The first half of 2020 was dominated by the COVID-19 pandemic, which hit the municipal bond market hard. State and local governments experienced a sharp and sudden drop in revenue, and an increase in expenses, amid stay-at-home orders and business shutdowns.
We believe the risk that preferred-stock dividends will be suspended is low despite the recent announcement by the Federal Reserve that it is requiring banks to cap their common stock dividends.
While no one is ever really comfortable losing money, we often hear from investors that they are most uncomfortable when it seems that the stock market isn’t making any sense whether it’s heading up or down. In order to help try to make sense of it all, let’s take a look at where the stock market makes sense right now and where it doesn’t.
COVID-19 headlines dominated equity market action last week, with the S&P 500 suffering a near-3% decline; although all is not grim. The number of virus cases has been spiking in states that opened earliest—including my new home state of Florida, which went from a mid-60s average age for confirmed cases to the current mid-30s average age.
Investors should consider these various investments—cautiously. Given the challenging economic outlook and high level of uncertainty, we believe bouts of volatility are possible, albeit not to the level witnessed in February and March.
A second wave of global COVID-19 is getting a lot of media attention, but the appearance of a global second wave of cases is primarily driven by the different timing of first waves across countries—rather than second waves within countries.
As the economy reopens from COVID-19 restrictions, a question looms: What will colleges and universities look like come fall? Will students return to a more normal on-campus learning experience, some form of online experience, a combination of both … or will they simply not return?
Economies and markets whipsawed in the first half of 2020. Here’s what we expect for the rest of the year.
Returns for most fixed income asset classes are positive so far this year, but the numbers mask the rocky road markets have traveled since January.
Investors often think of municipal bonds, which are sold by local and state governments to fund public projects like building new schools and repairing city sewer systems, as being totally tax-free—but that’s not always the case.
Why did stocks rise over the past month despite grim economic news? The Federal Reserve’s massive liquidity injection is one reason.
As expected, the Federal Reserve kept rates unchanged at 0-0.25% and said it will keep them near zero through at least 2022, in a unanimous vote.
In our 2020 Global Market Outlook, we cited many indicators pointing to heightened risk of a recession; now we highlight increasing signs of a recovery from one.
The dominant question we’ve been getting from investors is about the perceived disconnect between what’s happening on Main Street and what’s happening on Wall Street.
There may be something amiss with the stock market rebound. Ahead of any meaningful improvement in economic data, global stocks have gained about 30% over the past two months from their low on March 23, as measured by the MSCI World Index.
When the COVID-19 crisis shook markets in March, the Federal Reserve moved early and aggressively to help increase liquidity in financial markets.
On a day that started with good news on an experimental COVID-19 vaccine, with the stock market showing strong early gains, today’s report is more visual and less wordy than normal. Since I know not every reader of these publications follows me on Twitter—where I’m constantly posting charts, tables and data that I find compelling...
It is becoming increasingly clear that the massive global stimulus is being financed by a rise in money, not debt.
Negative corporate news and economic data buffeted stocks, after markets racked up wins in April.
Both the bear market and subsequent rally have occurred at warp speed; yet the economic recovery may be disappointing to what the market’s now “priced in.”
The FOMC restated its commitment to use its full range of tools to support the virus-crippled economy and keep markets functioning smoothly.
A lot has happened in the month following global stocks’ low on March 23, as represented by the MSCI All Country World Index. Nearly every major country seems to have put the peak in new COVID-19 cases behind them by several weeks and the discussion has now turned to the timing and staging of re-openings.
Coronavirus-related stay-at-home orders and falling consumer demand have been extremely challenging for small businesses. If you’re a small-business owner, make sure you’re taking advantage of the help that’s available.
The effects of COVID-19 have been tough on the Energy sector, to say the least. With businesses around the global shuttered and vacations called off—and an estimated 40% of the global population ordered to stay at home—demand has fallen sharply. And that has taken both the price of oil and energy stocks down with it.
With the U.S. corporate default rate likely to rise, a growing number of investors may be wondering what they should do if their bond issuer is unable to repay its debts. Unfortunately, the answer isn’t always straightforward. There are, however, several things corporate bond investors should know.
Oil prices fell below zero on Monday for the first time in at least 155 years, dragging major stock indexes down, as well. West Texas Intermediate crude oil prices fell to -$37.63 per barrel during trading on Monday...
Stocks and earnings don’t always move in tandem; with stocks typically leading earnings … but is the market’s rally too much, too soon?
The COVID-19 pandemic has severely affected the U.S. economy, with containment efforts leading to widespread business closings and surging unemployment—and stock market volatility. The key questions now are when can the economy reopen, and what happens when it does?
Weak data revived investor concerns about the economic impact.
While the COVID-19 crisis is far from over, we expect central bank and government policies to be key to performance in the second quarter.
The most widely used measure of economic activity, gross domestic product (GDP), will soon be released for the first quarter by different countries.
Labor market data has never looked as ugly, with more hits to come; but many are looking ahead at what an eventual recovery will look like.
U.S. stocks ended lower Friday, capping a volatile week of swings both higher and lower, as investors reckoned with the increasing evidence of the COVID-19 pandemic’s economic toll.
Stocks dropped on Wednesday as investors focused on growing fears about the human and economic toll of COVID-19. The S&P 500 index lost 4.4% on Tuesday, and at the close of trading was down about 27% from its February peak.
In a typical recession, the global economy tends to have large imbalances that take a long time to unwind, such as a housing bubble or overinvestment by businesses. This time the global economy is experiencing a shock, rather than the natural end result of a slow build-up of excesses.
Schwab experts share their perspectives on how the legislation may affect individuals and markets.
We know a lot more about COVID-19 than we did a few weeks ago; but there remain questions that are unanswerable at this stage. We don’t know how much worse this gets before it starts to get better...
U.S. stocks fell again on Friday, ending another volatile week, as coronavirus fears outweighed central bank and government attempts to support the economy. The S&P 500 index fell 4.3% on Friday, and is now down 31.9% from its February peak.
As COVID-19 spread around the world in the early months of 2020, governments enacted quarantines, travel bans, school closings and other measures. Global supply chains were disrupted. Reduced demand is weighing on many industries, starting with travel, hospitality and leisure. Oil prices dropped after Saudi Arabia boosted production, in effect launching a price war with Russia. U.S. Treasury yields fell to record lows.
In a surprise move on Sunday night, the Federal Reserve cut its short-term interest rate to the 0% to 0.25% range and announced a series of moves to address the economic threat posed by the novel coronavirus. The central bank used a full range of its potential policies to support the economy and financial system.
Stocks rebounded on Friday, ending a week of wide swings that drove major U.S. stock indexes into bear-market territory. Overall, it was a rough week for the stock markets.
Stocks have plummeted this month as investors struggled to assess what impact the COVID-19 coronavirus may have on the economy.
U.S. stocks fell again on Wednesday, with the Dow Jones Industrial Average closing in bear market territory.
U.S. stocks plummeted on Monday, with the S&P 500 index closing down 7.6%, its worst day since 2008, capping two weeks of extreme volatility amid the spreading coronavirus epidemic.
In the easiest of times (are they ever, really?) it’s futile to make predictions about the market with any semblance of accuracy. Clearly, these are not the easiest of times; so the futility is magnified. Even with non-stop coverage of COVID-19; with every question answered, there’s another question to ask.
The coronavirus outbreak has affected global supply chains, consumer demand and interest rates. In response, we’re downgrading Financials and upgrading Utilities.
Despite lower prices and higher relative yields, there’s room for prices of high-yield bonds, preferred securities and bank loans to fall further.
In a surprise move, the Federal Reserve on Tuesday lowered the target range for the federal funds rate, its key benchmark interest rate, by 50 basis points,or half a percentage point, to a new range of 1% to 1.25%. The reasoning behind the move was concern about the “evolving risks” to the economy posed by the coronavirus.
Rather than trying to call the bottom, a more effective way to think about investing right now is to focus more on the duration rather than the decline. Markets may have further to fall, but they may not stay down for the rest of the year barring a severe pandemic.