Are Stagflation Fears Justified?
Stagflation fears are growing among investors as inflation recently accelerated at the same time 2022 GDP growth projections declined due to weaker consumer sentiment and increased risk aversion. A...
Is this Time Different? Risk Assets and Real Rate Moves
February ended in the same fashion as January, with elevated volatility across a wide spectrum of asset classes. Equities, fixed income, currencies, commodities, and cryptocurrencies all swung...
Tech Stocks Lead the Market Decline in Early 2022
2022 began with one of the worst market performance periods since 2009. While the tech-heavy NASDAQ index looks to finish January with a loss of around 10 percent, value equities will likely record...
Consumer Savings and Disposable Income Under Pressure
As 2021 comes to an end, we enter 2022 with a good dose of uncertainty in the markets as the Fed begins to reduce and ultimately removes its accommodative policy which has been in place since the...
Sky High Valuations Could Spell Weaker Forward Returns
When we look for potential roadblocks that could spoil the breakneck pace of capital markets, the first risk that comes to mind is record-high valuations. While inflation risks have become more...
Chart of the Month | Fed Remains Patient on Rate Hikes Despite Market Expectations For A More Aggressive Move
In its latest meeting on November 3rd, the Fed announced its decision to begin scaling back its historic bond purchasing program, marking the beginning of the end of the program that was aimed at...
Chart of the Month | Are We on the Verge of a Global Energy Crisis?
It is hard to imagine that in the short span of less than 18 months, energy markets went from a state of overabundance to one of severe shortages and skyrocketing prices. In April 2020, Brent oil...
Chart of the Month | The Confusing State of the Labor Market
The U.S. labor market continues to recover from one of the worst declines in employment since the 1930s. In the early days of the pandemic last April, demand for labor plummeted and the unemployment...
Chart of the Month | Home Prices Are Up 32 Percent In Five Years – And Still Climbing
Housing demand appears to be slowing down in the first half of 2021, yet home prices have continued to climb at an accelerated pace. This month’s chart highlights the supply and demand factors...
Chart of the Month | Supply Chain Woes as the Pandemic Recedes in the U.S.
Supply chain woes continue to wreak havoc for retailers who are grappling with a strong rebound in consumer spending. Average six-month spending on durable goods, spurred by over $5 trillion in...
Chart of the Month | Emerging Markets Trail the Pack Despite Rising Demand and Commodities Prices
As growth continues to rebound around the world and investors return to their pre-pandemic way of life, global market performance is beginning to reflect the divergent speed of normalization within...
Chart of the Month | U.S. Budget Deficit Hits Record Highs
In his first 100 days as President of the United States, Joe Biden has introduced three domestic funding proposals, totaling close to $6.0 Trillion, reflecting a desire to enhance the role of the...
Chart of the Month | The Surprising Relationship Between Money Supply and Inflation
The potential for rising inflation is becoming a top concern for many investors and consumers. Many believe that inflation is already here as evidenced by price increases in commodities, homes,...
Chart of the Month | The Stock Market Rally May Finally Be Broadening Beyond Tech Names
The trend of improving performance of sectors most sensitive to the strengthening economy remained on track in February 2021. For the most part of 2020, the traditional S&P 500 market-cap-weighted...
Chart of the Month | Are Bonds Still a Good Hedge for Equity Market Declines?
In the middle of January, the Biden administration announced the details on a new $1.9 trillion stimulus package, including enhanced unemployment benefits, an increase in the minimum wage, and...
Chart of the Month | Beware of High Yield Bonds
Income-hungry investors continued to push yields on speculative grade bonds to new lows despite the challenging business conditions this year. The yield on the Bloomberg Barclays Corporate High Yield...
Chart of the Month | Are Value Stocks Finally Going to Make a Run?
The month of November saw a sharp rotation into value equities at the expense of technology and communication services companies, causing investors to wonder whether the long-run dominance of growth...
Chart of the Month | Recession Impacts on Employment and Wages
It may come as a surprise to many that average disposable personal incomes have increased by 6.6 percent from February prior to the pandemic through August. This is down from a high of 9.8 percent in...
Chart of the Month | Low Rates Make Record Government Debt Manageable – For Now
Few people would have predicted that U.S. equity markets would be higher today than at the start of 2020 if told that a virus would infect over 7.0 million people in the U.S., cause over 200,000...
Chart of the Month | Inflation Expectations Surge, Driving Real Interest Rates Down
Chairman Powell’s speech at Jackson Hole during the last week of August confirmed the Fed’s dovish policy stance, giving investors ample support in terms of low rates and a flexible inflation...
Chart of the Month | Markets are Running Ahead of Economic Reality
When investors open their second quarter investment reports, many will be shocked by the magnitude of stock market gains in the second quarter. Their surprise could be voiced by a rhetorical question...
Chart of the Month | Measuring Social Distancing with Mobility Trends
We continue to monitor the level of social distancing as an indicator for business activity and improvement in consumer sentiment. Personal spending experienced the largest month-over-month drop on...
Chart of the Month | The Fed Rides to the Rescue
The Federal Reserve is determined to support the economy and the normal functioning of capital markets during the COVID-19 pandemic. As of April 29th, the total asset size of the Fed’s balance sheet...
Chart of the Month | The Dangers of Timing a Bear Market
It has been well documented that trying to avoid market downturns by selling out of stocks and moving to cash can be damaging to long-term portfolio values. And while there are strong behavioral...
Chart of the Month | A Price War Erupts in the Oil Market
Oil prices declined over 21 percent on March 9, 2020, the largest single-day decline since January 1991 during the Gulf War[1]. There was optimism prior to the OPEC (Organization of Petroleum...
Chart of the Month | Central Banks Increasingly Accommodative
World markets appeared to be returning to their upward trend in the beginning of February after a volatile start of the year. While concerns about global growth caused by the coronavirus outbreak are...
Chart of the Month | Election Year Market Trends
As we enter the 12th year of economic expansion since the Great Financial Crisis, investors continue to wonder whether 2020 will be the year when equity markets finally experience a correction....
The “Divorcification” of Stocks and Bonds