Slower growth. Rising rates. More volatility. 2019 looks to be a year that could be challenging for investors. Yet we believe the markets offer a range of opportunities, and we are finding a number of investment ideas for our clients.
- Investment Insights
Domestic equity markets ended the month of November in positive territory, despite continued volatility that was introduced by the previous month’s sell-off.
Investors have been predicting the end of the current bull market for years, but it’s continued to age well. From 2009 through 2017, the total return of the S&P 500 Index was positive every year.
U.S. Federal Reserve tightening, trade wars, China uncertainty, Italy and Brexit imply 2018’s volatility should continue into 2019. Our models indicate the U.S. recession danger zone is 2020, which gives equity markets some upside. But late-cycle risks are rising.
On this week’s podcast (recorded December 6, 2018), Tim discusses the recent drawdown in US equities and the associated volatility.
The equity market was generally kind to investors during the first three quarters of 2018. Then October hit. Volatility was back. Technology stocks were pummeled. Each day seemed painful for investors. However, advisors are standing their ground despite recent market volatility.
The municipal bond market weakened during the third quarter, as a change in supply and demand patterns made it more vulnerable to rising interest rates. While new issuance increased during the quarter, year-to-date it remained significantly below the same nine-month period in 2017.
The surging US economy and stock market have left international markets behind, with the S&P 500 Index beating the MSCI EAFE Index1 by 7.1% per year for 11 years. But US equities don’t always outperform the rest of the world, and the potential of international equity returns shouldn’t be overlooked.
Understanding the current—and potentially future—state of the global economy helps investors put market movements into context. To promote that understanding, researchers from Vanguard Investment Strategy Group examine the economic trends that affect the investing environment in this new series. Below are their latest insights into Global Macro Matters.
As the global economy enters its tenth year of expansion following the global financial crisis, concerns are growing that a recession may be imminent. Although several factors will raise the risk of recession in 2019, a slowdown in growth—led by the United States and China—is the most likely outcome. In short, economic growth should shift down but not out.
Last week, the US experienced a deepening split in political leadership, which dominated headlines. And yet, that was just the tip of the iceberg in terms of events that are impacting global markets.
On the latest edition of Market Week in Review, Russell experts discussed the impact of U.S. midterm elections on markets, key takeaways from the U.S. Federal Reserve (the Fed)’s recent policy meeting and October manufacturing activity levels from around the globe.
Now that the US mid-term elections are behind us, it is a good time to reflect on the potential implications for an asset class that might not spring to mind: emerging markets equity.
We maintain a risk-on stance in U.S. equities, as the near-term risk of a recession remains low. Investors with a cautious outlook can take steps to improve outcomes at the end of the market cycle.
This year has provided a wake-up call to fixed income investors that, yes, interest rates can rise and they can rise quickly. While the sharp increase in Treasury yields dented total returns on diversified fixed income portfolios, we believe it will still be possible to earn good returns over the next few years.
The U.S. equity bull market is over nine years old, but continues to grind on thanks to stronger sales and the reduced corporate tax rate. While the rally is undoubtedly long in the tooth, we don’t expect it to die of old age.
Nine years into what may turn out to be the longest economic expansion in U.S. history, we are starting to see signs that a recession may finally be on its way. Interest rates are on the rise, and the U.S. Treasury yield curve is flatter. We see no reason to dramatically shift one’s investment approach at this stage, but we are beginning to make changes to our strategies to prepare for the end of the cycle.
The 2018 mid-term elections were one of the most highly-anticipated mid-terms in recent history. As we digest the results and understand the new landscape, here are some initial thoughts on the potential impacts to the markets.
Going into yesterday’s midterm elections, our base case scenario was that Democrats would take the House while Republicans would retain the Senate. That has come to fruition, and has had an initially supportive effect on markets, with US stocks and bonds supported and the dollar weaker.
From an economic and markets perspective, the election results probably matter less than many think. Rising federal debt and deficit levels will limit Washington’s ability to accomplish much over the next two years.
Investor angst over the sustainability of earnings growth and the impact of trade tensions has pummeled equity markets. The U.S. midterm elections and their aftermath represent another catalyst that should be on investors’ radar, we believe.
On the latest edition of Market Week in Review, Russell experts discussed the ongoing volatility in markets, the U.S. GDP growth rate for the third quarter and the European Central Bank (ECB)’s plans for ending quantitative easing.
The domestic equity markets fell sharply in October amidst high volatility, with big swings day to day, and in some cases, intraday. After leading the way up over the last six months, the growth indices led the way down in the reversal, driven by steep losses in the largest technology names, such as Amazon and Netflix, both down roughly 20%.
Read the newest Strategas Insights for insight on the upcoming elections, Fed policy, trade with China, and other key factors affecting the US economy in the near term.
Does the stock market still have more to give? Geopolitical concerns are undeniable. Many equity market valuations appear to be expensive. Despite those truths, our manager research team has found that equity managers are generally bullish.
Investors continuously look for an edge, seeking to maximize returns relative to risks. Favored strategies change cyclically, or trend during certain market environments, but one has always been in style: value investing.
Understanding the current—and potentially future—state of the global economy helps investors put market movements into context. To promote that understanding, researchers from Vanguard Investment Strategy Group examine the economic trends that affect the investing environment in this new series.
The key question on investors’ minds is: Is this over? Or will stocks lose more ground? Before we can gauge the likelihood of this sell-off continuing, we must understand its origins.
Perhaps more than any other sport, baseball is famous for statistical analysis, and there are seemingly endless ways to evaluate every player. Similarly, there are many ways to evaluate stocks, and different portfolio managers assemble their “teams” using a variety of methods.
Read the latest commentary from Envestnet and Strategas for insight on monetary policy, trade tensions, and other key factors affecting the US economy in the near term.
On the latest edition of Market Week in Review, Russell Investments discussed possible factors behind the recent sell-off in global equity markets and what the road ahead may look like for investors.
Recessions are usually triggered by events that are largely unpredictable in advance. A careful review of the evidence shows that the onset of the next recession cannot be predicted by how long the current expansion has lasted.
The U.S. Federal Reserve (the Fed) is settling into a quarterly tightening routine that could see the federal funds rate rise above 3%. Even so, the upside for the U.S. dollar looks limited given its expensive valuation and crowded long positions.
On Wednesday, US stocks fell dramatically, with the Dow Jones Industrial Average falling more than 800 points. The rout was led by technology stocks, with the NASDAQ Composite Index down 316 points, but all sectors experienced losses.
The value of the U.S. dollar has climbed since April, and its rise has been one of the biggest drivers of asset performance in 2018. The stronger dollar is both a consequence of, and catalyst for, tighter financial conditions.
The three themes from our midyear investment outlook still ring true as the fourth quarter of 2018 kicks off: a widening range of growth outcomes, tighter financial conditions and a rising need for portfolio resilience.
As we round into the final months of 2018, Nuveen’s Global Investment Committee (GIC) and Nuveen’s Solutions team believe that the investment world remains in a “risk on” mode.
Municipal bonds have historically appealed mainly to investors subject to U.S. federal and state income taxes. However, investors not subject to these taxes, such as non-U.S. investors, are showing increasing interest in the asset class.
The desire to structure and manage client portfolios is oftentimes part of the advisor's value proposition. Selecting investments and being responsible for those decisions can be a worthwhile endeavor. But how effective is it in the long run?
A new study suggests that earning wealth through the stock market may be better accomplished by focusing on slow and steady long-term growth, rather than chasing top-tier performance.
In this episode of The Bid, Kate discusses how to build resilience into portfolios, why tech still has room to run and why she’s still a champion of emerging markets.