International stocks lag, but what else is new?

If you are tired of waiting for the international stocks in your portfolio to pull their weight, your frustration is more than justified. Compared to U.S. stocks, international equities have never lagged this much, this consistently, for this long.

Improved forecast feels good, means little

As stocks continue their summertime cruise with recession fears fading in the rearview mirror, it has become Wall Street chic to improve economic forecasts and year-end stock market targets.

Markets Still Ignoring Inverted Yield Curve

If you consider yourself an educated investor, there are two things you may already know about an inverted yield curve. First, it describes a period in which short-term bonds offer higher interest rates than longer-term bonds. Second, it has historically been a reliable indicator of a coming economic recession.

Narrow rally hardly bearish

It’s a poorly kept secret that the stock market’s year-to-date gains, as attractive as they may be, are due to an especially small number of companies. Through the first half of June, more than 90% of the S&P 500’s return has come from just seven stocks (Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla, and Meta).

Fed hikes are (probably) done. Now what?

It’s not official yet, but it sure seems likely that Jerome Powell and the Federal Reserve have reached the end of their rate-hiking cycle.

Stock rally raises the bar for earnings

Stocks offered cold comfort to investors last year, but equity markets have begun to thaw as inflation pressures slowly subside and the Fed inches closer to the end of its rate-hiking cycle.

Rising rates, bank failures weigh on investors’ psyche

Psychology can have a much greater influence on financial markets than one might expect.

Despite Fed’s best punch, U.S. economy still standing

The U.S. Federal Reserve has come a long way since its chairman, Jerome Powell, dismissed inflation as “transitory” nearly three years ago. To their credit, Powell and the Fed governors eventually confronted that massive miscalculation and have spent the last 12 months aggressively raising interest rates in their battle against inflation.

Value stocks still valuable after strong year

It was a long time coming for value stocks. The Russell 1000 Value index fell 10% in 2022 compared to a 19.4% drop for the S&P 500 and a 30% loss for the Russell 1000 Growth index. Yes, it was still a “down year” for value stocks, but it was also a banner year in relative terms. A peek at the updated Periodic Table of Investment Returns (also known as the Callan chart) reveals U.S. Large-Cap Value as the best performing equity category last year (trailing only commodities, cash, and gold). U.S. Large-Cap Growth, on the other hand, finished dead last among equities.

Believe it or not, inflation has a bright side

None of us need to be reminded of high inflation or the laundry list of challenges that come with it. While the latest Consumer Price Index (CPI) has fallen to 7.1%, the cost-of-living for Americans is still increasing at the fastest pace since the early 1980s. Inflation and high interest rates are undoubtedly real problems, but they do have some silver linings.