Real Estate

Despite pullbacks and elevated volatility in the earlier days of the month, major equity indices were up in August.

Investors should be careful what they wish for in hoping for an aggressive Fed rate cutting cycle, given stocks tend to do better when cuts are slow and steady.

A bright spot in Chinese investment could spell trouble for its financial institutions.

After a decade of consistent outperformance, Japanese small caps began underperforming their large cap peers in 2018, a trend that has accelerated since 2023.

In this edition, Harold Evensky explores the challenges facing sustainable and active funds, the implications of the new DOL Fiduciary Rule, and the value of long-term performance projections. With candid observations and critical analysis--read on to gain perspective on navigating the complex world of investing, the importance of risk management, and the role of fiduciary advisors in securing your financial future.

A soft landing for the U.S. economy still appears to be the most likely outcome.

With his Jackson Hole speech, Federal Reserve Chair Jerome Powell all but promised rate cuts were coming. That’s cool. But it is why that matters.

After a bit of an early-August swoon, the stock market came roaring back in the last few weeks of the month. The S&P 500 finished up 2.4%, though certainly in the early days of August, that did not feel like a particularly likely outcome. In client conversations a few days into the selloff, our feeling was to stay put and not tinker with the portfolios we suggested in early August.

In our view, stagflation scenarios tend to be worse for balanced portfolios than recessions.

As noted in this past weekend’s newsletter, following the “Yen Carry Trade” blowup just three weeks ago, the market has quickly reverted to more extreme short-term overbought conditions.

Copper has been trending lower since the middle of May, but supply disruptions in Latin America could help reverse that trend.

When you see that behavior at extreme valuations, it tends to be a sign of underlying skittishness and risk aversion. When valuations are setting record extremes because the news can’t get any better, even a slightly less optimistic outlook becomes a risk.

China's economic transformation presents both challenges and opportunities for global markets.

While short-term fluctuations and sudden selloffs have tested the markets, key indicators such as corporate profits, employment data, and economic resilience have held firm.

The “Sahm Rule,” a widely used metric for determining the early stages of recession, was triggered in July.

Is the Japanese yen carry trade back on? Tough question. We think it is, now that the Bank of Japan has toned down its hawkish rhetoric. More on that later. Still, even if we are wrong, the reality is that the market will be talking about the violent ructions of August 2024 for the rest of our careers.

In an election year, we are bound to hear a lot of commentary about the merits and drawbacks of both major candidates’ economic policies. History shows that while a president’s policies can make life easier or more difficult for various sectors of the economy, U.S. Federal Reserve (Fed) policy has much more impact on the economy overall.

An extended period of elevated interest rates may have long-term implications for both consumers and businesses—affecting how investors value company shares.

Will 2030 DC plans perform better at preparing U.S. workers for retirement?

The most glaring uncertainties today, which contributed to early August seeing some of the largest market moves in the last several years, are the risks associated with the Federal Reserve’s dual mandate.

With US payroll and unemployment data surprising to the downside two Fridays ago, Treasury markets quickly repriced the probability of impending recession, helping set off a volatility spike in stocks across the world. According to Bloomberg, economists’ consensus probability of a US recession in the next twelve months is now approximately 30%.

After a downward slide at the end of July and beginning of August, markets are attempting to recover losses. Through Friday, the S&P 500 experienced seven consecutive “up” days. Three of these up days qualified as “outlier” days (more than +/-1.50%).

We all knew it was coming…and in Jackson Hole, Federal Reserve Chairman Jerome Powell said it will come next month. He said, “the time has come,” and the futures markets have priced in either a 25 or 50 basis point rate cut at the meeting on September 18.

In his annual Jackson Hole speech, Fed Chair Powell assessed the post-pandemic U.S. economy and suggested rate cuts are coming soon.

As a businessman and ex-business owner, the idea of firms ‘hoarding’ workers never made sense. As an economist, the idea of firms hoarding workers never made sense either.

This week we take a not-so-random walk through the data, trying to simplify what is actually a fairly complex subject. I think it is quite fun, but also important. Let's dive in.

This week, before she accepted the Democratic Party’s nomination for president, Vice President Kamala Harris threw her support behind President Joe Biden’s tax proposals for 2025, which include a steep 44.6% capital gains rate and an unprecedented 25% tax on unrealized gains.

Economic indicators are released every week to provide insight into a country’s overall economic health. They serve as essential tools for policymakers, advisors, investors, and businesses because they allow them to make informed decisions regarding business strategies and financial markets.

Our outlook on the 11 S&P 500 equity sectors.

With recent cooling in economic growth, an uptick in unemployment, inflation moderating back to the Federal Reserve’s (Fed) 2% target, and expectations for rate cuts, we believe the winds are shifting in the U.S. fixed income market.

After market expectations spiked to nearly five interest rate cuts in 2024 based on disappointing labor market report early in the month, reassuring data in the form of Retail Sales and Unemployment Claims have quelled market Markets have eased expectations for interest rate cuts, pricing closer to four cuts as of the end of last week.

If interest rates decrease over the next 12 months, as the market expects, long duration bonds could potentially provide equity-like returns for investors.

It’s widely expected that the Federal Reserve will cut interest rates next month, perhaps by as much as 50 basis points. That would potentially provide a much needed positive jolt to bonds and fixed income ETFs.

Since our last update of the Three Tactical Rules on June 25, 2024, equity markets have retraced most of the rally from the spring. The change in market sentiment came abruptly, due to the labor market showing signs of weakness as the number of jobs available per unemployed worker fell to 1.2 and the unemployment rate rose to 4.3%. The recent market volatility has had a dramatic impact on our tactical rules.

Amid expectations of rate cuts from major central banks, managers are increasing their exposure to more cyclical and value-oriented names, including autos, transportation, and short-cycle industrials.

Since the end of the financial crisis, economists, analysts, and the Federal Reserve have continued to predict a return to higher levels of economic growth. The hope remains that the Trillions of dollars spent during the pandemic-driven economic shutdown will turn into lasting organic economic growth.

Active management can lead to high portfolio turnover and a higher tax bill. Wealth managers might feel that an active strategy could be too inefficient for clients who are sensitive to taxes. Find out how implementing a core-satellite portfolio with a direct indexing core may improve tax efficiency.

Economic indicators provide insight into the overall health and performance of an economy. They are essential tools for policymakers, advisors, investors, and businesses because they allow them to make informed decisions regarding business strategies and financial markets. In the week ending on August 15th, the SPDR S&P 500 ETF Trust (SPY) rose 0.14% while the Invesco S&P 500® Equal Weight ETF (RSP) was up 2.45%.

Last week, we explored the old economic rules that falsely predicted an imminent recession. Losing those guideposts has complicated our efforts to craft an outlook.

Looking back at the 14 Fed rate cycles since 1929, certain patterns emerge. Still, investors instead need to examine what factors are driving the Fed now.

Silver is an important component of solar photovoltaic (PV) panels, meaning that for China to reach its ambitious climate targets, it must import massive amounts of the white metal. In June alone, China spent over $228 million on silver, a new monthly record based on Bloomberg data going back to 2009.

Head fake is a trading term, too. Some bit of information convinces investors a market is going to move a certain way. They reposition their portfolios accordingly… just in time to find out the information was wrong. Oof.

June’s rate of inflation showed, for the first time in several years, an important slowdown in shelter costs, something that economists, us included, have been expecting for a very long time but had not materialized.

Markets were recently rattled by concerns the U.S. may slip into recession, but it's not clear that those fears are justified.

Portfolio Manager Jeremy Sutch, CFA, and Chief Investment Officer Sean Taylor assess the issues besetting the region’s key markets—from domestic challenges to geopolitical headwinds—as well as their structural strengths, and whether prospects may brighten with the onset of a U.S. rate-cutting cycle.

As much as my two-pronged dividend strategy works in all markets, we still need to acknowledge that politics influences the market. Sometimes it’s a tangible impact like big swings in the price of oil. Other times it’s just investor sentiment moving the market.

It’s a good time to check on consumer health.