The Conversation We ll Be Having for Years to Come
|
|
- Jemima Dickerson
- 5 years ago
- Views:
Transcription
1 LEADERSHIP SERIES SEPTEMBER 2017 A feature article from our U.S. partners The Conversation We ll Be Having for Years to Come It s time to consider what a return to conventional monetary policy could mean for asset valuations. Jurrien Timmer l Director of Global Macro Key Takeaways Global stock markets continue to be resilient despite recent geopolitical pressures. Strong earnings growth and generally easy monetary policy around the world have helped prop up the markets. The big question facing investors for the next several years is how markets will react when central banks start to exit from this era of extraordinary monetary accommodation. The solid global economy, robust earnings, and low inflation could help central banks normalize with just a modest downward adjustment to the unusually favorable risk-return landscape. The low-vol march to Dow 22K and beyond Volatility briefly returned to financial markets in mid- August, temporarily reversing the seemingly impossible disparity between low market volatility and high geopolitical and policy uncertainty. The VIX 1 volatility index shot up to 17 (before settling back at 12), but that s still well below where it could go if something truly bad happened. For example, the VIX flirted with 90 during the 2008 financial crisis. I continue to believe that these are the known risks for the remainder of 2017: China has a post-reflation hard landing (not likely for 2017 but maybe in 2018?) The Fed tightens much more than the market has priced in (not likely for 2017, maybe in 2018?) A geopolitical shock (always possible, but impossible to predict) Barring an extreme geopolitical crisis, the known risks should be manageable, and a well-balanced, diversified portfolio likely remains the best solution for most
2 investors. That said, however, the risk-reward trade-off for stocks during the past 18 months has rarely been more favorable. Since the first quarter of 2016, the S&P 500 Index is up 32%, versus a standard deviation 2 of only seven. That s three times the market s average annual return against half its historical risk. This is unlikely to be sustainable over the long term. That doesn t mean a correction or a bear market is imminent. Historically, periods of low volatility can persist for some time. Case in point: Exhibit 1 shows that the current volatility of the S&P 500 is at its second-lowest level since 1970, against a year-over-year return that s at the 56th percentile (meaning the market has had a lower return 56% of the time and a higher return 44% of the time). But as the chart also shows, in early 1996 volatility was at a post-1970 low while its return was near a post high (96th percentile). A year later, volatility shot up dramatically (36th percentile), but the S&P 500 s return remained high at the 82nd percentile. The message is that these regimes can persist for some time, and even when they end it doesn t necessarily mean the market is going to plunge. Meanwhile, the Dow Jones Industrial Average has eclipsed 22,000, another milestone for one of the biggest bull markets in history. As records continue to fall, it s worth remembering that over the long run stock prices follow earnings, and earnings are on track to grow double-digits this year. It s no wonder the market is reaching new heights. Easy financial conditions, 3 a weaker U.S. dollar, and a synchronized global economic expansion (led by China) are an ideal trifecta for keeping this bull market going. EXHIBIT 1: Periods of high return and low volatility are not typically sustainable over the long term, but they have been known to last for a year or more. S&P 500 return vs. volatility (1970 to July 2017) Year-over-year return percentile rank 100% 90% 80% Jan Jan % 60% 50% July % 30% 20% 10% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 12-month volatility percentile rank Source: Haver Analytics, MSCI, Fidelity Investments, as of Aug. 13, All indices are unmanaged. You cannot invest directly in an index. Past performance is no guarantee of future results. 2
3 THE CONVERSATION WE LL BE HAVING FOR YEARS TO COME Yes, U.S. stock valuations are high at 21 times trailing earnings, but without a catalyst in the form of weaker earnings (or an external shock), valuations can remain high for some time. And earnings are anything but weak. Second-quarter earnings for 2017 are currently running at nearly 12% year over year, on the heels of a 14% growth rate in Q1. There was a strong hint that this earnings season would be good when the normal downward seasonal drift in estimates heading into earnings season failed to materialize. Because this is a synchronized global bull market, investors don t need to look to the U.S. government to justify the Dow 22K milestone. As long as earnings continue to grow, fiscal stimulus is not needed for the bull market to continue. So it s been relatively easy for the stock market to shrug off the lack of momentum in Washington on the fiscal front. Meanwhile, with inflation still missing in action, the Federal Reserve (Fed) has the luxury of time to normalize its monetary policy. As of August 14, traders on the fed funds futures market lowered the odds of a December rate hike to 37%. 4 Wall Street is now only pricing in 1.7 more hikes over the next two years (down from 2.3 in July), leaving the Fed s dot plot (which suggests seven more hikes) out of synch with the market. This suggests the Fed may have some dot tweaking to do at its September meeting. Despite some scary geopolitical headlines of late, the U.S. dollar remains near its recent lows. This is not what one might expect, but this time the U.S. itself is part of the headlines. Of course, the diminished expectations for Fed rate hikes have something to do with this as well. Good thing global earnings are still growing double digits. The conversation for years to come Looking ahead to 2018 and beyond, the disconnect between what the Fed is signaling in terms of its policy normalization guidance (in other words, its plan for rate As long as earnings continue to grow, fiscal stimulus is not needed for the bull market to continue. hikes) and what the market is pricing in could affect the current Goldilocks environment. How? It all comes down to the risk-free rate and how that affects the valuation of basically every asset class. The risk-free rate represents how much interest an investor would expect from a riskfree investment over a given period of time. Central banks directly determine policy rates, but through quantitative easing (QE) in recent years, they ve also indirectly influenced long-term yields (a.k.a., the risk-free rate). So, as the Fed, the European Central Bank, and other central banks look to exit from this era of extraordinary monetary accommodation, the conversation will inevitably turn to how this will affect the unusually low term premium (the premium that investors demand for buying long duration bonds), and, therefore, the risk-free rate. If the reversal of QE causes the term premium to rise to more historically consistent levels (one to two percentage points above the current 2.23% yield for the 10-year Treasury 5 ), it could affect the valuation of pretty much all financial assets, from stocks to Treasuries to high-yield corporate bonds to real estate. For bonds, the valuation effect is pretty straightforward: The risk-free rate directly impacts the yield, which directly impacts the security price and, therefore, the total return. Then it s just a question of the degree of adjustment. The higher the yield and the lower the duration, the less the adjustment (same for high-yield corporates as well). The lower the yield and the longer the duration (i.e., long-term Treasuries), the greater the adjustment. 3
4 For stocks it s a bit more nuanced, since the risk-free rate is only one of three components needed to value equities. The most important component is the expected earnings growth over time. But the discount rate (the rate against which this earnings growth is discounted) is important as well. If the discount rate rises because the risk-free rate rises, the valuation for equities will fall (all else being equal). That doesn t necessarily mean the stock market goes down, just that investors should assign a lower multiple because the value of earnings is lower. How that affects stock prices will depend on how much earnings are growing. The greater the earnings growth, the more resilient the stock market will be to any rise in the term premium and risk-free rate. The timing and degree of policy normalization in the coming years will likely come down to the overall growth environment and inflation. A stronger economic landscape and earnings picture will allow the central banks to normalize faster than a weak one. And today s low inflation rates afford the central banks (and the markets) the luxury of time to eventually reverse the asset purchases at a more modest pace. Some pundits are calling the markets a bubble, propped up by the current monetary policy regime of zero or negative rates and QE. Their theory is that when the central banks exit this regime, the bubble will burst. While there s no question in my mind that stock and bond valuations have been inflated through monetary policy, I would hardly call it a bubble. Such a drawdown would likely bring the risk-return ratio back in line with historical norms. But a complete unwinding of the current monetary policy regime seems very unlikely to me, which suggests any potential correction could be quite a bit less. All in all, if market and economic conditions warrant a return to more conventional monetary policy, perhaps we should celebrate that, even if it means a modest downward adjustment to the unusually favorable riskreturn landscape we ve all gotten used to in recent years. But it will be up to the central banks to find the right pace of normalization. 4
5 THE CONVERSATION WE LL BE HAVING FOR YEARS TO COME Author Jurrien Timmer l Director of Global Macro, Fidelity Global Asset Allocation Division Jurrien Timmer is the director of Global Macro for the Global Asset Allocation Division of Fidelity Investments, specializing in global macro strategy and tactical asset allocation. He joined Fidelity in 1995 as a technical research analyst. For Canadian investors For Canadian prospects and/or Canadian institutional investors only. Offered in each province of Canada by Fidelity Investments Canada ULC in accordance with applicable securities laws. Endnotes 1 Often referred to as the fear index, the Chicago Board Options Exchange Volatility Index, or VIX, represents a measure of the market s expectation of stock market volatility over the next 30-day period. 2 Standard deviation is the statistical measure of market volatility, measuring how widely prices are dispersed from the average price. 3 As measured by the Goldman Sachs Financial Conditions Index. See index definition below. 4 Source: MarketWatch, Bets on rate hike this year roll back in wake of weak inflation reading, Aug. 14, Source: FactSet, as of Aug. 17, Unless otherwise disclosed to you, any investment or management recommendation in this document is not meant to be impartial investment advice or advice in a fiduciary capacity, is intended to be educational and is not tailored to the investment needs of any specific individual. Fidelity and its representatives have a financial interest in any investment alternatives or transactions described in this document. Fidelity receives compensation from Fidelity funds and products, certain third-party funds and products, and certain investment services. The compensation that is received, either directly or indirectly, by Fidelity may vary based on such funds, products and services, which can create a conflict of interest for Fidelity and its representatives. Fiduciaries are solely responsible for exercising independent judgment in evaluating any transaction(s) and are assumed to be capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies. Information presented herein is for discussion and illustrative purposes only and is not a recommendation or an offer or solicitation to buy or sell any securities. Views expressed are as of the date indicated, based on the information available at that time, and may change based on market and other conditions. Unless otherwise noted, the opinions provided are those of the author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information. Investment decisions should be based on an individual s own goals, time horizon, and tolerance for risk. Nothing in this content should be considered to be legal or tax advice and you are encouraged to consult your own lawyer, accountant, or other advisor before making any financial decision. Stock markets, especially non-u.s. markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets Investing involves risk, including risk of loss. Past performance is no guarantee of future results. Diversification and asset allocation do not ensure a profit or guarantee against loss. All indices are unmanaged. You cannot invest directly in an index. Index definitions Standard & Poor s 500 (S&P 500 ) Index is a market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance. S&P 500 is a registered service mark of The McGraw-Hill Companies, Inc., and has been licensed for use by Fidelity Distributors Corporation and its affiliates. Goldman Sachs Financial Conditions Index tracks changes in interest rates, credit spreads, equity prices, and the value of the U.S. dollar. A decrease in the index indicates an easing of financial conditions, while an increase indicates tightening. The Dow Jones Industrial Average is an indicator of U.S. stock market prices, based on the share values of 30 blue-chip stocks listed on the New York Stock Exchange. Third-party marks are the property of their respective owners; all other marks are the property of Fidelity Investments Canada ULC. If receiving this piece through your relationship with Fidelity Institutional Asset Management (FIAM), this publication may be provided by Fidelity Investments Institutional Services Company, Inc., Fidelity Institutional Asset Management Trust Company, or FIAM LLC, depending on your relationship. If receiving this piece through your relationship with Fidelity Personal & Workplace Investing (PWI) or Fidelity Family Office Services (FFOS), this publication is provided through Fidelity Brokerage Services LLC, Members NYSE, SIPC. If receiving this piece through your relationship with Fidelity Clearing and Custody Solutions SM or Fidelity Capital Markets, this publication is for institutional investor or investment professional use only. Clearing, custody or other brokerage services are provided through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC. 5
6 2017 Fidelity Investments Canada ULC. All rights reserved. US: CAN:
Another Milestone on the Road to Policy Normalization
LEADERSHIP SERIES OCTOBER 2017 A feature article from our U.S. partners Another Milestone on the Road to Policy Normalization The twin tailwinds of strong earnings and easing financial conditions are unlikely
More informationTaking Stock of the Market s Mood
LEADERSHIP SERIES JUNE 2017 A feature article from our U.S. partners Taking Stock of the Market s Mood International stocks continue to outperform, while U.S. equity returns may be choppy and more subdued
More informationFour Key Drivers for Stocks in 2018
LEADERSHIP SERIES JANUARY 2018 Four Key Drivers for Stocks in 2018 Earnings, liquidity, Fed policy, and China may be the biggest market movers in the new year Jurrien Timmer l Director of Global Macro
More informationStorm Clouds and Silver Linings
INSIGHTS MARCH 2018 A feature article from our U.S. partners Storm Clouds and Silver Linings The recent correction rattled the market, but it may be just what stocks needed to resume their uptrend. Jurrien
More informationLessons from the Sixties
LEADERSHIP SERIES DECEMBER 2018 Lessons from the Sixties Stock/bond correlations have been steadily decreasing since peaking in 2015: What does it mean? Jurrien Timmer l Director of Global Macro l @TimmerFidelity
More informationWill the Markets Fairy Tale Year Have a Happy Ending?
LEADERSHIP SERIES JULY 2017 A feature article from our U.S. partners Will the Markets Fairy Tale Year Have a Happy Ending? 2017 has been a Goldilocks year so far, with stocks and bonds up amid record-low
More informationShould We Worry About the Yield Curve?
LEADERSHIP SERIES AUGUST 2018 Should We Worry About the Yield Curve? If and when the yield curve inverts, its signal may well be premature. Jurrien Timmer l Director of Global Macro l @TimmerFidelity Key
More informationPeak Reflation May Be Looming
LEADERSHIP SERIES APRIL 2017 A feature article from our U.S. partners Peak Reflation May Be Looming The reflation trade appears intact, but U.S. stock gains could slow if the economy reaches a momentum
More informationWaiting for the End Game
LEADERSHIP SERIES JULY 2018 Waiting for the End Game The market is looking for the interest rate cycle s next inflection point. Jurrien Timmer l Director of Global Macro l @TimmerFidelity Key Takeaways
More informationDispelling the Myths of International Investing
LEADERSHIP SERIES Dispelling the Myths of International Investing There are multiple reasons to consider an increased allocation to this often-misunderstood asset class. The long-term rally in U.S. stocks
More informationAll about the liquidity
A feature article from our U.S. partners INSIGHTS JUNE 2018 All about the liquidity Strong earnings are bailing out high valuations, but it s all about financial conditions from here. Jurrien Timmer l
More informationLessons from the Sixties
A feature article from our U.S. partners INSIGHTS DECEMBER 2018 Lessons from the Sixties Stock/bond correlations have been steadily decreasing since peaking in 2015: What does it mean? Jurrien Timmer l
More informationWhy Active Now in U.S. Large-Cap Equity
LEADERSHIP SERIES Why Active Now in U.S. Large-Cap Equity With changing economic and market conditions, the time may be right for actively managed U.S. large-cap funds to take the lead. Darby Nielson,
More informationHow to evaluate factor-based investment strategies
A feature article from our U.S. partners INSIGHTS SEPTEMBER 2018 How to evaluate factor-based investment strategies Due diligence on smart beta strategies should be anything but passive Original publication
More informationIncorporating Factor Strategies into a Style- Investing Framework
LEADERSHIP SERIES Incorporating Factor Strategies into a Style- Investing Framework Passive investors can gain targeted exposure to value and growth companies with factor strategies. Darby Nielson, CFA
More informationShould we worry about the yield curve?
A feature article from our U.S. partners INSIGHTS AUGUST 2018 Should we worry about the yield curve? If and when the yield curve inverts, its signal may well be premature. Jurrien Timmer l Director of
More informationSectors Are Shifting: The Impact of the New GICS Framework
LEADERSHIP SERIES Sectors Are Shifting: The Impact of the New GICS Framework Four important considerations for sector investors. Denise Chisholm l Sector Strategist Richard Biagini l Quantitative Analyst
More informationPurgatory lies at the intersection of E & r
A feature article from our U.S. partners INSIGHTS NOVEMBER 2018 Purgatory lies at the intersection of E & r As frustrating as it may be to see the market go nowhere after a massive runup, the inescapable
More informationTranslating Factors to International Markets
LEADERSHIP SERIES Translating Factors to International Markets Strategies that combine the potential diversification benefits of international exposure with the portfolio-enhancing benefits of factors
More informationWeekly Market Commentary
LPL FINANCIAL RESEARCH Weekly Market Commentary November 18, 2014 Emerging Markets Opportunity Still Emerging Burt White Chief Investment Officer LPL Financial Jeffrey Buchbinder, CFA Market Strategist
More informationMulti-Asset Income Investing
LEADERSHIP SERIES Multi-Asset Income Investing Look for go-anywhere flexibility focused on income and guided by a risk framework Adam Kramer l Portfolio Manager Jim Morrow l Portfolio Manager Ford O Neil
More informationMind the gap. With upward revisions to the natural rate, it looks like the Fed may still have plenty more wood to chop.
A feature article from our U.S. partners INSIGHTS OCTOBER 018 Mind the gap With upward revisions to the natural rate, it looks like the Fed may still have plenty more wood to chop. Jurrien Timmer l Director
More information2018 Outlook: Global Expansion to Continue, but Markets Likely More Volatile
LEADERSHIP SERIES DECEMBER 2017 2018 Outlook: Global Expansion to Continue, but Markets Likely More Volatile Smaller asset allocation tilts may be warranted as the business cycle matures Dirk Hofschire,
More informationCreating a Resilient Glide Path for a Target Date Strategy. Using market environment analysis to help improve retirement outcomes
Creating a Resilient Glide Path for a Target Date Strategy Using market environment analysis to help improve retirement outcomes Target date strategies are now the primary retirement investment vehicle
More informationQ Quarterly Market Update Video
Q2 2015 Quarterly Market Update Video Hello, I m Dirk Hofschire of Fidelity Investments. On behalf of my colleagues in the asset allocation research team, I d like to share with you some of our perspectives
More informationTarget Date Evolution: Active Asset Allocation Aims to Improve Retirement Outcomes
Target Date Evolution: Active Asset Allocation Aims to Improve Retirement Outcomes August 2014 Since the launch of the Fidelity Freedom Funds in 1996, which helped pioneer the concept of target date investing,
More informationThe Fed Stays On Its Fairly Hawkish Path
LEADERSHIP SERIES OCTOBER 2017 Money Markets The Fed Stays On Its Fairly Hawkish Path Michael Morin, CFA l Director of Institutional Portfolio Management Kerry Pope, CFA l Institutional Portfolio Manager
More information2016 July Financial Market Update
Brexit Fades as Focus Returns Home 2016 July Financial Market Update Last month s summary ended with the following remarks: July 29, 2016 Don t discount the possibility of additional short-term volatility
More informationChina Growth Outlook: Weaker Than It Appears?
LEADERSHIP SERIES MAY 2018 China Growth Outlook: Weaker Than It Appears? A slowdown in industrial activity may indicate global growth has peaked. Dirk Hofschire, CFA l Senior Vice President, Asset Allocation
More informationSunTrust Advisory Services, Inc. Market Perspective The Pain Trade. Keith Lerner, CFA, CMT Director, Chief Market Strategist March 6, 2017
SunTrust Advisory Services, Inc. Market Perspective The Pain Trade Keith Lerner, CFA, CMT Director, Chief Market Strategist March 6, 2017 The Pain Trade Far more money has been lost by investors preparing
More informationLow-Volatility Equity Investing for U.S. Corporate Defined Benefit Plan Sponsors
Low-Volatility Equity Investing for U.S. Corporate Defined Benefit Plan Sponsors KEY TAKEAWAYS For plan sponsors seeking to de-risk their pension plans, low-volatility equity strategies offer the potential
More informationWILL GOLD CONTINUE TO SHINE?
LPL RESEARCH WEEKLY MARKET COMMENTARY March 7 216 WILL GOLD CONTINUE TO SHINE? Burt White Chief Investment Officer, LPL Financial Jeffrey Buchbinder, CFA Market Strategist, LPL Financial KEY TAKEAWAYS
More informationKey takeaways. What it may mean for investors FIRST A NALYSIS NEWS OR EVENTS T HAT MAY AFFECT Y OUR INVESTMENTS. Global Investment Strategy Team
FIRST A NALYSIS NEWS OR EVENTS T HAT MAY AFFECT Y OUR INVESTMENTS Global Investment Strategy Team February 5, 2018 Market Sell-off What Investors Need to Know Now Key takeaways» A swift climb in the 10-year
More informationStocks Aren t so Spooky
Stocks Aren t so Spooky October 28, 2017 by Liz Ann Sonders, Brad Sorensen and Jeffrey Kleintop of Charles Schwab Key Points Along with new records being set by stocks, investor sentiment measures are
More informationThis time isn t different
UNCERTAINTY = OPPORTUNITY This time isn t different Richard Bernstein, Chief Executive and Chief Investment Officer Richard Bernstein Advisors Richard Bernstein Advisors LLC (RBA) is an independent investment
More informationCORRECTION PERSPECTIVES
LPL RESEARCH WEEKLY MARKET COMMENTARY February 12 2018 CORRECTION PERSPECTIVES John Lynch Chief Investment Strategist, LPL Financial KEY TAKEAWAYS A perfect storm of investor worries collided over the
More informationBonds: Ballast for your portfolio
Bonds: Ballast for your portfolio Jim Nelson: Bonds can play an important role in a well-diversified investment portfolio. They can help offset the volatility of stocks. But how do you choose from the
More information2016 April Financial Market Update
Charles Sherry Director, Institutional Education Group Blue Ocean Global Wealth 51 Monroe St., Plaza West 06 Rockville, MD 20850 Tel: 720.308.4560 csherry@blueoceanglobalwealth.com 2016 April Financial
More informationChoose Your Friends Wisely February 2013
Choose Your Friends Wisely February 2013 Success in a trend-following strategy depends on selecting the right asset classes, instruments and trend durations, says Steve Jeneste of Goldman Sachs Management
More informationTHE SKINNY. CG s Market Commentary
THE SKINNY CG s Market Commentary Third Quarter 2016 THE SKINNY Third Quarter 2016 U.S. EQUITY MARKETS ENDED SEPTEMBER WITH MIXED RESULTS. The Dow Jones Industrial Average posted a 0.41% loss for the month,
More informationCrunch time for emerging markets
A feature article from our U.S. partners INSIGHTS SEPTEMBER 2018 Crunch time for emerging markets The last emerging-market (EM) rout was rescued by the Fed; a reprise may be wishful thinking this time.
More informationNavigating the New Environment
Navigating the New Environment May 12, 2018 by Liz Ann Sonders, Jeffrey Kleintop & Brad Sorensen of Charles Schwab Key Points U.S. stock indexes have rebounded from their correction lows, although remain
More informationGlide Path Caution! A Steep Slope Could Curb Retirement Wealth
leadership series INVESTMENT INSIGHTS Glide Path Caution! A Steep Slope Could Curb Retirement Wealth February 2015 Introduction Glide path slope the rate of change in equity exposure over time is often
More informationViews expressed at the July Face to Face with Fidelity in Boston
Daniel Dupont and Hugo Lavallée s Perspectives on Canadian Equities Dan Dupont manages a number of Fidelity Funds, including Fidelity Concentrated Value Private Pool. The Pool typically has between 20
More informationDIVIDEND BUBBLE? Burt White Chief Investment Officer, LPL Financial Jeffrey Buchbinder, CFA Market Strategist, LPL Financial
LPL RESEARCH WEEKLY MARKET COMMENTARY September 6 2016 DIVIDEND BUBBLE? Burt White Chief Investment Officer, LPL Financial Jeffrey Buchbinder, CFA Market Strategist, LPL Financial KEY TAKEAWAYS Dividend
More informationINTERNATIONAL EQUITIES
2018 Global Market Outlook Press Briefing INTERNATIONAL EQUITIES Justin Thomson Portfolio Manager, CIO, Equity November 14, 2017 FOR 2018 GLOBAL MARKET OUTLOOK PRESS BRIEFING. PROVIDED TO DESIGNATED MEMBERS
More informationQuarterly Market Update: Third Quarter 2015
Quarterly Market Update: Third Quarter 2015 Hello, I m Dirk Hofschire of Fidelity Investments, on behalf of my colleagues on the Asset Allocation Research Team, I d like to share with you our insights
More informationQuarterly Sector Update
LEADERSHIP SERIES SECOND QUARTER 2018 Quarterly Sector Update PRIMARY CONTRIBUTORS Fidelity Management & Research Company, Equity Division SECTOR UPDATE Scorecard: Technology and Discretionary on Top U.S.
More informationTHE SKINNY THIRD QUARTER 2018
THE SKINNY THIRD QUARTER 2018 THE RECORD-BREAKING U.S. EQUITY BULL MARKET CHARGED AHEAD IN Q3, POWERED BY AN ECONOMY FIRING ON ALL CYLINDERS. U.S. stocks rallied in the third quarter, boosted mainly by
More information2019 Schwab Market Outlook
2019 Schwab Market Outlook Schwab Center for Financial Research Schwab s team of market experts share their perspectives and provide investment guidance EXECUTIVE SUMMARY Be Prepared Last year, our Market
More informationThe Benefits of Long-Term Investing. Time In the Market vs. Timing the Market
The Benefits of Long-Term Investing Time In the Market vs. Timing the Market While you re sitting on the sidelines, waiting for just the right time to invest, some of the market s best single-day performances
More informationQuarterly Sector Update
FOURTH QUARTER 2016 Quarterly Sector Update PRIMARY CONTRIBUTORS Asset Allocation Research Team (AART) Fidelity Management & Research Company, Equity Division Fidelity SelectCo SECTOR UPDATE What Is Fidelity
More informationThe Case for Using a Sector-Based Framework in Equity Portfolio Construction
LEADERSHIP SERIES The Case for Using a Sector-Based Framework in Equity Portfolio Construction Sector exposure historically has been a major driver of stock returns and can be an effective way to seek
More informationIs the Flattening Yield Curve Sending a Message?
Is the Flattening Yield Curve Sending a Message? FEBRUARY 2018 Sean Simko, ChFC Managing Director SEI Fixed Income Portfolio Management SEI Fixed Income Portfolio Management (SFIPM) manages fixed-income
More informationGAUGING GLOBAL GROWTH: AN UPDATE FOR 2015 & 2016 John J. Canally, Jr., CFA Chief Economic Strategist, LPL Financial
LPL RESEARCH WEEKLY ECONOMIC COMMENTARY October 1 15 GAUGING GLOBAL GROWTH: AN UPDATE FOR 15 & 16 John J. Canally, Jr., CFA Chief Economic Strategist, LPL Financial KEY TAKEAWAYS As companies report third
More informationInvestment Perspectives. From The Global Investment Committee
Investment Perspectives From The Global Investment Committee Global Risk Aversion Reached Extreme Levels Morgan Stanley Standardized Global Risk Demand Index As of October 15, 2014 Complacent Extreme Fear
More informationQuarterly Economic Update
Quarterly Economic Update Fourth Quarter 2017 Holloway Wealth Management While the weather in the United States ended 2017 on a cold note for many residents, equity investors finished a very warm year.
More informationMonthly Perspectives. From the Global Investment Committee October 2014
Monthly Perspectives From the Global Investment Committee October 2014 Global Risk Aversion Reached Extreme Levels Morgan Stanley Standardized Global Risk Demand Index As of October 15, 2014 Complacent
More informationStill a Good Time for International Equities?
LEADERSHIP SERIES A feature article from our U.S. partners Still a Good Time for International Equities? Business cycle approach favors international equities, though there are differences with prior cycles.
More informationSemiannual Report December 31, 2017
PIMCO ETF Trust Semiannual Report December 31, 2017 Index Exchange-Traded Funds PIMCO 1-3 Year U.S. Treasury Index Exchange-Traded Fund PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund
More informationU.S. Economy in Slow Roll Toward Full Late-Cycle Phase
leadership series NOVEMBER 2016 A feature article from our U.S. partners business cycle update U.S. Economy in Slow Roll Toward Full Late-Cycle Phase Strengthening inflationary signals are directionally
More informationforward PERSPECTIVES The Next Chapter: Lower Returns and Higher Volatility Bruce Cooper, CFA TD Asset Management Ken Miner, CFA TD Asset Management
forward PERSPECTIVES The Next Chapter: Lower Returns and Higher Volatility Bruce Cooper, CFA TD Asset Management Ken Miner, CFA TD Asset Management December 2014 The Next Chapter: Lower Returns and Higher
More informationFinancial Market Outlook: Further Stock Gain on Faster GDP Rebound and Earnings Recovery. Year-end Target Raised
For Market Commentary Interviews Contact: Lisa Villareal, 973-367-2503/lisa.villareal@prudential.com Financial Market Outlook & Strategy: FurtherStock Gains Likely, Year-end Target Raised. Bond Under Pressure
More informationRetirement 20/20. Peter Drake, Vice President, Retirement and Economic Research Fidelity Investments Canada ULC 2013 FMR LLC.
Retirement 20/20 Peter Drake, Vice President, Retirement and Economic Research Fidelity Investments Canada ULC Important notice FOR ADVISOR USE ONLY. No recipient is authorized to pass this communication
More informationGundlach: The Goldilocks Era is Over
Gundlach: The Goldilocks Era is Over December 6, 2017 by Robert Huebscher Easy monetary policies during the post-crisis period have propelled equity prices higher and driven bond yields lower. But as central
More informationProceed With Caution: Higher Probability for Normalized Market Returns Ahead
September 2015 Matt Neska, CFA, Domestic Equity Specialist Proceed With Caution: Higher Probability for Normalized Market Returns Ahead The current bull market in U.S. equities is entering its seventh
More informationThe Year Ahead
The Year Ahead - 2014 January 9, 2014 by Mark Ungewitter of Charter Trust Company In the spirit of year-end prognostication, here s my annual review of secular trends and historic behaviors that are likely
More informationPerspectives JAN Market Preview: Non-U.S. Equities
Perspectives JAN 2018 2018 Market Preview: Non-U.S. Equities SUSTAINED STRENGTH OR ONE HIT WONDER? Non-U.S. equity investors patience was finally rewarded with a banner year in 2017, as both strong economic
More informationU.S. Economic Outlook: recent developments
U.S. Economic Outlook Recent developments Washington, D.C., 6 February 2018 This document was prepared by Helvia Velloso, Economic Affairs Officer, under the supervision of Inés Bustillo, Director, ECLAC
More informationMarket Insight: A Sea Change is Underway
February 26, 2016 Market Insight: A Sea Change is Underway The price action of the financial markets since the start of the year has been nothing short of chaotic, and many would classify it as the beginning
More informationThe Volatility You Can See Coming
DRIEHAUS GLOBAL MARKET OUTLOOK // JANUARY 2018 The Volatility You Can See Coming By Richard Thies As we reflect upon the strong year for markets in 2017, and ahead to 2018, we are reminded of the many
More informationTake control. Help your clients understand the role of risk control in a portfolio A GUIDE TO CONDUCTING A RISK CONTROL REVIEW
A GUIDE TO CONDUCTING A RISK CONTROL REVIEW Take control Help your clients understand the role of risk control in a portfolio MGA-1658740 FOR REGISTERED REPRESENTATIVE USE ONLY. NOT FOR USE BY THE GENERAL
More informationBCA 4Q 2018 Review and 2019 Outlook Russ Allen, CIO. Summary Outlook
BCA 4Q 2018 Review and 2019 Outlook Russ Allen, CIO Summary Outlook January 15, 2019 Markets in 2019 will be choppy with volatility more like this past year than the placid trading of 2017. The Fed is
More informationCan You Time Managed Futures?
September 7 Can You Time Managed Futures? John Dolfin, CFA Chief Investment Officer Steben & Company, Inc. Christopher Maxey, CAIA Senior Portfolio Manager Steben & Company, Inc. This white paper addresses
More informationEuropean Growth on Upswing after Years of Struggle
LEADERSHIP SERIES JUNE 2017 A feature article from our U.S. partners Business Cycle Update European Growth on Upswing after Years of Struggle Progress toward monetary policy normalization may occur sooner
More informationSTRONG WEEK AHEAD OF BIG WEEKEND
LPL RESEARCH WEEKLY MARKET COMMENTARY December 3 2018 STRONG WEEK AHEAD OF BIG WEEKEND John Lynch Chief Investment Strategist, LPL Financial Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial KEY
More informationDURSO WEALTH MANAGEMENT GROUP AT MORGAN STANLEY May 31, 2016 ECONOMIC LANDSCAPE
ECONOMIC LANDSCAPE Noise, very low levels of optimism, heightened levels of pessimism, and even more noise have flooded the headlines in the month of May. Here are some of the topics I am sure you have
More informationWell, something similar has been happening to much of the stock market.
Charles Sherry Director, Institutional Education Group Blue Ocean Global Wealth 9841 Washingtonian Blvd., #200 Gaithersburg, MD 20878 Tel: 720.308.4560 csherry@blueoceanglobalwealth.com 2017 June Financial
More informationMARKET VOLATILITY - NUMBER OF "BIG MOVE" TRADING DAYS
M O O D S W I N G S November 11, 214 Northern Trust Asset Management http://www.northerntrust.com/ investmentstgy James D. McDonald Chief Investment Stgist jxm8@ntrs.com Daniel J. Phillips, CFA Investment
More informationRecap of 2017 Markets and Economy
Welcome to 2018! As always, our primary goal this year is to continue our tradition of helping clients achieve their personal financial goals. To make that process more efficient, please review the 2018
More informationStocks Laboring to Move Higher
Stocks Laboring to Move Higher August 31, 2018 by Liz Ann Sonders, Jeffrey Kleintop & Brad Sorensen of Charles Schwab Key Points U.S. stocks indexes finally moved to new record highs but not exactly in
More informationMapping the Road to Retirement
Mapping the Road to Retirement A Fidelity Perspective Steps You Can Take to Improve Your Retirement Readiness. Every one of us wants to look forward to a secure financial future. Many are taking steps
More informationPersonal Finance REBALANCING CAN HELP MITIGATE MARKET RISK
PRICE PERSPECTIVE February 17 In-depth analysis and insights to inform your decision-making. Personal Finance REBALANCING CAN HELP MITIGATE MARKET RISK EXECUTIVE SUMMARY The global equity markets have
More informationMANAGED FUTURES INDEX
MANAGED FUTURES INDEX COMMENTARY + STRATEGY FACTS SEPTEMBER 2018 CUMULATIVE PERFORMANCE ( SINCE JANUARY 2007* ) 140.00% 120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% AMFERI BARCLAY BTOP50 CTA INDEX
More informationGlobalization vs. the U.S. Business Cycle: The Effects on U.S. Interest Rates
Deron T. McCoy CFA, CFP, CAIA, AIF Chief Investment Officer Originally written June 2014 Updated September 2014 Globalization vs. the U.S. Business Cycle: The Effects on U.S. Interest Rates Globalization
More informationSlowdown or recession?
Slowdown or recession? BY DIRK HOFSCHIRE, CFA, VICE PRESIDENT, ASSET ALLOCATION RESEARCH, FIDELITY VIEWPOINTS 08/10/11 Recession risks rise, though mid-cycle slowdown may be the most likely scenario. The
More informationGlobal Bond Markets to Enter New Phase in 2018
Global Bond Markets to Enter New Phase in 2018 January 8, 2018 by Douglas Peebles of AllianceBernstein 2017 was supposed to be the year that would put an end to modest growth, lukewarm inflation and anemic
More informationVolatility returns, fundamentals remain strong
Capital market insights Conversation guide February 2018 Volatility returns, fundamentals remain strong If record-low volatility and more than a year of positive monthly returns on the S&P 500 Index had
More informationGundlach: I m Not Really Bullish on Bonds
Gundlach: I m Not Really Bullish on Bonds September 13, 2017 by Robert Huebscher Jeffrey Gundlach, one of the most respected bond managers in the world with over $100B in fixed-income assets under management,
More informationGlobal Investment Outlook 2018: Reflections on Growing Economies and Fading Stimulus
Global Investment Outlook 2018: Reflections on Growing Economies and Fading Stimulus December 23, 2017 by Team of Franklin Templeton Investments As markets shift away from the recovery era of monetary
More informationThe Fed Raises Interest Rates as U.S. Economy Strengthens, with More Hikes to Come
LEADERSHIP SERIES JULY 2018 Money Markets The Fed Raises Interest Rates as U.S. Economy Strengthens, with More Hikes to Come Kerry Pope, CFA l Institutional Portfolio Manager Key Takeaways In June, the
More informationGoldilocks or the Three Bears?
Goldilocks or the Three Bears? June 11, 2017 by Liz Ann Sonders, Brad Sorensen and Jeffrey Kleintop of Charles Schwab Key Points U.S. equities continue to grind higher, setting records, with volatility
More informationU.S. Debt Tops $20 Trillion - Stocks Soar To Record Highs
U.S. Debt Tops $20 Trillion - Stocks Soar To Record Highs September 20, 2017 by Gary Halbert of Halbert Wealth Management 1. National Debt Tops $20 Trillion, Equal to 107% of GDP 2. Debt Held by the Public
More informationZacks Earning Trends
May 7, 2015 Zacks Earning Trends Sheraz Mian SMian@Zacks.com Standout Sectors of Q1 Earnings Season It isn t news anymore that the earnings picture emerging from the Q1 earnings season has been very bad
More informationFidelity Global ex U.S. Index Fund
QUARTERLY FUND REVIEW AS OF SEPTEMBER 30, 2017 Fidelity Global ex U.S. Fund Investment Approach Fidelity Global ex U.S. Fund is a diversified international equity strategy that seeks to closely track the
More informationThe Growth of Workplace Managed Accounts
August 2013 The Growth of Workplace Managed Accounts An Effective Solution for Plan Sponsors and Participants Despite plan sponsors best efforts to line up appropriate investments, educate workers about
More informationUsing Regime-Based Analysis to Develop a Resilient Glide Path
LEADERSHIP SERIES Using Regime-Based Analysis to Develop a Resilient Glide Path Being aware of extended and cyclical market environments can help inform the ongoing development and evaluation of a glide
More informationMarket outlook: What to expect in 2018 and beyond
Market outlook: What to expect in 2018 and beyond Dave Eldreth: What does the future hold for the economy and the markets? Will inflation remain in check? And what should investors expectations for returns
More information2016 May Financial Market Update
Charles Sherry Director, Institutional Education Group Blue Ocean Global Wealth 51 Monroe St., Plaza West 06 Rockville, MD 20850 Tel: 720.308.4560 csherry@blueoceanglobalwealth.com 2016 May Financial Market
More informationA PIVOTAL OCTOBER. Issue #14. October 2018
A PIVOTAL OCTOBER Issue #14 October 2018 Stock markets tend to post their best returns from October to April but October itself can be the most volatile month of the year. The tug of war between good news
More information