Markets

Explore how election momentum and economic shifts are shaping market volatility and interest rate expectations. Gain insights into how the Fed’s recent moves and consumer spending trends might impact stocks, bonds, and broader economic growth in the coming months.

China's government recently took policy actions to support economic growth by bolstering the country's property market and stock market. They represent a sea change from President Xi Jinping's previous stance in which he refrained from undertaking bold government stimulus.

Investor optimism has been boosted in the U.S. and China due to recent policy developments—the Federal Reserve's decision to cut interest rates by half a percentage point and an easing of monetary policy and a larger-than-expected fiscal stimulus package in China. Meanwhile, the upcoming presidential election has not had a major impact on financial markets to date. Amid this, we explore portfolio positioning.

Gain timely insights into the Fed's larger-than-expected rate cut, learn what to watch from upcoming labor market data, and explore the outlook for mortgage rate movement and investment implications.

Learn how structural changes in leveraged credit markets are reshaping high-yield credit spreads, and gain insights for strategic portfolio positioning.

Following the soft July jobs report that showed a 4.3% unemployment rate (up from 4.1% in June), some commentators worried that the Federal Reserve had waited too long to ease monetary policy to stave off a recession.

Stay ahead of the markets with our September 2024 Market Pulse, exploring the anticipated impact of the Fed's first rate cut and the evolving risks in equities.

As the U.S. economy remains resilient and inflation shows signs of moderating, the Fed is holding interest rates steady, aiming for a 2 percent inflation target. Meanwhile, the stock market has reached new highs driven by robust corporate profits and AI optimism, although high valuations may limit future gains.

As the Federal Reserve prepares for its next interest rate decision, mixed signals from the labor market present a complex picture. While nonfarm payrolls show strong growth, other indicators suggest a softening job market.

Will the Tax Cut and Jobs Act of 2017 be extended next year when many provisions are set to expire?

Recently, the dollar has surged against key Asian currencies, but does this pose a genuine problem for the U.S. and Japan?

The debate among investors at the beginning of 2024 focused on how long the economy could sustain above trend growth and whether inflation would continue to decelerate. As we look ahead, most economists have lowered the likelihood of a recession this year considerably amid continued strong economic data, but risks to the bullish outlook remain.

The question of "how concerned should investors be about the Western Alliance" is being raised on both sides of the Atlantic following recent statements by former President Donald Trump regarding NATO, in which he indicated a willingness to support Russia in its actions against NATO members who fall short on defense-spending goals.

An inverted yield curve, in which yields on longer-dated bonds are below those for shorter-dated instruments, has correctly predicted the last nine U.S. recessions in the post-World War II era. However, this winning streak could be coming to an end, as the U.S. economy has displayed surprising resilience to the Federal Reserve’s tightening during the past two years.

Last year was not a good time for China’s stock markets to say the least. The Shanghai CSI index and Hong Kong index ended 2023 down by 11% and 14%, respectively, while the MSCI World index closed the year 22% higher.

What does the January jobs report mean for the strength of the economy and possible implications for the 2024 elections? And how does this impact the debate about whether the economy is headed for a recession?

One of the most important issues for investors and policymakers alike is understanding the potential impact that generative artificial intelligence (Gen AI) models will have on the economy and labor market.

Financial markets often surprise investors, but the past year defied virtually all forecasts. The prevailing view at the start of the year was that aggressive tightening by the Fed would produce a recession. Instead, economic growth far surpassed expectations at 2.6% according to Fed estimates.

While global investors focus on the prospects for the U.S. and China, they should not overlook the euro zone, where the economic outlook has shifted this year. The initial consensus was that Europe would be adversely impacted due to its heavy reliance on Russian natural gas. Instead, the euro zone economy proved resilient, primarily because of unexpected plunges in natural gas prices and crude oil.

Investors have come to accept that the Fed will keep rates “higher for longer.” Meanwhile, prospects for a soft landing have improved as core inflation has come down significantly this year. Still, investors must assess whether the U.S. economy can stay resilient now that interest rates are positive in real terms and economies abroad are weakening.

The first half of 2023 was full of surprises. Bond yields surged initially and then subsequently fell back in early April when several regional banks encountered problems. By midyear, however, yields had risen again as the economy proved resilient to Fed rate hikes. Meanwhile, the S&P 500 Index, which had fluctuated in a broad trading range since mid-2022, broke decidedly to the upside in the second quarter, reaching its highest level since April 2022.

After fluctuating in a broad trading range since the middle of last year, the S&P 500 Index broke decisively to the upside in June, reaching its highest level since April 2022.

Many investors are uncertain about what to do with spare cash. Fortunately, for the first time in more than a decade, they can earn a reasonable return on their cash holdings now in money market funds.

One of the biggest anomalies so far this year is how calm the U.S. stock market has been while gyrations in bond yields have been unusually large.

The Fed is following its standard procedure of separating the conduct of monetary policy, which is geared to achieve low inflation and full employment, from regulatory policy that is intended to preserve financial stability. The view is that monetary policy should not be altered when a financial institution becomes insolvent unless it is systemically important. While this makes sense in theory, there are many gray areas in implementing policy.

The bond market experienced one of the most volatile quarters in history in the first quarter of 2023. There also remains uncertainty about how widespread issues are in the banking sector and how these could impact the economy as a whole. We believe that if a recession does transpire, it will be mild, as household and business balance sheets are strong.

Russia’s invasion of Ukraine caused not only a geopolitical earthquake but also a storm of uncertainty for U.S. investors and the global economy at large.

Are investors still striking the right balance with the popular 60/40 portfolio?

When President Biden assumed office two years ago, proponents of free trade hoped it would signal a break from President Trump’s protectionist stance. To the chagrin of many, Biden’s trade policy remains a mystery.

This question has surfaced in the wake of blockbuster jobs growth in January. Nonfarm payrolls increased by 517,000 and were accompanied by upward revisions in the two previous months, while the household survey posted nearly a 900,000 increase. They resulted in the unemployment rate falling to 3.4%, the lowest level since 1969. Is this a statistical fluke?   

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.