Volatility/Downside Protection

The tightrope walker has his blindfold off, the wind is blowing, and it’s a long way down. Technically speaking, high-yield bond prices broke downward through a “double bottom,” which could reasonably be taken as an indicator of coming trouble for the stock market as well, given the greater wariness among bond market investors this year.

The price of Regular and Premium are down two and one cent, respectively, from last week. According to GasBuddy.com, California has the highest average price for Regular at $3.15 and Oklahoma has the cheapest at $1.79. The WTIC end of day spot price closed at 38.56, down 2.2% from last week.

The headline number of 100.9 was a decrease from the final reading of 101.3 for August. Today's number was above the Investing.com consensus of 102.0.

When it comes to reading things online, we have a selective attention span; this is why it’s so important to optimize subject lines in both blog posts and your email marketing.

The latest new orders number at 1.9% month-over-month (MoM) was better than the Investing.com 0.5% estimate. The series is down 1.9% year-over-year (YoY). If we exclude transportation, "core" durable goods was up 0.8% MoM, which was better than the Investing.com consensus of 0.4%. The core measure is up 1.7% YoY.

The primary goal of this article is to explain what makes dividends different. Dividends provide investors with a growing stream of income that is largely independent of market volatility. On balance, dividends are a powerful financial planning tool many retirement models seem to neglect.

"Travel on all roads and streets changed by -12.3% (-35.3 billion vehicle miles) for August 2020 as compared with August 2019. Travel for the month is estimated to be 251.3 billion vehicle miles." The 12-month moving average was down 1.1% month-over-month and down 8.8% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) was down 1.19% month-over-month and down 9.9% year-over-year.

We would like to think that investing is a science, but, alas, it is not. Water freezes at 32 degrees. Light travels at 186,000 miles per second. We look for similar rules in investing. There are none.

Corporate bonds are riskier than Treasury securities. The reward for accepting this risk is larger when spreads widen, but may be less than investors expect when spreads are modest.

My 2007 book, Wise Investing Made Simple: Larry Swedroe’s Tales to Enrich Your Future, contained 27 tales to educate investors about important investment concepts and strategies. This article is in the spirit of those tales.

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for September new residential housing starts. The latest reading of 1.415M was below the Investing.com forecast of 1.457M and a decrease from the previous month's revised 1.388M.

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for September new residential building permits. The latest reading of 1.553M was an increase from 1.476M in August and below the Investing.com forecast of 1.520M.

Sending a ballot by mail may seem straightforward, but the rules can be complex. Brian Horrigan explains some of the challenges associated with mail-in voting.

Led by some further moderation in the growth of production- and employment-related indicators, the Chicago Fed National Activity Index (CFNAI) declined to +0.27 in September from +1.11 in August. Three of the four broad categories of indicators used to construct the index made positive contributions in September, but three of the four categories decreased from August. The index’s three-month moving average, CFNAI-MA3, moved down to +1.33 in September from +3.22 in August.

Across emerging markets, growth in e-commerce accelerates as the pandemic reshapes consumers' shopping patterns.

Today I want to discuss why the economy will recover, how that will happen and what it will look like. It won’t look like 2019, but the recovery will have its own flavor as we fast-forward future industries. I think that’s a good thing.vvv

In this short Q&A, Teresa Kong, Portfolio Manager, provides her insights on the economic impact of the coronavirus and where she sees risks and opportunities, and why the current prices could represent a once in a decade opportunity to buy Asia high yield.

We are earlier than usual this month because of the upcoming presidential election. See why a US constitutional crisis could unfold in the days and weeks to come if Trump delivers on his earlier ‘promise’ not to accept the outcome, should he lose on the 3rd November.

While there is a lot of uncertainty about the outcome of the upcoming US presidential election, the process will remain intact regardless of who wins. Brian Horrigan shares a refresher on the Electoral College.

With the coronavirus largely under control in China, we have an opportunity to consider what the post-COVID investment environment there might look like.

Canada’s central bank looks to evolve its policy framework amid concern over disinflationary trends.

• Without statistical support, political party and tax regime changes have not translated to discernable market performance.
• Global fiscal and monetary stimulus during COVID already far surpass what the world saw during and after the Great Recession.
• Equity and credit markets domestically and abroad continued to shrug off headlines, helping recoup some if not all of the losses from earlier this year.
• Anchored short-term interest rates helped investment grade fixed income yet another quarter.

Markets have continued to rally despite the ongoing economic impact of the pandemic and the uncertainty of the upcoming U.S. election. We’re expecting increased volatility in the near term, and we think a cautious approach is the best course of action.

U.S. Treasury bonds are not likely to repeat their spectacular performance as income-producing risk reducers in portfolios of the past four decades. While bonds still have an important role to play in some settings (e.g., liability hedging for retirement plans), we believe investors should look at alternatives for diversification, including inflation-protected securities, gold, defensive currencies and stocks and option protection.

Emerging-market debt has rebounded sharply off March lows, but attractive yields and compelling opportunities persist. We provide a roadmap for what may lie ahead.

Amid a global pandemic and continued U.S.-China trade tensions, quality-growth companies remain strong performers. Portfolio managers Sharat Shroff, CFA, and Inbok Song discuss the opportunity set for growth investors.

Investor sentiment is telling a mixed story about the market’s ascent since the March low; begging the question, will the skeptics converge with the optimists?

Markets continued their recovery during the 3^rd quarter, but the narrative transitioned from concerns about the pandemic to the U.S. election – a trend that we expect to continue in October. The outcome will likely have a material impact on both fiscal stimulus policies and Treasury yields.

We have a light economic calendar with a focus on housing. There are continuing political and pandemic stories that could dominate the news cycle at any time. For those focused on financial markets, earnings season might provide answers to important questions.

The massive surge in passive strategies' popularity has pushed the market to the brink of instability. Instability can result in price surges to unprecedented valuations.

Financial advisors routinely adhere to the discipline of rebalancing portfolios, so much so that they invest tens of thousands of dollars in software to automate the process. That adherence has been regularly reinforced by financial writers. I show why this conventional wisdom is wrong and rebalancing may be as unwise an investment as the software used to do it.

Here in the U.S., I estimate that the actual number of people infected by SARS-CoV-2 to-date is currently just over four times the number of reported cases. Actual cases are undercounted partly because, based on very large-scale, unbiased testing, roughly 45% of people who acquire SARS-CoV-2 infection are asymptomatic.

In the last few weeks stock market sentiment as expressed in options has come full circle. Back in August we were noting a rather amazing level of outright speculation in stock options, mostly by small traders that were buying short-dated out of the money calls on the FAAMGs.

“Resilience” was this week’s theme as better-than-expected market data came to light. Earnings season has begun, and so far reports have proven the doomsayers wrong. Even industries that have been hardest hit by the economic downturn, including air travel, are expressing optimism that we’re at the “end of the beginning” in terms of recovering from the worst health crisis in 100 years.

Month-over-month nominal sales in September increased by 1.91%. Real Retail Sales, calculated with the seasonally adjusted Consumer Price Index, increased by 1.70%.

Actual third-quarter earnings may be less important than what business leaders say about their expectations.

Given current low yields, some investors wonder whether bonds can continue to provide diversification in a portfolio. Here’s why those fears may be overblown.

The Census Bureau's Advance Retail Sales Report for September was released this morning. Headline sales came in at 1.9% month-over-month to one decimal and was above the Investing.com forecast of 0.7%. Core sales (ex Autos) came in at 1.5% MoM.

Euro-area countries were struggling to achieve growth and inflation even before the coronavirus pandemic. Now global lockdowns and trade disputes have compounded their problems. Still, we believe euro fixed-income markets offer active investors attractive opportunities and worthwhile income.

The latest Manufacturing Index came in at 15, down 2.2 from last month's 17.2. The 3-month moving average came in at 18.8, down from 21.0 last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook came in at 56.6, up 17.8 from the previous month's 38.8.

Markets are facing choppier waters, but the backdrop for risk assets remains positive.

Investors should consider many angles when evaluating what active managers can offer through a global crisis and an indefinite period of uncertainty.

Our Dina Ting offers three reasons she and her team believe the case for international markets is once again strong, and opines on how recent market events have created new—or amplified existing—opportunities for investors to express views on specific countries.

The transition toward a more sustainable energy system presents potential opportunities for investors. We explore what those opportunities are, and identify potential watchpoints.

Passive investing continues to gain share at the expense of active. In doing so, however, it is also substantially increasing systemic risk.

Third-quarter revenue from buying and selling stocks and bonds increased 29%, driven by a 49% surge in fixed-income trading.

Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.

Here is a table showing the annualized change in Headline and Core CPI, not seasonally adjusted, for each of the past six months. Also included are the eight components of Headline CPI and a separate entry for Energy, which is a collection of sub-indexes in Housing and Transportation. We can make some inferences about how inflation is impacting our personal expenses depending on our relative exposure to the individual components.

The potential economic and market impacts a “Blue Wave” for the U.S. election could have on five key areas: taxes, labor, the environment, oil and trade.

There’s more consensus than usual over the likely winner of the U.S. presidential election. After that, there’s plenty of disagreement on strategies to wager on an election that’s been flashing warnings of chaos ahead in volatility markets.

Flows into U.S. fixed-income products this year have surpassed the total for all of last year.

The headline number for September came in at 104.0, up 3.8 from the previous month. The index is at the 90th percentile in this series.

It is well-established that “lottery” stocks – those offering the potential for outsized returns, like penny and growth stocks – deliver poor performance. While one might expect that naïve, retail investors are the ones buying those stocks, new research shows that is not the case.

We compare fixed annuities to other safe investments, such as CDs and Treasury securities, to better understand whether they provide attractive risk-adjusted performance and are a reasonable alternative for risk-averse investors.

The U.S. presidential election is adding to market angst. How much do politics matter in the long run? Tony DeSpirito answers in this one-minute read.

I can’t wait until the election is over so that these horrible election year clichés will disappear.

Emerging markets have had different approaches to coping with COVID-19 and are at different stages of recovery. Our emerging markets equity team examines trends, news and data shaping emerging markets in the third quarter, and shares its latest outlook.

To some critics, Trump’s behavior and decision-making process may seem erratic, but I believe they make a sort of sense when viewed through the lens of game theory.

Shares of renewable-energy companies expected to benefit from Biden’s energy policy plans have surged.

The economy is at a crossroads and this commentary addresses why it’s critical to acknowledge the risks, as well as providing some specifics on how to deal with those uncertainties.

The transportation sector in the municipal bond market faces significant headwinds as a result of the COVID-19 pandemic.

Market update from BlackRock's municipal bond team.

Domestic equity markets have certainly shown a significant amount of movement thus far through 2020, with the S&P 500 Index SPX undergoing its swiftest decline from all-time highs in March, only to rally over the next few months to print new all-time highs at the beginning of September.

Across emerging markets, urban consumption provides ballast and stability to a number of sectors and industries.

Given elements of uncertainty tied to COVID-19, geopolitics and policy decisions to come in the United States and across the globe, our K2 Advisors team believes the current environment may favor nimble, shorter-term strategies.

The Mexican ESG ETF has been one of the company’s most successful out of 40 new ESG products launched this year.

A famous Wall Street bear-turned-bull is urging clients to double down on V-shaped economic bets, even as talks on fresh stimulus collapse.

Here’s my take on the six worst pandemic clichés that advisors keep using, which are ruining their credibility.

High-yield bonds can generally offer more income in a very low-interest-rate world. However, if the economic or stock market outlook deteriorates, it could be a bumpy ride.

Variable annuities were created to give retirees access to lifetime income with the potential for growth. Today’s products offer a range of features such as liquidity, investment risk hedging, access to a risk premium, tax deferral, and longevity protection. This panel address the tradeoff of these product features and when they provide the greatest value to retirees. The best variable annuities offer reasonable-cost options that provide income, investment flexibility and downside protection when clients need them most. CFP and IWI CE credits pending.

The pandemic has amplified four long-term macroeconomic disruptors, and fiscal policy – a key swing factor – may hold the key to upside or downside surprises. Read our long-term outlook and learn implications to consider when investing.

The moving average for the per-capita Light Vehicle Sales series peaked in 1986. Thirty-plus years later, it is now down 40% from that 1986 peak.

As of September 30, the 10-year note is 17 basis points above its historic closing low of 0.52%, reached on August 4.

Let's take a closer look at Friday's employment report numbers on Full and Part-Time Employment.

With the Q2 GDP Third Estimate, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 171.7%, up from 124.7% the previous quarter.