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Economy & Markets
Knowledge of the economy and markets is essential to informed investing. In broad terms, an economy comprises the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services. Financial markets refer broadly to any marketplace where the trading of securities occurs, including the stocks, bonds, currencies, among others. These articles could help broaden your understanding.
We believe we can add value by adjusting portfolio weights in response to changing market conditions and in anticipation of changing fundamentals. History demonstrates that risk assets move through repeated boom and bust cycles. While the economic cycle influences these cycles, they do not necessarily overlap with the risk asset cycle.
Crit Thomas, CFA, CAIA, Erik M. Aarts, CIMA, Brian Cheyne, CFA, CIMA
“The U.S. Federal government is on an unsustainable fiscal path.…it’s probably time, or past time, to get back to an adult conversation among elected officials about getting the federal government back on a sustainable fiscal path." - Federal Reserve Chair J. Powell on 60 Minutes 2/3/24
One thing we feel strongly about is the Fed's commitment to get inflation down to their 2% target. We also note that the Fed is setting policy using data out of the rearview mirror. Given the lagged effects of monetary policy, this approach increases the odds for a Fed overshoot. This is at the core of our more cautious stance in asset allocation positioning.
Explore timely insights on the economy and markets. We evaluate historical data and statistical relationships to identify drivers or signals as of August 31, 2023.
This is an update to the latest information presented in the Quarterly Themes Insights from February 28, 2022. We evaluate historical data and statistical relationships to identify drivers or signals as of April 15, 2022.
This is an update to the latest information presented in the Quarterly Themes Investment Update from February 28, 2022. We evaluate historical data and statistical relationships to identify drivers or signals as of April 15, 2022.
With the tide of liquidity starting to move back out we are taking off the risk-on posture we advocated at the start of 2021 and think a shift back toward strategic weights may be prudent. We believe opportunities will develop over the course of 2022, which will lead to advantageous positioning changes.
We believe that the monetary and fiscal spigots have begun to close, moving us to a new phase in the markets – one that may feel more familiar with fundamentals driving returns, says Richard “Crit” Thomas, Touchstone’s global market strategist.
Crit Thomas offers a brief update on his views of the markets, then shares his thoughts on the upcoming general election. Here’s his latest assessment.
How might a change in the White House impact investors? Prevailing conditions, rather than party affiliation and campaign platforms, may offer greater insight into what a Biden presidency may portend for the markets.
In actively managing the Touchstone Sands Capital Select Growth Fund, its sub-advisor favors large cap growth companies that in its view use ‘dislocation and disruption’ to their advantage.
Can the U.S. inflate its way out of its debt problem when much of its growing deficit is in fact tied to inflation? Higher debt levels seem here to stay. What are the implications for future administrations and their ability to legislate?
Today the high yield sector is providing historically healthy compensation in the form of the credit spread for taking on this risk. This opportunity, as with any, will not last indefinitely.
‘Red, then yellow, then green’ may signal the course of the global health crisis and its economic consequences. For now, caution marks the common direction of the markets.
The Coronavirus (COVID-19) outbreak continues to create uncertainty. Here are our thoughts and three rational actions for most investors to consider now depending on their situation.
When Doves Fly: Will the U.S. Federal Reserve Board (Fed) shift their monetary policy framework from looking out the windshield to using the rearview mirror?
While we continue to believe that the tariff war will begin to de-escalate later this year, near-term uncertainties are becoming more difficult to estimate.
We believe there is low probability of a protracted trade war between the U.S. and China but think there will likely be intense downward pressure on equities – more so in emerging countries than in the U.S. – if this occurs.
Economy & Markets
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