Our detailed analyses and expectations for U.S. and global markets – including regular outlooks for the beginning of the year and midyear updates – will help you decipher domestic and overseas market surges, slumps, signals, and surprises.
2022 was one of the worst years for U.S. stocks and bonds, as inflation spiked to a four-decade high. Looking ahead, the key issue for investors is whether Fed tightening will spawn a U.S. recession. Fort Washington’s Senior Economic Advisor Nick Sargen shares a 2023 outlook for the economy and how we are positioning investment portfolios.
Nearly two thirds of economists foresee a U.S. recession in 2023, according to a recent Wall Street Journal survey. Economists are skeptical that the Federal Reserve can keep raising interest rates to cool inflation without causing businesses to lay off workers.
For the first time in the post-war era, the global economy has been buffeted by two shocks—the worst public health disaster in one hundred years combined with Russia’s invasion of Ukraine. What should investors do amid the heightened uncertainty?
COVID-19, international war, and inflationary concerns have all created a ripple effect through the stock market and the economy. It’s still uncertain whether the United States will fall into a recession; however, looking at certain trends from our history allows us to gain insight on what we may expect in the near future.
At a time when both U.S. stocks and bonds have sold off significantly, the U.S. dollar has exhibited considerable strength against most currencies. Thus far, U.S. policymakers have not expressed concern about the dollar’s strength, as it helps to temper high inflation. But, it could become an issue if a deteriorating trade imbalance weakens the U.S. economy at some point.
Many investors feel considerable uncertainty about what to do with their portfolios. Weakness in markets can be unsettling, but investors should avoid short-term decisions that may compromise long-term goals and objectives.
Periods of market volatility are often reminders for investors to ensure investment strategies and risk tolerance are properly aligned. In this episode, we discuss recent market volatility, its implications for investors, and considerations for portfolio positioning going forward.
The impacts of Russia’s invasion of Ukraine have added unease to already volatile financial markets. Investors grappling with higher inflation and Fed tightening are now faced with further uncertainty that will undoubtedly keep financial markets on edge.
The average 30-year fixed-rate home loan has increased to 3.6% from 3.1% at the end of last year, which is the highest level since the coronavirus pandemic struck two years ago. This raises the question about how the U.S. housing market would respond to ongoing Fed tightening.
Looking at the year ahead, several questions remain. Will the coronavirus pandemic finally be reined in? How will bond yields fare as the Federal Reserve tightens monetary policy? And, will risk assets continue to outperform?
Investors do not appear rattled by inflation news, and 10-year Treasury yields are little changed at just over 1.5%, implying investors are willing to accept a negative real yield of more than 2 percent to hold government debt.
Even though we see the economic outlook as generally favorable after a strong stock market run and re-opening activity, we recognize that market volatility may increase, and some investors may be turning cautious—due to a variety of risk factors.
The logic is that the over long periods the valuation of the stock market should mirror the performance of the economy. However, there can be significant deviations in the interim owing to cyclical forces.
Since Xi Jinping became China’s leader in 2012, he has taken steps to reverse the trend of allowing China’s communist system to evolve into a more market-oriented model in which private businesses coexist alongside state-owned enterprises.
Investors have faced a nearly 40 basis point drop in Treasury bond yields over the past month. Two competing explanations have been put forth, and it is important to understand both because they have different implications for financial markets.
The bottom line is that in addition to their inherent risks, cryptocurrencies now face added regulatory burdens. For these reasons, we believe privately issued digital currencies should be considered speculative instruments.
The $1.9 trillion COVID stimulus plan has been greeted enthusiastically by investors as the U.S. stock market has set record highs. However, with the U.S. budget deficit reaching extreme levels, some economist are concerned the U.S. economy could overheat and lead to inflation.
The U.S. economy made huge strides in recovering from business shutdowns but without the slowing of COVID-19 the economy is still not out of the woods. Our Senior Economic Advisor reflects on the third quarter, previews what’s on the horizon for the balance of 2020, and expands on possible changes in fiscal policy if Biden wins the November elections.
Joe Biden intends to unwind key provisions of the Tax Cuts & Jobs Act to finance new initiatives as promised during his campaign. Surprisingly, thus far, the stock market has not reacted even though Republicans have decried the proposal and polls show Biden with a decisive lead. This article explains why.
Investors need to weigh whether a slimmed down stimulus bill or no bill would threaten economic recovery. Read why Nick Sargen says that the recovery is unlikely to be derailed in either event as long as there aren't widespread shutdowns of businesses.
There is a high degree of uncertainty about how the economy will fare in the balance of 2020 and into 2021. Many investors are upbeat that it is headed for a quick recovery, but most economists believe recovery will be gradual and uneven following an initial bounce. What weighs on Fed officials is the possibility of a second wave of coronavirus cases that could hinder the re-opening of businesses.
The May jobs report surprised many investors who were prepared for a large increase in the jobless rate. While the news was a relief to the Federal Reserve, the numbers underestimate the full impact of COVID-19 on labor. Even though the U.S. stock market is back to levels before the pandemic, the path to recovery is still unclear.
Small businesses have been significantly affected by the lockdown due to the coronavirus pandemic. The federal government has prioritized these businesses, passing a second bill supplementing the Paycheck Protection Program (PPP). However, opinions on PPP vary. In the first quarter, many larger cap stocks outperformed small cap stocks, but small caps have shown signs of recovery.
While the U.S. stock market reversed about half of its prior sell-off, it is likely to remain volatile. There is considerable uncertainty about how long it will take to reopen businesses fully and how severe the fallout of coronavirus will be on the global economy and commodity prices.
Investors are now assessing when recovery will begin and what shape it will take, posing the question: What lies ahead? The answer hinges on the spread of the coronavirus and how quickly businesses and jobs can be restored.
The conflict over oil and growing worries about COVID-19 marks the first time the global economy experienced simultaneous supply shocks. Markets are now signaling a tipping point has been reached with the global economy on the cusp of recession.
Investor sentiment about the coronavirus has shifted as the virus spreads. While forecasters have been lowering projections for global growth in 2020, we see a U.S. recession as unlikely and are positioning balanced portfolios close to their strategic allocations.
The U.S. stock market’s surge since October has been linked to the Fed’s balance sheet expansion, but the main driver is expectations that the global economy will improve. The coronavirus scare is posing a test that will likely be temporary.
With the S&P 500 Index up by 380% since the bull run began in March 2009, investors are wondering what can stop it. This commentary examines the usual suspects – risk of higher interest rates and recession – as well as uncertainty about the upcoming elections.
Fed-fueled investor optimism could be overstated and running head long into slowing earnings growth and reignited trade war tensions. This article cuts to the chase on the major drivers and potential obstacles for today’s markets.
Theresa May’s decision to call an early election as Prime Minister has come back to haunt her: Labor Party leader Jeremy Corbyn mounted a credible campaign that denied the Conservative Party a parliamentary majority.