade issues may not be that big of a concern for some emerging markets, and provides an overview of the news and events shaping markets during the month.
Central bank easing and the cooling China-U.S. trade war have set the scene for a global economic rebound in 2020. Our forecast pushes the risk of recession into late 2021, giving equity markets modest upside potential for 2020.
Positive returns across asset classes in 2019 may limit tax loss selling in closed-end funds, but we see potential long term value in select sectors where investors can still buy assets at a discount.
A year ago, conventional wisdom became convinced that a stock market correction was really the beginning of a "bear market," and a sure sign that recession was on its way. Oops. Conventional wisdom was wrong again.
The U.S. economy likely will remain split in early 2020.
Nonfarm payrolls rose more than expected in the initial estimate for November (+266,000), with upward revisions to the gains for September and October (a net 41,000 higher). In contrast, the ADP estimate of private-sector payrolls rose more modestly (+67,000). What to believe?
Investors continue to question whether US equity valuations are too high, particularly for growth companies and versus other global markets. But standard valuation metrics don’t tell the whole story. Understanding the cost of capital can provide essential insight on valuing stocks.
Considering investment outsourcing? Our CFO weighs in on key and peripheral issues to contemplate.
While many risk assets have rallied in 2019, the lower-rated tranches of collateralized loan obligations (CLOs) have weakened. Is this a sign that the credit cycle is turning?
Rate cuts and overnight operations were important developments this year. Where will the Fed go from here?
While the bulls are certainly hoping the “cash hoard” will flow into U.S. equities, the reality may be quite different.
U.S. stocks continue to trade near their all-time highs but recent hiccups in trade talks have re-emphasized that a deal remains elusive, decisively unpredictable, and incomplete. Key components of the first phase have yet to be put in writing and major structural issues—such as intellectual property theft and forced technology transfers—will remain unaddressed for the foreseeable future, confirming that little-to-no material progress has been made.
One of the best ways to “supercharge” your gold position is with precious metal royalty and streaming companies. Think Franco-Nevada, Wheaton Precious Metals, Royal Gold and others.
We don’t have much time to get our house in order, either in the US or globally. Everything I’ve said today applies, to various degrees, throughout the developed world. Thinking that 2% inflation or zero interest rates coupled with massive deficits will somehow help is beyond wishful thinking.
Improvements in accessibility are expected to accelerate further inclusion in the near term.
We identified the protectionist push as a key market driver this year but we did not foresee the massive move down in global yields. Scott talks through our 2019 calls.
We aim to support wealth management firms, advisors, and investors as they assess portfolio strategy and navigate the shifting trends we face in the new year.
With borrowing costs at multi-decade lows, governments seemingly can take on much more debt without any great concern about long-term consequences. But the real risks and costs of higher public borrowing may be hidden.
While all eyes are on estimated sales throughout December, sector performance for the month is historically not impressive.
Commentaries
Timely market commentaries from leading investment firms
Problems Solved?
Brexit and trade talks provided lots of uncertainty this year. Last week saw progress on both fronts.
Expecting a Market Downturn? Make Sure You’re Following the “Noah Rule”
Predicting a major economic or financial event—whether that’s a recession, market downturn or even your own retirement—requires that you also take action. Otherwise your prediction was meaningless.
Time to Do the Hard Thing
Much of the reaction to last week’s Inflationary Angst letter boiled down to, “Get government out of the way and the free market will work.” Others said the opposite: Government must help people even more than it already does. I wish it were that easy. Neither of those options are what we need, and today I will explain why.
UK Election: Will Tory Victory Bring Investors Back to UK Equities?
As widely expected, the Conservative Party emerged victorious in the UK general election. Our Colin Morton anticipates UK equity markets will welcome the outcome, but cautions that some uncertainties remain.
UK Elections: Conservatives Win Big, Brexit Will Happen – What Kind of Brexit Is Still Unclear
While the election outcome was quickly reflected in the pound exchange rate, the direction from here depends on what kind of relationship Boris Johnson really (really) wants to have with the EU. Find out more from our currency expert.
What Boris Johnson’s Election Victory Means for UK Assets
We expect to see flows back into UK equity and credit now that some of the Brexit uncertainty has been removed.
Federal Reserve Appears Confident in U.S. Economy's Soft Landing
In its December forecasts, the Federal Reserve estimates that the policy rate will hold steady through 2020. Will economic and trade developments change that view?
Fed Holds Rates Steady, as Expected
The Federal Reserve left interest rates unchanged, as expected; while signaling rates would stay in their current range through next year.
The 2020 Economic Outlook
U.S. economic activity is expected to remain mixed in 2020, with moderate strength in consumer spending and general softness in business fixed investment and manufacturing.
Closing Strong
The Northern Trust Economics team shares its outlook for U.S. economic growth, inflation, unemployment and interest rates.
Fed on Hold
No one expected the Federal Reserve to change short-term rates today and no change was made. Meanwhile, the Fed made no significant changes to its policy statement and the statement was unanimous.
The Right Way to Value Growth Stocks: Part 3
In part 2 of this series I focused on how to value slow and moderately growing businesses. In this article, Part 3, I will shift my focus on how to value faster growing companies (growth stocks).
Troubled Times Can Give Birth to Opportunity
Asia goes into the global deceleration with already-lean companies and a valuation advantage.
Changing Speeds?
A review of last month’s market-moving events across countries and asset classes.
China A-Shares: An Opportunity in Strategic Exposure
Why should investors pay attention to the China A-share market? We explain why we believe the opening of one of the most liquid and diverse markets in the world has profound implications for global portfolios.
Advisors and Clients Walking past Each Other on Sustainable Investment
Did you know that more than $12 trillion in assets under management are engaged in one or more strategies of sustainable investment in the United States? This comprises more than 25 percent of the professional managed assets across the country and is a 38 percent growth from 2016 figures.
Insured municipals offer investors additional assurance
Insured bonds continue to pay interest and principal even if an issuer defaults.
Assessing Potential US Health Care Reforms Ahead of an Election Year
Health care reforms are always a popular topic of discussion ahead of a US presidential election campaign, where politicians talk about proposed changes that can be very different than the current system.
Teeter-Totter Stock Market
One way of thinking about the share price of a common stock is the price range as a teeter-totter. When the psychology of investors is very negative, enthusiasm for the company hits the ground. On the other end, when everyone is in love with a company’s shares, their end of the board can’t seem to get any higher. Where is the board end hitting the ground currently and who is stuck up in the air on a psychological high?
Why Should You Read Our 2020 Global Outlook?
Jean highlights some key takeaways that may help you with next year’s investment decisions.
All We Want for New Year's [INFOGRAPHIC]
What's on the market's wish list for 2020? Chief Investment Officer Larry Adam provides a festive perspective.
All Asset All Access, December 2019
Research Affiliates discusses why they believe value investing is still alive and well and explains how changes to the display of expense ratios seek to enhance clarity for investors.
Is the Fed Gearing Up for a New Round of Quantitative Easing? Here Are the Possible Signs
“This is not QE. In no sense is this QE.” That was Jerome Powell in early October, answering a reporter’s question on whether the Federal Reserve’s intervention in the overnight U.S. repo market constituted another round of quantitative easing (QE).
Weekly Investment Strategy
Read the latest Weekly Headings by CIO Larry Adam.
Salve for a Constrained Repo Market, or Potential Funding Destabilizer?
The recent repo squall shined a spotlight on “sponsored repo” transactions, a growing segment of the U.S. overnight funding market.
Beyond Green Bonds: Innovations in Sustainable Investing
Environmentally minded investors, take note: a controversial new bond format that links a company’s sustainability goals to its bottom line could be a game changer in building a more sustainable future.
Emerging Markets Record Diverse Performances in November
It was a mixed month for emerging markets in November, as shifting expectations about a trade deal between China and the United States continued to drive market sentiment. Our emerging markets equity team explains why US-China trade issues may not be that big of a concern for some emerging markets, and provides an overview of the news and events shaping markets during the month.
2020 Global Market Outlook: Cycle, Interrupted
Central bank easing and the cooling China-U.S. trade war have set the scene for a global economic rebound in 2020. Our forecast pushes the risk of recession into late 2021, giving equity markets modest upside potential for 2020.
Sifting Through the Froth
Positive returns across asset classes in 2019 may limit tax loss selling in closed-end funds, but we see potential long term value in select sectors where investors can still buy assets at a discount.
Good News is Good News
A year ago, conventional wisdom became convinced that a stock market correction was really the beginning of a "bear market," and a sure sign that recession was on its way. Oops. Conventional wisdom was wrong again.
2020 Market Outlook: U.S. Stocks and Economy
The U.S. economy likely will remain split in early 2020.
The November Employment Report
Nonfarm payrolls rose more than expected in the initial estimate for November (+266,000), with upward revisions to the gains for September and October (a net 41,000 higher). In contrast, the ADP estimate of private-sector payrolls rose more modestly (+67,000). What to believe?
The Phantom Metric: What Really Drives US Equity Valuations?
Investors continue to question whether US equity valuations are too high, particularly for growth companies and versus other global markets. But standard valuation metrics don’t tell the whole story. Understanding the cost of capital can provide essential insight on valuing stocks.
From One CFO to Another: An Insider View on OCIO Decision Making
Considering investment outsourcing? Our CFO weighs in on key and peripheral issues to contemplate.
Treading Carefully: Risk and Opportunity in CLOs and Bank Loans
While many risk assets have rallied in 2019, the lower-rated tranches of collateralized loan obligations (CLOs) have weakened. Is this a sign that the credit cycle is turning?
Ending a Busy Year for the Federal Reserve
Rate cuts and overnight operations were important developments this year. Where will the Fed go from here?
The Myth Of The “Great Cash Hoard” Of 2019
While the bulls are certainly hoping the “cash hoard” will flow into U.S. equities, the reality may be quite different.
Are We There Yet?
U.S. stocks continue to trade near their all-time highs but recent hiccups in trade talks have re-emphasized that a deal remains elusive, decisively unpredictable, and incomplete. Key components of the first phase have yet to be put in writing and major structural issues—such as intellectual property theft and forced technology transfers—will remain unaddressed for the foreseeable future, confirming that little-to-no material progress has been made.
Supercharge Your Gold Position With Precious Metal Royalty Companies
One of the best ways to “supercharge” your gold position is with precious metal royalty and streaming companies. Think Franco-Nevada, Wheaton Precious Metals, Royal Gold and others.
Inflationary Angst
We don’t have much time to get our house in order, either in the US or globally. Everything I’ve said today applies, to various degrees, throughout the developed world. Thinking that 2% inflation or zero interest rates coupled with massive deficits will somehow help is beyond wishful thinking.
What's Next for China A-Shares Inclusion in MSCI Indices
Improvements in accessibility are expected to accelerate further inclusion in the near term.
Taking Stock of Our 2019 Views
We identified the protectionist push as a key market driver this year but we did not foresee the massive move down in global yields. Scott talks through our 2019 calls.
Navigating U.S. Wealth Management: Seven Ideas for Financial Advisors and Individual Investors in 20
We aim to support wealth management firms, advisors, and investors as they assess portfolio strategy and navigate the shifting trends we face in the new year.
Government Debt Is Not a Free Lunch
With borrowing costs at multi-decade lows, governments seemingly can take on much more debt without any great concern about long-term consequences. But the real risks and costs of higher public borrowing may be hidden.
’Tis the Season for Consumer Discretionary … or Not?
While all eyes are on estimated sales throughout December, sector performance for the month is historically not impressive.