Raymond James

While the expectation is Congress will raise the debt ceiling, the process is likely to be volatile.

We provide an update on the 4Q24 earnings season and explain why our positive outlook on tech- related companies remains unchanged.

Tariffs seem to have become a staple of Americans’ dictionaries lately as the new administration uses this policy instrument to achieve objectives that are not directly tied to the reasons tariffs have been used in the past.

Raymond James CIO Larry Adam looks at how the proposed tariffs may impact the economy and financial markets.

The equity market appears to be showing signs of broadening beyond technology.

After this week’s FOMC decision to hold the fed funds rate unchanged, markets and analysts concluded that Federal Reserve members had changed their views on inflation.

When constructing a portfolio, investors who are seeking income have a range of options to choose from.

The global economy will grow at a pace close to that achieved in 2024, notes European Strategist Professor Jeremy Batstone-Carr.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

Next week we will have the first Federal Open Market Committee (FOMC) meeting decision on interest rates of the year, where Federal Reserve (Fed) officials are expected to leave the federal funds rate unchanged.

Senior Investment Strategist Tracey Manzi notes that the Federal Reserve's ongoing easing cycle should benefit short to intermediate maturities.

It is sometimes perceived that the Fed’s action changes all interest rates across the yield curve, but that needs to be put in perspective.

We understand that the monetary policy playbook since the Bernanke Fed and the Great Financial Crisis has changed considerably.

As we close the chapter on Biden’s presidency, we take a moment to reflect on his legacy.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

US equities had a stellar 2024, with the S&P 500 up 25%, but the year ended on a softer note. The sharp rise in bond yields has caught the market's eye

Managing Director, Washington Policy Analyst Ed Mills looks at how several of the top market-relevant Washington DC issues could play out in 2025.

The US labor market has remained relatively strong, but the trend over the last year or so has been one of normalization back to the pre-pandemic levels.

Chief Economist Eugenio Alemán and Economist Giampiero Fuentes break down the factors likely to impact economic growth, inflation and interest rates.

Although underlying fundamentals and company financial statements can be difficult to analyze, the general public can easily discern price movements and understand the primary objective—buy low and sell high.

As we turn the page on 2024 and look ahead into 2025, the key question on investors' minds is: can 2024’s positive momentum in the economy and financial markets continue into 2025?

The most important issue regarding what lies ahead from an economic perspective is that the economy’s fundamentals remain solid with very few misalignments that could derail it, at least for now.

The year ahead may present challenges as markets and the economy look to maintain momentum.

December's market activity highlights the need for caution in the near term.

One of the benefits of purchasing property as an investment is the tax benefits that can come with it – both while you own it and after you sell. Applying tax-efficient strategies will help you make the most out of your investment property.

Annuities can provide a guaranteed lifetime income stream in retirement, no matter how long you live. They thrive under high interest rate environments and are currently offering the highest payouts seen in years.

Happy Holidays! As the page for the new calendar year will soon turn, three cheers for a happy, healthy, and prosperous new year! With 2024 rapidly drawing to a close, we reflect on the year and all that’s transpired—our readers are wonderful, the economy remains in good shape, and market returns have been stellar for those who participate.

Since we are not going to publish Weekly Economics on December 27, 2024, we will take this opportunity to say farewell to 2024 and to all our readers, we want to wish you a very happy holiday season and a very prosperous New Year 2025!

Start the new year right by reviewing and revamping your financial plan.

With persistent inflation and a resilient economy, the Fed's updated projections show two rate cuts next year.

As we approach the start of a new year, it is a good time to take a fresh look at your portfolio to ensure that it still aligns with your long-term goals.

As we approach next week’s Federal Reserve FOMC meeting ... it would be interesting to ask ourselves what we would do if we were members of the committee.

Help overcome market timing and loss aversion with dollar-cost averaging.

The markets sure had a lot to process this year – from surprisingly resilient economic data, to the Fed kicking off its easing cycle to an unprecedented presidential election season.

As the office buildings market faces headwinds, investors look to alternative sectors.

While politics garner headlines, fundamentals drive the market over the long term.

The 2024 wild ride has proven to be a continuation of last year’s.

As we look through our financial lens and reflect upon everything that has transpired in 2024, we have compiled a list of the top ten economic and market-oriented things that we are most grateful for this year.

There has been a lot of talk about (in)efficiencies in government spending, both before and since the election. Much of the conversation has been driven by Elon Musk, who will co-head the Department of Government Efficiency (DOGE, not an actual government agency). Musk has boasted he could find $2 trillion to cut from the federal budget.

The Treasury yield curve has shifted appreciably all year long. In particular, the last few months have realized substantial rate changes. The shift in the Treasury curve is not isolated. The corporate curve is also changing.

Wait, what? The Fed cut interest rates and bond yields went up, not down. Yes, you read that right.

The Federal Reserve (Fed) Chairman seems to be happy with the market’s new wisdom regarding the path of interest rates going forward.

Your fixed income strategy does not necessarily need to be adjusted based on every personnel or environmental change.

With the outcome of the election now known, we will continue to assess how policy changes impact our broader view.

The yield on the 10-year Treasury surged to about 4.4% just after the election, even though it has come back down close to pre-election levels recently.

Explore how these two investment types compare.

Volatility is likely here to stay until we get some level of clarity on the political landscape.

Better than expected economic data drove interest rates higher, changing the market narrative and contributing to an equity market pullback early in the month. This unraveled expectations of further rate cuts by the Federal Reserve (Fed) and resulted in real rates moving higher. The 10-year Treasury has moved up 48 basis points, ending the month at 4.27%.

As you know, economists are normally criticized and accused of being ‘two-handed.’ This is because when we talk, we typically say, “on the one hand, and on the other hand.” Many argue that we are hedging our bets and lack the spine to take a position. While we disagree with that simplistic view of our job, we can understand why we are accused of being ‘two-handed.’

Get ready to ‘roll back’ the clocks! That’s right, Daylight Savings Time (DST) ends this weekend. This twice-a-year ritual is followed by every US state (except Arizona and Hawaii) and nearly 70 countries across the globe, but not everyone supports it.

Yields have risen from the dead since their recent lows in mid-September presenting investors with an opportunity that many were scared had disappeared following the FOMC’s 50 basis point rate cut at their last meeting.

The long and winding road to one of the most unusual presidential elections in history is coming to an end – with Election Day now just 11 days away.

Talking and exchanging communication with advisors and clients over the last several years has shown that many of them are concerned about the fiscal path of this country and the consequences it is having on our debt.

Senior Investment Strategist Tracey Manzi notes that while the predictive power of the inverted yield curve has waned this cycle, investors shouldn't dismiss the warning signs entirely.

The FOMC lowered the Fed Funds rate by 50 basis points at their September meeting. This was the first cut in over four years and the start of what is expected to be a multi-year easing cycle.

From current data, it is clear there are no signs the U.S. economy is currently facing challenges.

The S&P 500 is on track to deliver its second consecutive year of 20+% returns – a milestone it has not achieved since 1998. It is also on pace to deliver its strongest performance leading into an election year since 1932.

While tariffs have been utilized heavily in the past, both their usage and rates have fallen considerably over the past half century as countries have engaged in different stages of trade negotiations.

A tariff is a tax assessed on imports. Historically, tariffs have been enacted to generate tax revenue or to protect domestic producers from competition in the form of cheaper foreign goods. In essence, tariffs artificially make domestically produced goods more competitive in the local market by making imports more expensive.

Since hitting the October 12, 2022, low, the S&P 500 has climbed 65.9%! By historical standards, there is still plenty of room for the current bull market to run

The disruptive effects of the pandemic are still reverberating across the economy and giving incorrect signs, in this case, of the U.S. labor market.

We have openly promoted increasing duration over the last several months. An increase may seem like an odd “wish” as it implies taking on greater price risk.

A series of unprecedented and historic events has completely shifted the candidates and dynamics of the race for the presidency and Congress.

Just like road trips can bring unexpected detours, the economy and financial markets are at their own crossroads: recession or soft landing?

The recent fears regarding the state of the U.S. employment sector seemed to have disappeared completely this morning as markets are ‘recalibrating’ their view on the U.S. economy going forward.

As we look at today’s economy and financial markets, we are at a crossroads: Will it be a long straight highway to a soft landing, or will it be a bumpy road to recession?

September is typically the weakest month of the year for stocks, but thanks to the much-anticipated federal funds rate cut, the S&P 500 turned in its first positive performance in a September since 2019

For many investors, the fixed income portion of their portfolio is intended to be the ballast of the portfolio.

The economy reached an inflection point, with labor market conditions squarely in focus.

After the first rate cut in two years went according to market expectations as the Fed reduced the federal funds rate by 50 bps, markets have continued to run with the Fed’s ball and seem to have a ‘sugar rush.'

Explore fixed-income tools that generate income and infrastructure.

Fixed income strategy and opportunities have remained relatively unchanged over the past few months. However, the much-talked-about monetary policy change has commenced.

The seasons are changing. This weekend marks the autumn equinox—a time of year when the days get shorter, the weather gets cooler, and the leaves start to turn (at least for our friends in the north). While our calendars will show that fall has officially arrived, it may not feel like it as much of the nation will be enjoying unseasonably warm weather.

After more than six months of indicating that it lacked conviction regarding the path of inflation, the Federal Reserve (Fed) seems to have gotten a conviction boost so large that it pushed it to lower the federal funds rate by 50 basis points at the September Federal Open Market Committee (FOMC) meeting.

More than two years after first taking steps to contain swelling inflation, the Federal Reserve (the Fed) has taken a step back, suggesting monetary policy decision-makers have confidence that inflation will continue to move closer to the Fed’s target, allowing them to turn some attention to economic growth.

The half-percentage point reduction at the September 17-18 FOMC meeting represents the largest non-COVID era cut by the Fed since 2008.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

The Federal Reserve (Fed), and markets, overreacted to the slightly higher inflation seen during the first quarter of the year. After that scare, the Fed went from expecting three cuts in the federal funds rate in 2024 to just one cut during its June dot plot release.

The time has come! After the most aggressive tightening cycle in modern history, the Fed is ready to turn the page and begin dialing back its policy restraint after the second longest ‘on hold’ period (14 months) in history. Barring any surprises, the Fed should lower interest rates at its meeting next week—the first rate cut in over four years—in the hopes of preserving a soft landing for the economy.

Fed officials must recalibrate their policy stance to ensure the economy stays on solid footing to achieve that elusive soft landing they have been aiming for after their quest to quash inflation.

Investors may find themselves prognosticating about future rates relative to current rates in an attempt to optimize their portfolio.

August’s employment report, which was weaker than markets were expecting but stronger than our call, cements our view that the easing cycle will begin during the next FOMC meeting, September 17-18.

When we’re viewing markets, it’s not surprising sentiment shifts quickly if we don’t instantly see the anticipated results. Market pundits quickly point fingers and determine the Fed, economists, and participants are wrong. Reactions can be powerful in number and sway momentum for stocks and/or bonds.

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

Happy National Cheap Flight Day! Yes, you heard that right—there is a national celebration day to mark the start of a lull in travel demand. Who knew this would be a day to celebrate? Regardless, it’s good news for consumers as airfares should continue their recent downward trend!

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.

As recently as the beginning of this year the market pundits were predicting up to six Federal Reserve rate cuts to the short-term Federal Funds Rate. Shockingly, the pundits’ expectations have not come to fruition. Predictions based on the sentiment of the day fill the twenty-four-hour news cycle on multiple outlets.

This week marks the ‘unofficial’ end to 2Q24 earnings season – and aside from a few wobbles, it has been reasonably good. S&P 500 earnings growth came in at a solid 11.2% YoY pace – its best quarterly performance since 4Q21.

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.

Your portfolio can be the key to managing cash and maintaining flexibility.

The flexibility offered through individual bonds translates well for tailoring individual financial goals and needs.

During volatile times, it is important to maintain perspective, stay focused on your long-term objectives, and avoid knee-jerk reactions based on the latest twists and turns in the market.

When the Federal Reserve (Fed) cut rates in response to the COVID-19 pandemic, mortgage rates fell below 3% in 2021 and many households refinanced or obtained new loans.

Hastily, investors have turned their worry about inflation into worry about a recession. The catalyst was Friday’s unexpectedly disappointing unemployment number.

Take the market narrative with a grain of salt and look at the fundamentals in determining your outlook for the economy and financial markets. We ultimately believe this soft patch of data will prove to a be a ‘growth scare,’ not a ‘recession reality.’

The relative weakness in July’s nonfarm payroll employment number and the increase in the rate of unemployment from 4.1% in June to 4.3% in July, triggering the Sahm Rule is a reminder of the difficult tasks ahead for the Federal Reserve.

While election news dominated July's headlines, small-cap stocks had their best monthly performance relative to large-cap stocks since December 2000.

The Federal Reserve noted that inflation is moving closer to its 2% target after electing to hold rates steady at its July FOMC meeting.

We are approaching a turning point in policy decisions as the FOMC attempts to walk the fine line of hitting their inflation targets while maintaining a healthy labor market.

The Federal Reserve (Fed) doesn’t like to spook markets, that is the reason why it has crafted its communication on monetary policy to give indications way in advance and nothing has been pointing to a change of heart that could lead to a surprise move next week.

Following the historic decision by President Biden to drop out of the 2024 race, Raymond James CIO Larry Adam provides insight into his team's economic and market outlook.

There are many advantages and risks associated with any investment. Whether you are buying a stock, a house, a business, or a bond, each investment has unique characteristics that allow an investor to gain from particular investment features with varying risks.

As we start the second half of 2024 and we approach next week’s release of the preliminary report on real GDP for 2Q, we continue to expect 2H economic growth and inflation to downshift versus what we saw during 1H of this year.

Artificial intelligence is set to become a game changer for the electric power industry, notes Pavel Molchanov, Managing Director, Energy Analyst, Equity Research.

The dilemma that all Fed committees and chairpersons face when the economic cycle nears a turn but then repeats itself can be summed up with Fed chair Jerome Powell’s recent references: “Easing too soon, too much could harm inflation progress.” “Easing too little, too late could unduly weaken the economy.”

This week marks the official start to 2Q24 earnings season, with the big banks among the first to report. While much of the last six weeks has been dominated by the softening macro backdrop, the S&P 500 looked past the weakening data – notching 37 record closes already this year.

We want to repeat what we have said in the past: “One data point doesn’t a trend make.” However, the June data, after weaker than expected readings for April and May, confirm our suspicion that inflation numbers during the first quarter of the year were a fluke.

After a fruitful career and plenty of practice paying taxes, you may feel prepared for the tax man in retirement. But a review of your post-retirement taxable income may yield some surprising insights.

It’s an election year, which means you can expect to hear presidential candidates being asked about their plan for preventing Social Security from going bankrupt.

The global population has surpassed 8 billion and according to the United Nations, it is projected to reach 9.7 billion in 2050.¹ However, the rate of population growth is slowing and is expected to continue to decline. Seems counterintuitive, no?

It’s inevitable. A recession is coming. Whether it gets here next month, next quarter, next year, or next decade will be continuously debated until it arrives. Yet, one thing that everyone will agree on is that we will have another recession eventually.

Having hit 31 record highs since January and up more than 15% year to date, the S&P 500 is off to its best start to the year since 2019 and the best start to an election year ever, driven by mega-cap tech stocks and artificial intelligence (AI) tailwinds.

We’re borrowing from the upcoming Paris Summer Olympics for our quarterly theme – with a twist. Instead of using the most popular events (like gymnastics, swimming, and track & field) to express our views, we’ll go beyond the spotlight.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

Key Takeaways

• The Fed will cut rates twice to support growth
• Interest rates are poised to tip lower
• The equity market should keep climbing longer term

Retail trade sales in the U.S. are reported by distribution channel. For example, gasoline sales are reported through the gasoline stations distribution channel, although those gasoline stations’ sales also include everything else sold at gasoline station convenience stores, i.e., hot dogs, tobacco, sodas, gum, chips, coffee, etc.

As you move through retirement, it’s important to set time aside to reflect on how you’re doing. While most people often focus on their health and finances, it’s equally as important to think about other areas of your life as you approach the midpoint of your retirement.

Although bonds may not always be able to significantly contribute to growing an investor’s wealth, their lower risk profile can bring comfort in positioning an investor to maintain that wealth.

After the S&P 500’s incredible run—up 57% from its October 2022 lows and with an election on the horizon, its normal for investors to wonder whether to take some chips off the table or hold off on investing to see what happens.

Total net worth, or household wealth, has reached a new record high, at least in nominal terms. This has pushed many to argue that Americans have been using the accumulation in net worth to increase consumption.

The Federal Reserve policy can set the tone that drives interest rates across the maturity range but an earlier market rate downturn can occur as a signal of investor perception of a slowdown in the economy.

The S&P 500 surpassed its 27th record high for the year this week—and still notching more (up to 29 already!)—driven by rising earnings, cooling inflation, and an economy that remains on solid ground.

For those of you who are not math geeks, ‘rise over run’ is the formula for the slope of a line. What does this have to do with the latest Federal Reserve (Fed) decision, you may ask?

The updated projection shows the likelihood of one rate cut by the end of 2024.

We are moving our first federal funds rate cut to September of this year compared to our current July call although we are going to get more information from Federal Reserve officials after the release of the Summary of Economic Projections and the new ‘dot plot’ on June 12.

Personal Consumption Expenditure (PCE) measures the price paid for goods and services by consumers. It reflects changes in consumer behavior and captures inflation (or deflation) across a wide range of consumer expenses. Prices for both goods and services are measured.

Why is there so much angst among investors? The mixed economic signals may have a lot to do with it.

Positive corporate earnings and greater participation from sectors other than technology carried stocks forward.

We connect the dots between the micro data points (what we learned during 1Q earnings season) and what we expect the forthcoming macro data will reveal about the state of the economy.

Survey after survey has been indicating that Americans feel worse off today compared to the recent past; so much so that many of them indicate the economy is currently in recession, that the rate of unemployment is the highest in several decades, that inflation is very high today, etc.

It’s natural to avoid loss, but sitting on the sidelines out of fear might lead to missed financial goals.

Market factors are constantly changing and require monitoring, analysis, and flexibility by the investors when it comes to choosing appropriate investments.

As we set our sights on the summer, here are five dynamics that could drive the financial markets between Memorial Day and Labor Day:

We are free trade enthusiasts, in economic terms, even at a time when free trade has been losing some of its aura within the U.S. political system.

As goes the consumer, so goes the U.S. economy. As Wall Street knows, the importance of the consumer cannot be overstated. That’s because consumer spending is the main engine of growth, representing ~70% of US economic activity – nearly 10% more of the economy than it did in the early 1980s.

To say that inflation data during the first quarter of the year surprised us and the markets is clearly an understatement and by Tuesday of this week, with the higher-than-expected Producer Price Index (PPI) print for April, markets were clearly on edge as they were also potentially expecting a higher reading for the Consumer Price Index (CPI) on Wednesday.

More than 338,000 Americans relocated for retirement last year – a 44% increase from 2022 – and about a quarter of those retirees moved to a different state.

The finance world can get complicated, especially for the passive or uninterested investor. Let’s face it, some of us are not curious about sports, movies, exercise, reading, or other things while others of us carry a passion for them.

Happy National Small Business Day! Every year on May 10, small businesses are officially recognized for their contributions to the US economy. And rightfully so. Small businesses are the backbone of the US economy.

Markets seem to have been basking in the spring sun as they wait for the approaching summer heat, so to speak.

A recap of the important drivers, along with our views on how things will play out over the rest of the year.

It can be easy to overthink the markets and it is human nature to try to out-guess, out-maneuver, or out-smart the average, but perhaps we can step back and simplify what seems to be occurring.

We try not to react to just one data point because, as we have always said, “a data point doesn’t a trend make.” Furthermore, we don’t know if this is just a one-time event or if it is the start of something more.

The Federal Reserve is looking for more confidence that inflation is headed back towards its 2% target before commencing with rate cuts.

The S&P 500 experienced its first 5% pullback since October 2023, but the long-term outlook remains positive.

One of the main advantages of constructing a portfolio of individual bonds is that it can be customized to meet the precise needs, wants, and objectives of the investor

The reaction from markets to the release of Q1 2024 real GDP results has given every sector of the market another chance to give their own interpretation of what is coming regarding Federal Reserve (Fed) policy, inflation, and the federal funds rate.

Discover the reasons investors diversify their portfolio with alternative investments.

Timing has never been a crucial undertaking for fixed income allocations dedicated to asset preservation largely because this is a long-term endeavor dedicated to keeping an investor’s wealth intact.

We put the recent market movements in perspective, which have been driven by time (it has been a while since we had a 5%+ pullback), overly optimistic, complacent market sentiment, and higher Treasury yields amid persistent inflationary pressures and signs of a more patient Fed.

The impact of high inflation on individuals’ finances is not something to take lightly, especially in the U.S., because for almost 40 years we have had no experience with such an event and have no clue how to deal with it or how to try to minimize its negative impact.

For a typical consumer, the two most hot-button topics are food and energy. Both play a significant role in household spending, and just as importantly, both are highly visible.

Fed Funds Rate: According to Bloomberg calculations based on where Fed Funds futures are currently trading, there is a 20% chance that the FOMC cuts the overnight rate in June and a ~50% chance that they cut in July.

Growth and inflation have remained remarkably resilient since the start of the year, causing the market to once again rethink the Fed’s rate path. As a result, the odds of a June rate cut have collapsed

Before we start discussing the Consumer Price Index again, we want to remind readers that CPI inflation is not what Federal Reserve officials use to determine monetary policy. It is true that markets put a lot of emphasis on this measure, but we would like to caution giving too much importance to it.

Senior Investment Strategist Tracey Manzi notes that with a Federal Reserve easing cycle on the horizon, the fixed income markets are relatively attractive.

This week’s discussion is a follow-up to last week’s overview of the elongation of the economic cycle.

While artificial intelligence and new technologies have captured the market's attention, this quarter we reminisce about the good old days and a key piece of technology that has endlessly entertained us all – classic video games.

Can Federal Reserve (Fed) officials live with such a strong labor market and still start lowering interest rates in June or July?

We are normally reluctant to use trendy phrases to explain either our good and/or bad calls regarding the U.S. economy. However, saying that ‘this time is different’ is more than fitting today to understand what has happened to the U.S. economy since the recovery from the COVID-19 pandemic.

Market rally driven by a broadening of the market and optimism that the Federal Reserve will deliver rate cuts later this year.

With technology changing the way we live, we are taking a trip down memory lane to look back at a piece of technology that has entertained generations: classic video games.

For lack of a better word, the fixed-income mantra is getting stale. Interest rates have peaked, and they remain at elevated levels, allowing investors to take advantage of higher income and ample cash flow opportunities.

The Federal Open Market Committee (FOMC) comprises the Federal Reserve System’s decision-makers on monetary policy in the United States. This monetary policy is designed to keep the Fed’s dual mandate of maximum employment and price stability in line with targets.

Larry Adam takes stock of how the economy and markets have performed since the beginning of the year and take a fresh look at where we are heading as we progress through the year.

Markets have taken the Federal Reserve (Fed) decision to keep about 75 basis points (bps) cuts in its dot plot as a very positive sign that the Fed is going to actually cut 75 bps during the year and are still acting upon the news.

The central bank will look to cut interest rates three times by the end of 2024.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

Do you know that the headline Personal Consumption Expenditures (PCE) was 2.4% in January while the core PCE was 2.8%? This is very close to the 2% target.

With the U.S. economy posting two consecutive quarters of 3%+ GDP growth, recession calls have quieted down.

For many investors, fixed income is intended to serve as the ballast of a portfolio. This means that it hopefully provides stability in turbulent times while providing consistent and known income, cash flow, and return of principal.

Sometimes, and February was one of those times, the information on the U.S. labor market doesn’t make sense. Many argue that government agencies are cooking the books.

The move higher in the S&P 500 has been historic. In fact, the S&P 500 has climbed ~17% over the last four months and is on pace to rally 17 of the last 19 weeks.

Recessions are part of the economic cycle. No one looks forward to a recession because of the pain it can impose on investors or worse, job security.

The economy continues to hum along (Atlanta Fed 1Q24 GDP estimate: +3.0%), albeit shifting down a notch from the pace seen in the final quarters of last year.

Personal income increased more than expected in January, up 1.0% (or $233.7 billion). The increase in January closely matches what happened in January of 2023 when it increased by 0.95% (or $213 billion).

Equity investors didn't mind the extra day this February as both domestic large-cap stocks and small-to-mid-cap stocks saw steady gains through the month, bringing both groups into positive territory year-to-date, though the latter continues to lag.

Rob Tayloe discusses fixed income market conditions and offers insight for bond investors.

Four years ago this week (2/19 to be exact) the S&P 500 climbed to an all-time high of 3,386 before plunging over -34% as the world economy shutdown due to the pandemic.

From a very weak retail sales report for January 2024 to stronger inflation readings as well as increases in credit card and auto loan delinquency rates during the last quarter of 2023, the picture for consumer demand has weakened considerably.

Even at the risk of sounding like a parrot by repeating the same thing again and again, we think that it is, once again, appropriate at this time to do so: “One data point doesn’t a trend make.”

One of the major benefits of municipal bonds is that the interest earned is exempt from federal income taxes. The appeal of earning money that you do not have to pay taxes on understandably piques the interest of many investors.

Once again, as we have argued several times before, if the Fed, once after having achieved its 2% target and remained at the target for several years, decides that a different target may be more effective for conducting monetary policy, they may decide to change the target.

Most of us associate 529 accounts with college savings. They’re flexible, allowing you to transfer assets to anyone, including yourself, for the express purpose of furthering the education of your beneficiary. But did you know that a 529 can be a powerful estate planning tool?

Mega-cap Tech names have been strong outperformers year-to-date. In fact, a composite of the biggest names, or MAGMAN (MSFT, APPL, GOOGL, META, AMZN, NVDA) is up 12%, while the rest of the S&P 500 is up just 2%.

Whether you have a family member turning 18, or someone in your life looking to build wealth from the bottom up, this primer provides a solid overview of the basic types of securities, investing strategies, and valuable lessons to help pave the path toward financial confidence.

The can has been kicked down the road several times but it feels like the end of the road is in sight.

Markets have made themselves clear for a while: they want more rate cuts than what Federal Reserve (Fed) members seem to be willing to accept at this time.

A period of market volatility and consolidation is likely as markets have already priced in much of the economy's good news.

The Fed concluded its January policy meeting leaving interest rates unchanged, which was widely expected.

The Federal Reserve (Fed) elected to not raise the federal funds rate at the January 2024 Federal Open Market Committee (FOMC) meeting.

For many investors, fixed income investments have a primary objective of preserving wealth. The known characteristics of owning individual bonds are a major reason for this: known income, known cash flow, known redemption date, known redemption value.

In the middle of 2023 we argued that, according to our forecast for GDP at the time for the whole of 2023, employment was growing too fast and that it would have to slow considerably during the second half of the year.

Mega-cap tech-related names (MAGMAN) drove equity returns in 2023. However, heading into 2024 market consensus expected returns to broaden to other equity sectors and market cap sizes.

Many investors buy individual bonds as a means to preserve their wealth. They can serve as a method to balance growth assets (such as stocks).

Treasury yields have steadily climbed since the start of the year, with the 10-year Treasury yield rising back to 4.16% after reaching a low of 3.79% in late December.

The negative side of the strong increase in mortgage rates has fallen on those who did not have a home before the start of the increase in rates and on the ability of those Americans to purchase a home.

Stronger-than-expected growth, concerns about the U.S. government's fiscal outlook and the Federal Reserve's (Fed's) pledge to keep interest rates higher for longer drove yields to levels not seen in decades.

We did an internal survey among our associates, attempting to get a feel for their views on various economic and fixed income topics. Any survey result concerning the future can net inexact results but nonetheless reveal general sentiment. Attitude, outlook, and opinions can help shape the market.

Currently, consensus earnings growth is expected to be 1.3% YoY for the fourth quarter, which would mark a deceleration from 3Q (+6.1%).

We have read plenty of analysis on what the Federal Reserve (Fed) should do as it decides when to start lowering interest rates this year. Much of the analysis is well-intentioned as well as based on very good arguments.

A lot was going on with rates in 2023, yet, at the end of the year how different were things? The 10-year Treasury yield's lowest closing was 3.30%, while its highest close was 4.98%.

The Federal Reserve (Fed) left the door so wide open after the end of the Federal Open Market Committee (FOMC) meeting in mid-December 2023, that markets have run ahead and have continued to push long-term rates lower since the decision was announced.

The long-awaited recession never materialized in 2023 as the sectors of the economy rotated from hot (i.e., travel and leisure) to cold (i.e., housing) over the last few years.

The S&P 500 reversed its 2022 losses, and then some, closing the year near a record high.

Welcome to 2024! As we wade into the new year, you will undoubtedly read and hear a wide range of forecasts predicting what financial markets are going to bring us over the next 12 months.

Here are our 10 themes for 2024. Count on more than a few surprise ingredients throughout the year to spice up the financial markets.

The year 2023 will be remembered by economists and investors as 365 days of resiliency and defied expectations. This week’s Weekly Economics will dive into the U.S. economic landscape and summarize the major factors that shaped the nation’s economic trajectory this year.

The year-end fiscal 2023 government funding bill contained legislation that makes the most significant changes to the U.S. retirement savings system in decades. The SECURE 2.0 Act builds on retirement savings changes passed in 2019 and contains new provisions that further raise the required minimum distribution (RMD) age, shift to automatic plan enrollment and provide for new matching/emergency withdrawal opportunities.

The market has been indecisive but with reason. 2023 has been filled with strong opinions however, many of the opinions are of contrasting beliefs. Reading the future is not easy.

Over the last few months, we have highlighted that the Fed should be done with its tightening cycle based on real-time, high-frequency data that suggested that economic growth and inflation were cooling.

November’s inflation numbers delivered good news for the Federal Reserve (Fed) even though the Consumer Price Index (CPI) was higher than what markets were expecting, with shelter costs surprising to the upside.

The last three years have seen extraordinary market turbulence and ever-changing market narratives – from COVID-19 to inflation, rising interest rates to geopolitical instability.

A tentative timeline toward rate cuts in 2024 was revealed in the updated Summary of Economic Projections.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

To argue that the U.S. consumer has remained resilient has become a cliché and at the same time an understatement. After a very strong increase in real incomes during the pandemic, real income growth started to slow considerably.

Investors are beginning to price in a 'soft landing' as the base case over the next 12 months. This is evident across a number of indicators.

The financial markets, investor opinions, and world events have been all over the place – so bear with me this morning as I am going all over the place with a variety of year-to-date observations and comments.

Our forecast for the federal funds rate has the Federal Reserve (Fed) starting to cut rates in July 2024, with a second rate cut before the end of 2024.

For much of 2023, the market has tried to anticipate a Fed pivot – only to be wrongfooted several times. However, sharply higher interest rates, cooling inflation pressures and moderating wages have the market convinced that the Fed’s current tightening cycle is over.

Drew O'Neil discusses fixed income market conditions and offers insight for bond investors.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

October news on CPI inflation was all the doctor recommended and has markets spinning and repricing the Federal Reserve’s (Fed) potential path forward.

Following the surge in inflation, the most aggressive Fed tightening cycle since the 1980s and multi-decade lows in business and consumer confidence, calls for a U.S. recession have been prevalent all year.

We understand that many economists/analysts/market participants are already discounting inflation as a serious problem for the U.S. economy. Even if this seems correct on the surface, the problem is very different for those who suffer the most from higher prices – middle- and lower-income individuals.

Good news – the earnings recession is over! After three consecutive quarters of negative earnings growth, 3Q S&P 500 earnings are on pace to climb 5% YoY. If sustained, this would be the best quarter of earnings growth since 2Q22.

The 2- through 30-year Treasuries rallied hard to drop yields from 12 to 18 basis points. By example, the 10-year Treasury price bottomed out at $91.86 (4.93%) and peaked at $95.25 (4.48%). This is a 3.4-point price swing or 45 basis point drop in yield.

After the October/November meeting, it seems that Fed officials have an added objective, as Fed Chair Jerome Powell said during the press conference that they needed to see interest rates “persistently high.”

The Federal Reserve (Fed) elected to not raise the federal funds rate at the October/November 2023 Federal Open Market Committee (FOMC) meeting.

While 3Q23 growth showed the economy expanded at a 4.9% annualized rate, it is important to remember that the GDP report is backward-looking.

Yields are at some of their highest levels in over a decade. This means that if you own fixed income in your portfolio, there is a good chance that you are seeing unrealized losses on your monthly statements (fixed income math = yields higher, prices lower).

Chief Economist Eugenio J. Alemán discusses current economic conditions.

Much like Halloween, it has been a scary time for investors.

Higher for longer. The Federal Reserve will likely maintain higher interest rates and remain open to another rate hike. Borrowing costs for households, businesses and governments have risen with soaring rates.

The strength in consumer demand has been one of the defining characteristics of a very resilient U.S. economy and September’s retail and food services sales report confirmed that the U.S. consumer is alive and well.

I was asked a pretty good question following an internal meeting late last week. The question started out by noting that we have been promoting going longer on the curve for a while now and then asking why we think longer-term rates will come down.

With next week’s 3Q GDP report shaping up to be a blockbuster number (the Atlanta Fed GDPNow is tracking a +5.4% growth rate), it is worthwhile to reiterate our thoughts on the economy and how we expect growth to unfold over the next year.

We hear and read daily analysis on how inflation is coming down and that the Federal Reserve (Fed) has beaten inflation. This is probably very close to the truth from an economics point of view.

As a strategist, I work with financial advisors every day creating custom fixed income portfolios based on client’s financial needs and goals – with a keen eye on the importance of a balanced portfolio.

The Federal Reserve (Fed) only controls one rate of interest, and it is a very short-term rate called the federal funds rate, the rate that banks charge each other for overnight, intra-bank loans.

The recent repricing in longer-maturity yields has pushed the 10-year Treasury yield to levels not seen in 16 years.

When the media speaks of the yield curve, they are likely referring to the Treasury yield curve. It is the point of reference for interest rate levels and investment comparison.

As heightened inflation has lingered, the Federal Reserve diminished hopes of 2024 interest rate cuts and economic data suggests a mild recession in the first half of 2024.

Investors had gotten used to smooth sailing with the economy remaining resilient, the equity market soaring double digits, and volatility remaining (mostly) subdued.

While government shutdowns impact the economy directly and indirectly, the magnitude of the impact is determined by the length and scope of the shutdown. Some operations can continue in a “partial shutdown” scenario, and thus impact the economy differently.

Inflation has declined considerably from last year’s peak of ~9.0% to ~3.7%. However, policymakers still think they have more work to do and have signaled that one additional rate hike is likely.

Downside equity market volatility can be unsettling, but it is important to put the pullback in perspective and identify the drivers of the negative market reaction. First and foremost, the equity market was due for a modest pullback.

Anyone who even casually pays attention to the financial media has likely become familiar with the current state of inflation as well as how high interest rates have risen over the past ~2 years.

Wednesday’s Federal Reserve (Fed) decision to keep the federal funds rate unchanged wasn’t a surprise at all. Markets, as we argued last week, had predicted that the Fed was going to stay put and that is what it did.

While our Washington Policy analyst believes there is a path to a resolution to avoid a government shutdown ahead of the looming September 30 deadline, the rhetoric out of Washington suggests otherwise.

For the second time in four months, the central bank decided to not increase interest rates but indicated another hike in 2023 is likely.

Inverted curves (when the gold line goes below the red line meaning that short maturity yields are higher compared to longer maturity yields) have preceded recessions.

Markets are convinced that the Federal Reserve (Fed) is going to pause its interest rate campaign after it finalizes its Federal Open Market Committee (FOMC) meeting on Wednesday, September 20.

The Energizer Bunny! That’s the term that best describes the U.S. economy.

If held until the bond is redeemed (either by call or maturity), the annual yield earned for the life of a bond is known upfront at the time of purchase. Knowing the return on an investment upfront makes long-term financial planning a much easier task.

For the savvy private wealth investor, portfolio diversity is key to success. Investing in infrastructure is one option that can help you both optimize your portfolio and make a positive and meaningful impact on your local community.

There has been lots of speculation lately regarding China’s economic “decline” or potential economic “perils,” so much so that newspaper articles about the coming demise of China’s miracle economic growth over the previous decades continue to take (our) time away from other, perhaps, more important topics.

When you step back and think about it, it is hard to believe that this hugely important retirement benefit has only been around for just over 40 years.

In general, portfolios can be split into growth assets and principal protecting assets. Growth assets tend to have greater risk coupled with greater income/reward.

Last week we changed our economic forecast because the economy has remained stronger than we expected. We delayed the start of the recession to the first quarter of 2024 rather than the last quarter of 2023.

A steady stream of news helped drain enthusiasm from the equities markets through most of August, snapping a five-month growth streak at a time of the year known for cool market performance despite the swelter of its dog days.

While the S&P 500 delivered solid performance this summer, we remain cautious in the near term given the Index remains modestly above our year-end target of 4,400.

Sometimes things sound the same, look the same, or feel the same – but they are not. It doesn’t necessarily mean one is better or worse than another but uniquely dissimilar and serving, unlike purposes.

It’s hard to see your portfolio dip and not panic – especially as you near retirement. Coupled with record inflation, a dip might tempt you to sell your investments to drive cash flow.

Watching coverage of the BRICS (Brazil, Russia, India, China and South Africa) summit in South Africa this week made us wonder why the members of the BRICS decided to name the section, in which Vladimir Putin was addressing the conference by video conference, “BRICS BUSINESS FORUM,” in English, yes?

It’s premature to call off a recession. Lower shelter costs will ease inflationary pressures. Treasury supply dynamics caught the market by surprise.

If you’re interested in investing in mutual funds or exchange-traded funds (ETFs) – or you already have some in your portfolio – you may be wondering what exactly the difference is between an active and a passive fund.

Nick Goetze discusses fixed income market conditions and offers insight for bond investors.

We have heard lots of commentary on the student loan repayment issues facing almost 44.5 million Americans. Some of these commentaries are correct but there are others that miss the mark.

While economic growth drives corporate earnings, remember that the S&P 500 is not a replica of the U.S. economy.

Consumer spending remains the lifeblood of the economy accounting for nearly two-thirds of economic activity.

Once again, markets are taking the elevator while economic data takes the stairs.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

Coming into the year, over 60% of economists expected the economy to enter a recession in 2023. But the economy’s resilience, particularly in the wake of aggressive rate hikes, has surprised the market and supported better than expected earnings growth and the equity rally year-to-date.

For now, and according to the June Summary of Economic Projections (SEP) ‘dot-plot,’ the Fed still has one more 25 basis point increase for the federal funds rate before the end of this year.

Market volatility is an inevitable part of investing. And, understandably, tumultuous times will likely trigger emotional responses to match.

Drew O’Neil discusses fixed income market conditions and offers insight for bond investors.

Raymond James CIO Larry Adam examines the reasons for the decision and what the impact may be on the financial markets.

As that information presents itself, we may see a fair bit of market choppiness. This is why, even though the market’s monthly moves are fascinating and informative, they are far from instructive for a long-term investor.

The question many economists, as well as market participants, asked themselves after the June Federal Open Market Committee (FOMC) meeting was why the Federal Reserve (Fed) paused its federal funds rate hike campaign if they were going to increase it again in July anyway.

Record-breaking heat waves dominate the news headlines, with 2023 shaping up to be one of, if not the hottest year on record. Extreme temperatures are shattering records across the U.S., Europe and in parts of Asia – not just on land, but also in the sea.

After breaking its string of 10 consecutive interest rate hikes in June, the Fed elected to raise the federal funds rate by 25 bps at its July 26, 2023, FOMC meeting.

A professional advisor can craft a tailored, holistic financial plan that supports your needs, goals and intentions for the future.

High-quality investment grade municipal bonds provide growth-like returns for investors in a relatively more conservative investment vehicle than equities. Have your financial advisor assess the opportunity as it pertains to your specific goals.

Mortgage rates are the highest they’ve been in over 30 years, keeping home affordability in unprecedented territory. However, mortgage rates above 7% aren’t the only factor keeping home prices high.

With inflation falling and growth slowly grinding lower, time is running out on many global central bank tightening cycles – especially for the Federal Reserve (Fed) that meets next week.

Markets can present challenges for investors as volatility, direction, supply, outside influences, and future expectations are continuously changing.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

The Fed is executing its playbook according to plan – get interest rates up quickly, keep tightening albeit at a more moderate pace, and then hold rates steady to allow real rates to nudge higher as inflation recedes.

Ed Mills, Managing Director, Washington Policy, discusses how recent U.S. policy decisions are the foundation for an industrial renaissance aimed at building up the economic base and protecting it against certain geopolitical and supply chain risks.

While this is a market estimate and in no way guaranteed, let’s just pretend for a minute that there is a 100% chance of this coming true and the FOMC is going to raise the Fed Funds rate by an additional 50 basis points.

Chief Economist Eugenio Alemán and Economist Giampiero Fuentes note that while it is taking longer to bring inflation down, the Fed will continue to conduct monetary policy to reach its target rate.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

The tech sector was the MVP of the first half. Tech is likely to maintain All-Star status in the second half.

Following a strong start to 2023, CIO Larry Adam and his team share their outlook for the remainder of the year.

Better than expected first quarter earnings, decelerating inflation and growing optimism about a soft, non-recessionary landing have driven the market's positive 2023 start.

Rob Tayloe discusses fixed-income market conditions and offers insight for bond investors.

The U.S. economy grew at a more-than-expected 2.0% annualized rate of growth during the first quarter of the year compared to the previous quarter. In some sense, this rate of economic growth makes a little bit more sense than the previously reported 1.3% rate...

This weekend marks the official start of the Tour de France – one of the biggest cycling events in the world! Cyclists begin their journey in Bilboa, Spain and over the next 23 days will traverse through challenging terrain, covering a grueling ~2,200 miles.

Did you know that American forests offset 12% of total U.S. emissions? With wildfires back in the headlines, Energy Analyst Pavel Molchanov discusses the crucial role of reforestation efforts.

The Federal Reserve (Fed) still has a very tough job ahead to bring inflation down to its 2% target over the long run while facing pressures from markets, which have a very different timetable than the Fed.

This past Wednesday marked the official start of summer! The summer solstice represents the best time of year – the maximum amount of daylight coupled with warm temperatures.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

The surprising resilience of the economy despite the aggressive tightening remains the Fed’s biggest challenge at this point in the cycle. Below we discuss how the Fed’s thinking will likely evolve for the remainder of the year and what it means for the markets.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

Doug Drabik discusses fixed-income market conditions and offers insight for bond investors.

For the first time since beginning the current tightening cycle in March 2022, the Fed opted against raising the federal funds rate at the June 14, 2023, FOMC meeting. The decision officially ends a run of 10 consecutive interest rate hikes by the central bank.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

While the Fed wants to retain optionality on further hikes and affirm rate cuts are not on the horizon for this year, we anticipate that slowing economic momentum and easing inflation pressures will lead to the beginning of an easing cycle in 2024.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

Doug Drabik discusses fixed-income market conditions and offers insight for bond investors.

Managing substantial wealth often requires specialized capabilities and expertise.

Choppiness in the equity market continues as investors look to see a debt limit deal approved.

Nick Goetze discusses fixed-income market conditions and offers insight for bond investors.

Review the latest Weekly Headings by CIO Larry Adam.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

Diversification is a cornerstone of thoughtful, long-term focused investing. Incorporating assets and asset classes that don’t always move in tandem – that is, their returns aren’t strongly correlated – can help temper stock and bond market risk.

Review the latest Weekly Headings by CIO Larry Adam.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

Doug Drabik discusses fixed-income market conditions and offers insight for bond investors.

Review the latest Weekly Headings by CIO Larry Adam. Tighter lending standards still pose a risk. The debt ceiling issue will get resolved. The earnings outlook is improving.

This week’s inflation numbers were mostly positive and benign for the U.S. economy as well as for the Federal Reserve (Fed) and confirms our view that, at least for now, the Fed is done increasing interest rates for this monetary tightening cycle.

Review the latest portfolio strategy commentary from Mike Gibbs.

Lawmakers in Washington set government spending and revenue plans every fiscal year, usually producing a shortfall that many of us know as the federal budget deficit.

Doug Drabik discusses fixed-income market conditions and offers insight for bond investors.

With regional bank volatility grabbing headlines, CIO Larry Adam looks at what this activity means for the economy and asset classes.

Key Takeaways

• Stocks and bonds perform well after the last rate hike
• The bar for cutting rates is higher than it has been in the past
• First-quarter earnings results have been better than feared

If there was a message the Federal Reserve (Fed) wanted to make clear after the end of the Federal Open Market Committee (FOMC) meeting on May 3, it was that it reserves the right to remain hawkish.

On the heels of its 10th consecutive rate hike since March 2022, the Federal Reserve hedged its bets on pausing rate adjustments.

Along with identifying your goals and time horizon, assessing risk is a key part of building a holistic financial plan. And while affluent investors generally have higher risk tolerances, determining their individual risk profiles isn’t straightforward.

As the name implies, loss aversion is our instinct to not just prefer a gain over a loss but to prioritize avoiding losses over almost anything. It might sound wise to try avoiding losses but taking it too far could keep you from realizing your financial goals.

Though equities have proven resilient, more of the long-expected effects of the Federal Reserve’s (the Fed’s) rapid interest rate-raising policy arrived in April.

Key Takeaways

• The Fed’s tightening cycle is coming to an end
• Concerns about the debt ceiling impasse are rising
• Mega-cap earnings will be key to watch

The current Federal Reserve’s (Fed’s) tightening cycle is approaching an end. This has been one of the most forceful as well as the fastest tightening cycle in history. However, because the federal funds rate was well below the neutral federal funds rate, the time it has been above that neutral level has not been that long.

Over the last week, the market saw volatility pick up after approaching the upper end of what we believe is the near-term trading range.

Short-term Treasury yields skyrocketed throughout 2022 reaching levels not seen in almost 15 years. In early October, the yield of the 6-month T-bill topped 4% for the first time since 2007 and by the end of the month had topped 4.5%.

Over the next few weeks, the exciting professional hockey playoffs will determine this year’s Stanley Cup winner! The NHL’s fast-paced playoff games will be sure to keep fans on edge as momentum constantly changes as players skate to a puck that travels up to 100 mph.

Getting lost in the moment is easy to do. When planning and executing your fixed income portfolio, looking long term is more likely to get you to your goal. Fixed income portfolio allocations are often meant to first protect principal and second, to optimize income and cash flow per your specific circumstances.

Start me up! This iconic Rolling Stones song keeps racing through our minds as we glance across the investing landscape. Why? Because it feels like the drivers of this turbulent market – Federal Reserve (Fed) tightening, inflation, recession worries, geopolitical fears – will never stop.

Markets have been very positive this week on better-than-expected inflation numbers. The Consumer Price Index (CPI) printed a better than expected 0.1% in March with the year-over-year rate declining to 5.0% compared to a 6.0% year-over-year rate reported in February of this year.

The stakes are high, and it appears likely that our deeply divided government is headed for another debt-ceiling showdown. Divided governments have typically been good for the markets; however, they often spell trouble when it comes to negotiating fiscal matters.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

CIO Larry Adam shares why his team's market and economic views are tracking more optimistic in light of current volatility.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

In many ways, the process of filling out a bracket is like investing. It requires balancing risk and reward, while maintaining discipline.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

Review the latest Weekly Headings by CIO Larry Adam.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

CIO Larry Adam outlines the positive events that are outweighing negative developments and looks at dynamics to focus on in the week ahead.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

When markets react, consider a broader historical perspective before changing your financial course.

Regulators' prompt response and the creation of a new lending facility should limit broader market fallout from recent bank failures, notes Chief Investment Officer Larry Adam.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.

Recently, many market commentators have been preaching the message that fixed income investors should stick to a low duration strategy.

Review the latest Weekly Headings by CIO Larry Adam.

Markets this month were unable to build upon January's momentum following speculation that the central bank will continue with interest rate hikes.

Review the latest Weekly Headings by CIO Larry Adam.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.

Drew O’Neil discusses fixed income market conditions and offers insight for bond investors.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

Changes for investors include RMD age increases, higher catch-up contribution limits and a new 529 transferal option.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

Review the latest Weekly Headings by CIO Larry Adam.

Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.

2022 was a banner year, and not in a good way.

Drew O’Neil discusses fixed income market conditions and offers insight for bond investors.

Investors may be able to lock in higher yield levels notes Doug Drabik, Managing Director, Fixed Income Research and Nick Goetze, Managing Director, Fixed Income Solutions.

Market volatility and the Federal Reserve's efforts to reduce inflation will continue to garner attention.

Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.

Chief Economist Eugenio Alemán and Economist Giampiero Fuentes examine the factors which will contribute to the U.S. economy's path forward in 2023.

The U.S. economy continually showed its resiliency through a challenging year.

Washington Policy Analyst Ed Mills outlines key components of the new legislation.

Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

The latest adjustment snaps a four-month run of 75 bps interest rate increases by the Fed.

Many have been asking this question since earlier this year, a question that has no easy answer. As economists – us included – continue to forecast the most ‘telegraphed’ recession in history, it is important to point to those things that make this economic cycle very different from past economic cycles.

Review the latest Weekly Headings by CIO Larry Adam.

Drew O’Neil discusses fixed income market conditions and offers insight for bond investors.

While economists have been lowering their employment forecast month over month over month, the U.S. labor market has continued to disappoint those forecasts and has remained relatively strong as well as relatively stable, with jobs growing at an average of 392,000 per month during 2022.

Key Takeaways

• S&P 500 sector dispersion is at multi-year highs
• The Dow is strongly outperforming the S&P 500
• Active management outperforming YTD

Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.

Better than expected inflationary data and corporate earnings reports helped boost S&P 500 to back-to-back rallies for first time since mid-2021.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

As we approach Thanksgiving, it’s the perfect time to reflect on all we are grateful for. From an investor’s perspective, this year’s bear market will certainly not make this list. But even though it has been a challenging year performance-wise, we still believe that investors have a cornucopia of economic and financial market blessings to count!

Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

Review the latest Weekly Headings by CIO Larry Adam.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.

Although the economy is showing signs of slowing down, inflation has remained higher than expected.

The U.S. economy is weak, as GDP numbers in both the second quarter and the third quarter have shown. The fundamental reason why the U.S. economy grew 2.6% during the third quarter of the year was because Net Exports, which is exports of goods and services...

Review the latest Weekly Headings by CIO Larry Adam.

It is difficult to convince yourself that if things are going a certain way they will not continue down the same path indefinitely.

With mortgage rates more than doubling from ~3% to over 7% today the difference in cost between buying a home twelve months ago compared to today is very big.

Key Takeaways

• The third quarter 2022 earnings season may be better than feared
• The consumer is healthy but becoming more discerning
• Strong earnings expected from the energy sector

Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.

Review the latest Weekly Headings by CIO Larry Adam.

As billions of fans eagerly await the 2022 World Cup, CIO Larry Adam draws parallels between the globe’s most popular sport and the current investing environment.

Review the latest Weekly Headings by CIO Larry Adam.

The S&P 500 had its worst day since March 2020, but don't lose sight of the bigger picture, said Larry Adam, chief investment officer at Raymond James.

Chief Economist Eugenio J. Alemán discusses current economic conditions.

Review the latest Weekly Headings by CIO Larry Adam.

Downside volatility has reappeared with markets responding sharply to Federal Reserve comments about the future of interest rates.

Stocks started the month on an upswing but ended with volatility.

Review the latest Weekly Headings by CIO Larry Adam.

Review the latest Weekly Headings by CIO Larry Adam.

While inflation fears remain high, it is likely that we are past peak inflation and the largest interest rate increases are behind us.

We believe that the Fed is going to increase the federal funds rate by 75 bps.

Born in the 1980s, special purpose acquisition companies (SPACs) are growing up. A surge in SPAC activity that started in 2019 only grew in 2020, bolstered by the market volatility brought on by the pandemic – but also by an influx of more serious investors in a previously niche space. By the end of 2021, SPACs had raised $160 billion on U.S. exchanges – a new record that nearly doubled the level of the previous year.

Rough water is ahead, but equity markets may sail higher over the next 12 months...

Where can investors turn when the markets are a riddle? Raymond James CIO Larry Adam seeks advice from antiquity.

Review the latest Weekly Headings by CIO Larry Adam.

Markets flailed in May, seeking certainty amid conflicting signals.

As market volatility rages, Raymond James CIO Larry Adam believes the Fed will likely engineer a soft landing and avoid a severe recession.

The equity market was on cruise control, but now headline congestion has the S&P 500 down more than 17% year-to-date—its worst start to a year in at least 25 years.

The nature of the economy is that there are always causes for concern in strong markets, just as there are reasons for optimism in weaker ones.

Chief Economist Scott Brown discusses the latest market data.

With all eyes on earnings, Raymond James CIO Larry Adam stresses the importance of strong underlying fundamentals.

Chief Economist Scott Brown discusses the latest market data.

Review the latest Weekly Headings by CIO Larry Adam.

Underlying oil market fundamentals – good ol’ supply and demand – are as bullish as they have been over the past decade, says Pavel Molchanov, Managing Director and Energy Analyst for Raymond James Equity Research.

With the US Federal Reserve (Fed) and other central banks going down the path of increasing policy rates, it seemed a good time to look at market impacts over the last 40 years or so.

The March Employment Report was strong. Nonfarm payrolls rose by 431,000 – less than expected but with upward revisions to January and February (a 562,000 monthly average in 1Q22).

Volatility is likely to persist but the U.S. economy has room to grow.

Chief Economist Scott Brown discusses current economic conditions.

Shoots of green are showing up in the markets amid the gloom of geopolitical strife and monetary policy tightening.

Chief Economist Scott Brown discusses the latest market data.

In his monetary policy testimony to Congress, Fed Chair Pro Tempore Powell solidified market expectations that the Federal Open Market Committee will raise short-term interest rates by 25 basis points on March 16 (and not by 50).

Review the latest Weekly Headings by CIO Larry Adam.

While the Russia/Ukraine conflict is troubling, investors need not overreact.

Chief Economist Scott Brown discusses the latest market data.

Review the latest Weekly Headings by CIO Larry Adam.

Review the latest Weekly Headings by CIO Larry Adam.

Chief Economist Scott Brown discusses the latest market data.

Chief Economist Scott Brown discusses current economic conditions.

Punxsutawney Phil—the most famous groundhog—saw his shadow!

Review the latest Weekly Headings by CIO Larry Adam.

Chief Economist Scott Brown discusses the latest market data.

In his renomination hearing, Fed Chair Jerome Powell stressed that the key to maximum sustainable employment and financial stability was keeping inflation low.

This Monday would’ve been Muhammed Ali’s 80th birthday!

The opening ceremony for the Winter Olympics is just four weeks away, but the athletes have spent years training to ultimately experience either the thrill of victory or the agony of defeat.

“Investors should be prepared for the ground to shift repeatedly in 2022,” says Raymond James Chief Economist Dr. Scott Brown.

What can investors expect this year? Above-trend economic growth, at least two interest rate hikes and continued earnings strength among technology stocks, says Raymond James CIO Larry Adam.

The year ended on a high note for the Dow and S&P 500 despite economic challenges posed by the coronavirus and extreme weather events.

As expected, the Federal Open Market Committee accelerated the reduction (“tapering”) of its monthly asset purchases (now expected to end in March rather than June). The policy statement indicated that “job gains have been solid in recent months and the unemployment rate has declined substantially.”

As the end of 2021 draws near, investors are pleased with the impressive performance posted by most asset classes, but we are still awaiting the transition to the endemic state of the virus.

In his congressional testimony of November 30, Fed Chair Powell seemed to shift from cautious to hawkish. However, the evolution of the inflationary outlook had been underway for a while. The spike in inflation in the spring was narrow, the gain concentrated in a few categories.

Have the tables turned? The S&P 500 is just shy of its level prior to the World Health Organization declaring Omicron a “variant of concern.

What’s on the market’s wish list for 2022? Raymond James CIO Larry Adam provides a festive perspective.

The November Employment Report was a mixed bag. Nonfarm payrolls rose less than anticipated, but the unemployment rate fell sharply. The shortfall in payrolls (relative to expectations) likely reflects the usual noise in the monthly data, it might reflect difficulties in hiring, but it certainly doesn’t reflect weak labor demand.

Though the equity markets likely will experience some volatility, the outlook for economic growth remains positive: above-average growth should lead to above-average earnings growth for companies in 2022.

You can learn a lot by talking to people. The economy is “strong,” but also “terrible.” Higher inflation is “transitory,” but also “likely to persist.” Fed policy is “behind the curve,” but also “appropriately positioned.” In truth, the outlook for growth, inflation, and monetary policy is evolving.

Thanksgiving is the time to reflect on all we are grateful for, and given the strides the economy and markets have made over the last year, we have a cornucopia of blessings to count! Between the economic expansion and the S&P 500 up 27% year-to-date, there is quite a long list.

October inflation figures were higher than expected. More troublesome, the range of items with higher inflation, relatively narrow in the spring, appears to be widening. Inflation expectations for the next five years have risen. Higher inflation is dampening consumer sentiment.

Inflation figures surprised to the upside. The Consumer Price Index rose 0.9% in October (+6.2% year over year), up 0.6% (+4.6% year over year) excluding food and energy. Gasoline rose 6.1% (+49.6% year over year). Used vehicle prices rose 2.5% (+26.4% year over year).

Its National Young Readers Week! Whether your favorite childhood author was C.S. Lewis or Judy Blume, you likely remember the joy of reading your favorite book and turning through the pages of witty rhymes and colorful illustrations. I know for me, the times spent reading with my three daughters will always be some of my fondest memories.

As expected, the Federal Open Market Committee (FOMC) announced it would begin reducing (“tapering”) the monthly pace of asset purchases – currently $120 billion – by $15 billion per month but could go faster or slower depending on economic conditions.

As was widely expected, the Federal Open Market Committee announced the tapering of its monthly pace of asset purchases. The criteria for the lift-off in short-term interest rates is more stringent, but as Chair Powell admitted in his press conference, reaching full employment by the second half of next year is “certainly within the realm of possibility.”

This month marks 30 years since the release of the Disney Classic, Beauty and the Beast! Those fondly recalling the film probably remember the iconic songs and cast of household objects that came to life; but the moral of the story is to not be deceived by appearances. Ironically, this same message is quite applicable for investors.

As expected, the advance estimate of 3Q21 Gross Domestic Product showed a sharp slowing in growth. More timely data suggest that the economy regained some momentum into early 4Q21. Still, there are important questions regarding the labor market, inflation pressures, and Federal Reserve policy over the near term.

Earnings reports were mixed. Bond yields declined, as market participants generally expect the Fed to raise short-term interest rates earlier to get inflation under control.

Jeepers Creepers! It’s hard to believe that Halloween is just days away, and as the month of October comes to a close investors will be anxiously awaiting the release of the jobs report next Friday. There has been some ‘toil and trouble’ in the labor market due to the vast number of jobs available yet an inability to fill the openings.

Treasury reported a federal budget deficit of about $2.8 trillion (about 12% of GDP) for FY21. Barring a major unforeseen event, the deficit will fall considerably next year. By itself, that will be a negative for GDP growth, but a further strengthening in private-sector demand should more than offset that.

Expectations of the Fed’s liftoff in short-term interest rates have continued to inch forward and bond yields have moved moderately higher. However, investors remain optimistic, looking beyond recent concerns (the delta variant and supply chain and labor issues).

Tomorrow is National Dictionary Day! Whether spoken or written, the power of words is undeniable. And as your Investment Strategy Team, we choose ours wisely, as to not create confusion when communicating our views.

There was another “disappointing” gain in nonfarm payrolls in September (up 194,000, vs. a median forecast of +500,000), but it’s not as bad as it looks. Less hiring at the start of the school year resulted in a decline in (adjusted) education jobs.

While unlikely to occur, a default on U.S. debt would have serious impacts for global financial markets. Learn more.

As we sit atop our prosperous peak, admiring the views of the fastest economic growth since 1984, the best start to a bull market and the record-breaking quarter of earnings growth, it’s wise to remember that not too long ago we began our uphill journey from the depths of the COVID-19 ravine. Often, the best views come after the hardest climbs.

Chief Economist Scott Brown discusses the latest market data.

Following the strong performance in the first half of the year, economic growth was bound to moderate in the second half. Growth is still expected to be strong by historical standards. Yet, it may be disappointing for some investors.

Review the latest Weekly Headings by CIO Larry Adam.

In a win (but not a complete victory) for “team transitory,” the Consumer Price Index rose less than expected in August (+0.3%, up just 0.1% excluding food and energy). Areas that were running hot a few months ago (used cars, vehicle rentals, car insurance, airfares) retreated.

In addition to football, this fall will be eventful for our team of monetary policymakers at the Federal Reserve. Quarterbacked by Chairman Powell, the Fed will draft its route to easing its accommodative stance now that the economic recovery has put some points on the scoreboard.

Chief Economist Scott Brown discusses the latest market data.

As of the end of August, the index's year-to-date gains exceed 20%.

Chief Economist Scott Brown discusses the latest market data.

Review the latest Weekly Headings by CIO Larry Adam.

“We have production bottlenecks and supply shortages in every economic recovery,” says Raymond James Chief Economist Scott Brown, but those issues – and inflation – are expected to ease with time.

“We have production bottlenecks and supply shortages in every economic recovery,” says Raymond James Chief Economist Scott Brown, but those issues – and inflation – are expected to ease with time.

From school bells to the bells of New York Stock Exchange—the ringing of bells often signifies the beginning and/or conclusion of an event.

Optimism around GDP growth, employment and earnings has, for now, outweighed worries related to COVID-19 variants.

Chief Economist Scott Brown discusses current economic conditions.

Chief Economist Scott Brown discusses the latest market data.

Review the latest Weekly Headings by CIO Larry Adam.

Raymond James Chief Investment Officer Larry Adam examines the current investing environment through the lens of classic games.

Chief Economist Scott Brown discusses the latest market data.

Review the latest Weekly Headings by CIO Larry Adam.

Chief Economist Scott Brown discusses current economic conditions.

Chief Economist Scott Brown discusses current economic conditions.

Chief Economist Scott Brown discusses the latest market data.

Review the latest Weekly Headings by CIO Larry Adam.

Chief Economist Scott Brown discusses current economic conditions.

Chief Economist Scott Brown discusses current economic conditions.

Review the latest Weekly Headings by CIO Larry Adam.

The CPI rose more than expected in April, adding to inflation worries.

The markets continue their upward trend, supported by accommodative fiscal policy from the Federal Reserve, strong gross domestic product (GDP) numbers and solid earnings reports.

Chief Economist Scott Brown discusses the latest market data.

Today marks 100 days since President Biden was sworn into office, a time often referred to as the ‘honeymoon period’ for a new president’s tenure.

Review the latest Weekly Headings by CIO Larry Adam.

Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio & Technical Strategy.

Chief Economist Scott Brown discusses current economic conditions.

On Monday, the Treasury Department is expected to report a March budget deficit of about $658 billion, bringing the 12-month total to nearly $4.1 trillion, about 19% of GDP. Proponents argue that the added spending, with more to come, will help to ensure the recovery.

As a backdrop, we’ll bring a bit of scientific language to our analysis this quarter as we celebrate the amazing feats of our scientific brothers and sisters.

As the pandemic recedes and the economy reopens, we can expect strong job growth in the months ahead.

Economic data rarely follow a smooth path. Weather and external events have effects.

As expected, the Federal Open Market Committee left short-term interest rates unchanged and did not alter its monthly pace of asset purchases.

What sustained low interest rates could mean for the economy and your wallet.

Chief Economist Scott Brown discusses the latest market data.

In an online discussion, Fed Chair Powell repeated that the central bank is a long way from achieving its inflation and employment goals (implying no change in short-term rates or the money pace of asset purchases anytime soon).

Long-term interest rates have continued to rise. While part of the increase has been fed by inflation fears, those concerns are overdone.

Though rising yields may be indicative of an economic recovery, market volatility and inflationary fear could produce future hurdles.

Despite the recent weakness in equities, Raymond James CIO Larry Adam expects positive stock growth over the next 12 months.

The details of the January Producer Price Index showed a further surge in prices of raw materials. Breakeven inflation rates (the yield spread between inflation-adjusted Treasuries and fixed-rate Treasuries) have continued to move higher.

For a variety of reasons, many investors are worried about higher inflation. While we may see reflation (a pickup in prices that were restrained due to the pandemic), a significant increase in underlying inflation appears unlikely.

• Rescue package isn’t the one & only deal expected
• Still smitten with emerging market equities
• The health care sector still has our heart

The U.S. economy lost 2.77 million jobs in the initial estimate for January, which is on par with what we saw a year ago (-2.79 million). Seasonally adjusted, this was recorded as a 49,000 gain (with private-sector payrolls up just 6,000).

With the previous week’s short-squeeze headlines behind us, investors remained optimistic about a fiscal support package, which passed the Senate by a vote of 51-50, with Vice President Harris breaking the tie.

February begins with a stack of important economic scorecards. Among them are the last of the fourth-quarter corporate earnings reports, last week’s assessment of the 2020 gross domestic product (GDP), unemployment figures, consumer spending, as well as all the other regular reports that give us a snapshot of our recent economic history.

Real GDP rose at a 4.0% annual rate in the advance estimate for 4Q20, a much more moderate pace of recovery than was seen in the third quarter. Details were mixed, but consumer spending showed a significant loss of momentum and monthly figures reflected weakness in November and December.

As expected, the new administration has hit the ground running. In his first two days in office, President Biden issued executive orders which rescinded a number of previous directives or were aimed at ending the pandemic and easing the pandemic’s economic impact.

Judging by recent phone calls and email queries, inflation is a serious concern among investors this year.

For stock market participants, weak economic data has often been taken as a positive, since that implies more fiscal stimulus. However, investors have grown more concerned about possible stumbling blocks. Democratic majorities in the House and Senate are very narrow, some lawmakers are worried about running up the debt, and the window for bipartisan agreement may be short.

What can investors expect this year? Positive (but unsteady) economic growth, a powerful boost in earnings and continued success for information technology stocks, says Raymond James Chief Investment Officer Larry Adam.

The December Employment Report reflected an impact from the pandemic surge and further job losses in state and local government, but wasn’t bad otherwise.

Raymond James Chief Economist Dr. Scott Brown reflects on the trials and tribulations of 2020 and discusses his outlook for the new year.

The holiday shopping season is critical for most retailers. For some, the season is make or break for the whole year. The November retail sales report was weaker than expected, although amplified by the seasonal adjustment. No surprise, consumers are increasingly shopping online.

As the end of 2020 draws near, many of us are anxious to put this tumultuous year behind us, choosing to look ahead to 2021 in hopes that happier, healthier, and more prosperous times will be had by all.

The news on vaccines has boosted optimism for the economy for 2021. In contrast, near-term developments have been unfavorable. COVID-19 cases have surged and in all likelihood will rise further in upcoming weeks.

With apps designed for entertainment, travel, business, fitness, productivity, and more, the slogan ‘there’s an app for that’ sure seems to be true. But just as our daily lives are engrained in technology, the equity market’s performance has been reliant upon technology too.

The November Employment Reports was a bit disappointing. Nonfarm payrolls rose by 245,000 (vs. a median forecast of 485,000). The increase was held back by the loss of 93,000 temporary census workers.

Chief Economist Scott Brown discusses current economic conditions.

The Dow, NASDAQ and S&P 500 are now all in positive territory for the year.

Whether you’re celebrating in-person or virtually, we’re wishing you and your family a Happy Thanksgiving! Giving thanks may seem difficult to do in a year that’s resulted in the loss of so many lives, jobs, and businesses, but we believe this holiday is the perfect time to reflect on all we are grateful for.

Election results (a divided Washington) and good news on a potential vaccine boosted share prices, although there were some concerns about surging COVID-19 cases (163,402 reported on November 12) and possible difficulties in distributing the vaccine.

With a likely split-Congress outcome lowering the chances of substantial policy shifts, investors are refocusing on supportive fundamentals and the recovering economy. Raymond James CIO Larry Adam offers his perspective.

Recent data reports have been consistent with a further rebound in economic activity, but we still have a long way to get back to where we were before the pandemic and the pace of improvement has moderated.

The market through October continued to make the case for a steady approach to investing, especially as this is a historically volatile time – the months surrounding a U.S. presidential election – amid a historic, complicated year.

Your voice, your vote! With only four days remaining until Election Day, more than 84 million voters have already voiced their choice—over 61% of the total turnout of the 2016 election.

The S&P 500 posted its worst daily decline since late September but didn’t entirely erode October gains.

It’s the final countdown! Between the flared debate tensions and President Trump testing positive for COVID-19 on the campaign trail, the 2020 presidential election has arguably been one of the most contested and unique battles for the presidency in history.

There are a number of uncertainties heading into the November 4 election and many more as we look ahead into 2021. There’s a long held belief that the stock market abhors uncertainty. There’s also an old adage that says the market often climbs a wall of worry.

Key Takeaways

• Not all industries ‘reaping the benefits’ of the recovery
• 3Q20 earnings season may ‘plant the seeds’ for 2021
• ‘Don’t bet the farm’ on yields moving substantially higher

By now, it should be clear that COVID-19 is not going to go away anytime soon. Consumers and businesses are getting used to living and working under the pandemic and some changes, such as the tendency to work from home, will likely be long-lasting. The economy is always evolving. However, rapid changes can be destabilizing. There will be a number of challenges in the new year.

The initial efforts by policy makers positioned the economy for a robust rebound off the depressed levels, but there are still many moving pieces in order for the economy to return to pre-COVID levels.

Job losses in the early stages of the pandemic were more concentrated among low-wage workers. About half of those jobs have come back. For high-wage workers, who have been more able to work from home, job losses were less severe and have rebounded much better.

Key Takeaways

• Voters may focus on COVID-19 concerns instead of economic
• Digital platforms may be used to capture new voters
• Congress may be closer to a stimulus compromise

Nonfarm payrolls continued to recover in September, although the pace of improvement has slowed and we are unlikely to return to February levels until the pandemic is well behind us. The impact of COVID-19 has been uneven, with job losses remaining more severe in lower-paying service industries. Consumer spending has improved, though mixed across sectors. Further fiscal support will be critical for the unemployed.

Many factors feed into the relative strength or weakness of the U.S. economy, but the president traditionally receives the credit or blame. Fiscal policy – taxes and gov­ernment spending – have an important role in economic activity, and confidence can drive consumer spending and business investment decisions.

The fastest, most economically destructive recession is now in investors’ rearview mirrors. CIO Larry Adam shares his perspective on the unfolding recovery.

Despite a September slump, the S&P 500 and NASDAQ wrapped up the third quarter with gains of 8.47% and 11%, respectively.

The first of three presidential debates is set for the evening of September 29. The topics, chosen by the Chris Wallace, the moderator, will be the Trump and Biden records, the Supreme Court, COVID-19, the economy, racial tensions, and election integrity.

Today is National Family Health and Fitness Day! The COVID-19 outbreak undoubtedly brought our health and the health of our loved ones to the forefront of our minds, and with many states closing fitness centers in the initial stages of the lockdowns, the virus certainly challenged our traditional methods for exercise too.

The death of Supreme Court Justice Ruth Bader Ginsburg ignited a fight over her replacement. The increased animosity in Washington lowered the odds that lawmakers will reach agreement on a further fiscal support package and dampened investor sentiment.

The Dow Jones Industrial dipped almost 3% on Monday, and the S&P 500 slid more than 2% from the previous week, off about 7% from its recent highs earlier this month.

There were no significant surprises following the September 15-16 Federal Open Market Committee meeting. As expected, short-term interest rates were left unchanged and the FOMC did not alter its asset purchase plans.

The start of this year was calm with the economic expansion reaching a record duration, unemployment at record lows, and earnings growth set to reach all-time highs. However, a ‘Black Swan’ event—COVID-19—erupted, driving market and economic volatility to unprecedented levels.

The major stock market indices were choppy on a day-to-day basis, as investors continued to reevaluate the rally off the lows. The economic data reports were inconsequential.

Review the latest Weekly Headings by CIO Larry Adam.

Chief Economist Scott Brown discusses current economic conditions.

Private–sector payrolls rose by 1.027 million in the initial estimate for August. Normally, such a gain would be considered outstanding. However, in this recovery, that comes as a disappointment.

Led by technology and large-cap companies, the S&P 500 is on pace to post its best summer performance in over 80 years.

Key Takeaways

• Worst quarter of growth may be followed by the best
• More records in store for the equity market
• Highs and lows for oil while gold soars on uncertainty

The Fed updated its monetary policy framework, moving to a flexible average inflation target. That means that the central bank will target an average inflation rate of 2% (as measured by the PCE Price Index) over time.

While a panoramic view of broader economic and market developments will always be a crucial shot when constructing our outlook, sometimes it is important for us to bring certain sectors into focus.

In the minutes of the July 28-29 FOMC meeting, participants expected no change in policy rates anytime soon, but officials saw a need for more clarity regarding the likely path, such as adopting output-based forward guidance.

Initial claims for unemployment benefits fell below one million for the first time since mid-March (20 weeks). However, unadjusted claims had already dipped below that level a week earlier. Unadjusted claims totaled 831,000.

The overall economic outlook depends on the virus, efforts to contain it, and the degree of fiscal support. We’ve had a sharp- but-partial rebound in May and June, following a steep decline in March and April. The pace of improvement is expected to moderate. The impact of the pandemic has not been felt evenly.

This upcoming Wednesday is National Aviation Day, a holiday established by President Franklin Delano Roosevelt in order to honor the birthday of Orville Wright—inventor of the first airplane. While it’s hard to believe we’ve had the ability to fly for more than 115 years, it is even harder to comprehend the havoc that the COVID-19 pandemic has wreaked on the airline industry.

Nonfarm payrolls rose about as expected in the initial estimate for July, even as economists’ forecasts were widespread and risks to their job outlooks were generally seen to the downside. The unemployment rate fell a bit more than anticipated, but labor force participation stalled.

The pandemic has undoubtedly brought about a number of challenges for investors, but constructing a well-founded economic outlook and identifying opportunities in the midst of this unprecedented time are “always on my mind.” Until we can announce that COVID-19 ‘has left the building,’ our team will strive to do exactly that.

The U.S. economy contracted 9.5% through the second quarter, the worst single-quarter decline in gross domestic product (GDP) since the Commerce Department started tracking it in 1947. It was expected the report would show a dip, but it’s important to recognize what that dip represents.

Real GDP was reported to have fallen at a 32.9% annual rate in 2Q20. Nobody should have been surprised by that. Component data had already indicated massive and broad-based weakness and most economists’ estimates fell in the -30% to -35% range. News reports had generally implied that the downturn was ongoing. That’s clearly not that case...

Between the biggest week of earnings, the Fed meeting, and key economic data, there were plenty of headlines ‘hot off the press’ for the financial markets to handle this week, and as we look ahead, some of these same developments, as well as a few others still have the potential to ‘turn up the heat’ on market volatility.

The Federal Open Market Committee (FOMC) is expected to leave monetary policy unchanged. Officials won’t release revised economic projections until the mid-September FOMC meeting, but Chair Powell will provide an assessment of current economic conditions in his post-meeting press conference.

• Hopes policymaker action will ‘expedite’ the recovery
• Investors view earnings beats as a ‘special delivery’
• Not all states successful in ‘handling’ COVID-19

We distance ourselves from the chaos and panic of the crowd during pullbacks and from the ‘amusement’ and euphoria of rebounds and instead focus on providing a steady, reliable outlook that remains focused on risks on the horizon.

The pandemic had a significant impact on household spending in March and April, with a sharp contraction in consumer services (basically anything where people come into close contact with each other). The relaxation of social distancing guidelines has contributed to a sharp-but-partial rebound in May and June.

The economic calendar was thin. Investors remained concerned about rising cases of COVID-19. A return to a full lockdown appears unlikely, but the pace of improvement in the economy is expected to slow.

The U.S. Treasury is expected to announce a June budget shortfall of about $863 billion, bringing the 12-month total to nearly $3 trillion (or about 14% of pre-pandemic GDP). The red ink will continue. Lawmakers are expected to approve another round of federal stimulus later this month. None of that is worth losing sleep over.

The June job market report and other indicators remained consistent with an unprecedented steep drop in economic activity in March and April, followed by a sharp-but-partial rebound in May and June. Many of these data were collected before the recent surge in COVID-19 cases.

It’s all about the pandemic. Rising cases in a number of states fueled fears of a second wave of infections and a more protracted economic recovery.

As states ease their COVID-19 lockdown measures, rising case numbers have put pressure on equity markets.

The initial economic rebound seen in recent weeks won’t bring us back to pre-pandemic levels, explains Chief Economist Scott Brown. “A full recovery will take time.”

Efforts to contain the coronavirus have had a major impact on the global economy. There is still a lot of uncertainty in the outlook, which has three elements. First, there was a sharp decline U.S. Gross Domestic Product in 2Q20. Second, there was a sharp-but-partial rebound off the lows in May. Third, improvement after the initial rebound will slow, barring a vaccine or effective treatment for COVID-19...