Charles Schwab

Fed Holds Steady, Keeps Door Open to Future Moves

After cutting rates at the past three meetings, it looks like the Federal Reserve has reached a plateau.
Are Preferred Securities Still Attractive?

The higher yields they currently offer can be a benefit for income-oriented investors, but those yields reflect the additional risks they face.
Q4 Tech Earnings: Will CapEx Take Bite of Profits?

Guidance and spending will be important to watch as analysts have their eyes on annual revenue growth, especially after news of DeepSeek shocked U.S. markets.
Tariffs: Bark Worse Than Bite?

Markets responded positively during Trump's first week in office, despite threats of tariffs on the three largest trading partners of the U.S. Are trade risks being dismissed?
Hard to Handle: A Look at Hard vs. Soft Data

Some soft data metrics have started to rebound sharply and catch back up to relatively resilient hard data, but it's too soon to say whether the gap is definitively closing.
Are California Fires a Risk to the Muni Market?

The wildfires may affect some municipal bond issuers in the devastated areas, but the impact to other California bonds or to the broader muni market is likely limited.
Schwab Market Perspective: Markets vs. Economy

Strong U.S. economic data has spurred a strong rise in Treasury yields but a tepid response in the stock market. Uncertainty likely will continue in coming months.
New Congress Faces Massive Policy Agenda

Donald Trump and Republicans support sweeping changes that could affect the economy, markets and investors. But narrow margins in Congress could complicate that agenda.
What's Ahead for China in 2025?

Economic data and policies out of China are typically delayed until mid-March. Stock volatility may be prevalent until initiatives are clarified after the Lunar New Year.
Treasury Bonds: Riding the Range

Yields may trade in a wide range as markets work through issues in the new year. Navigating volatility may mean capturing higher nominal and real yields over the longer term.
It Was a Very Good Year

Stocks are coming off another banner year, but strength has bred a frothy sentiment environment, which continues to loom as a risk for likely coming volatility.
Schwab's 2025 Long-Term Capital Market Expectations

Continuing last year's trend, our 2025 outlook shows fixed income benefiting from high rates, while equities face a narrowing edge over risk-free investments.
Stocks Rise in Shortened Session

Today often kicks off the Santa Claus rally. Stocks rose and volatility is down sharply from recent peaks, but yields keep rising, which has hurt the non-tech part of the market.
Top Five Surprises for 2025

Surprises most often are hiding in plain sight. Being aware and prepared with a plan for the unexpected are keys to achieving goals.
Schwab Market Perspective: 2025 Outlook

We expect gears to shift as potential policy changes under the Trump administration add to uncertainty about inflation and the global economy.
Sector Views: Monthly Stock Sector Outlook

Our outlook on the 11 S&P 500 equity sectors.
2025 U.S. Stocks and Economy Outlook

The U.S. economy and stock market are entering 2025 from a position of strength, but risks of volatility—especially pertaining to policy—are much higher compared to last year.
2025 Corporate Bond Outlook

Strong 2024 performance may be tough to replicate given tight credit spreads, but we still have a favorable view on corporate bond investments given the strong economy.
2025 Municipal Bond Outlook

We believe municipal bonds currently offer a compelling balance of risk and reward for investors in higher tax brackets.
2025 Treasury Bonds and Fixed Income Outlook

The bond market is caught between the Federal Reserve's plans to cut interest rates and the risk of higher inflation and federal debt levels.
2025 Global Outlook: Clearing the Hurdles

International markets are expected to clear the hurdles of uncertain trade policy, tighter fiscal policy and slower than average economic growth to support solid overall returns.
Choosing Municipal Bonds: GO or Revenue?

You're interested in investing in municipal bonds, but which type—general obligation or revenue—is best for you? We break it down.
Breadth of Life: Post-Election Market Trends

Some post-election stock market excitement has receded, but the story of strong breadth—which predated the election—has not changed and continues to support the market for now.
TIPS and Inflation: What to Know Now

Treasury inflation-protected securities can help buffer a portfolio against inflation. However, it's important to understand their unique characteristics and complex nature.
Five Investing Impacts of a Trade War

Market reactions to a potential trade war may be less extreme than anticipated by investors, although volatility is likely during trade negotiations.
Is the Next Temperamental Era Upon Us?

The period from the 1960s to the 1990s defined by record-setting inflation and big swings in GDP bears a striking resemblance to the current environment.
Optimism Improves Ahead of Q3 Retail Earnings

Recent data, early results, and a relatively firm economy point toward possible improvement in Q3 retail earnings as Walmart, Target, and other big-box stores prepare to report.
Trump Wins: Implications for Key Policy Issues

Republicans won the White House and Senate in the 2024 U.S. election, while vote counting continues for the House of Representatives. Here's a look at the policies that could affect markets.
Fed Cuts With a "Wait and See" Attitude

The Fed cut rates by 0.25%, with limited changes to the statement, while Powell's blunt "no" response about any coming political pressure to resign was headline grabbing.
Opening Market Update: Stocks, Yields Mildly Up in Waiting Game for Vote

Stocks and yields made slight early gains but attention is mainly on today's U.S. election. ISM Services data and a 10-year note auction lie ahead, and bond volatility is high.
What Is the Treasury Yield Curve?

The Treasury yield curve is an important economic indicator that, depending on its shape, can signal changes in market expectations and provide economic insight.
When to Consider Munis From Outside Your Home State

Although investing in in-state municipal bonds may have tax advantages, there can be good reasons to buy out-of-state munis.
You've Got to Earn It: Update on Earnings Season

Earnings season is shaping up to be relatively strong so far, but the market will likely continue to shift focus to an increasingly murky sales picture.
Q3 Tech Sector Earnings: Slower Growth Scrutinized

The tech sector approaches third-quarter earnings season in unusual territory, with investors worried about a slowdown in earnings growth over the last year. Margins loom large.
Pivot to Fiscal Policy

Tighter fiscal policy in Europe and China may hinder the economic response to easing monetary policy, with a resulting shift in investors' focus.
U.S. Agency Bonds: What You Should Know

Agency bonds issued by government-sponsored enterprises can offer slightly higher yields than U.S. Treasury bonds, without requiring bondholders to take on too much additional risk.
Volatility: What to Do During Turbulence

Turbulent market conditions can make anyone nervous. Here's what investors should know about dealing with them.
Is the Two-Year-Old Bull Market 2 Legit 2 Quit?

This unique bull market is still young relative to history and, for now, supported by relatively healthy breadth and broadening participation.
Schwab Market Perspective: After the Landing

Has the Federal Reserve achieved an economic "soft landing"? A resilient U.S. economy suggests it may have.
What Will Fed Rate Cuts Mean for the U.S. Dollar?

How will the U.S. dollar respond to Federal Reserve rate cuts? The factors that have supported a strong dollar for years remain largely intact.
7 Reasons to Consider Municipal Bonds Now

We believe municipal bonds currently offer a compelling balance of risk and reward for investors in higher tax brackets.
Party in the USA: Election Facts

Historically, staying invested has been, in our view, an effective strategy and one to consider when it comes to election years and beyond.
2024 Elections: Big Bark, Little Bite

Policy, more likely to be dictated by economic circumstances, may not resemble generous populist proposals, which could limit their impact on stock markets.
Sector Views: Monthly Stock Sector Outlook

Schwab Sector Views is our six- to 12-month outlook for stock sectors, which represent broad sectors of the economy. The Schwab Center for Financial Research (SCFR) combines a factor-based approach with a market and economic assessment to determine the ratings. For the basics on sectors, please see Stock Sectors: What Are They? How Are They Used?
How to Build a Bond Portfolio

From "how" to "why now," here are four things investors should understand about bond investing.
Federal Reserve Cuts Rates by a Half-Point

Policymakers indicated that more interest rate cuts were likely in coming months.
Panic Is Not a Strategy—Nor Is Greed

Panic is never a good investment strategy—nor is greed. Here's how disciplined investing helps navigate through volatile environments.
Schwab Market Perspective: Fed Watch

The Federal Reserve is widely expected to begin cutting interest rates at its September meeting. Market performance may depend on whether the pace of cuts is fast or slow.
CD or Treasury? Five Factors to Consider

Certificates of deposit (CDs) and Treasuries both can offer steady, predictable investment income—but how to decide between them? Here are five factors to help you choose.
Bull vs. Bear: Understanding Market Phases

How are bull and bear markets defined and how should you approach them as an investor?
Federal Reserve: On the Road Again

While the pace of Federal Reserve cuts is in question, all roads lead to lower interest rates.
Rate Cuts Support a Brighter 2025

Given the backdrop of monetary policy stimulus, the global economy is poised for growth and international stocks for continued leadership.
High-Yield Bonds: Are They Attractive Now?

High-yield bonds have been one of the best-performing bond investments so far this year, but there may be better entry points down the road.
Five Reasons Munis May Offer Shelter in Recession

Although we think it's too early to declare the economy is in a recession, risk is elevated. For investors who are concerned about a recession, municipal bonds may help buffer a portfolio.
Songs of Experience: Reminiscences of a Strategist

It's been 38 years since I began my career on Wall Street and the lessons I learned along the way from some all-time investment greats always hold true.
What Past Fed Rate Cycles Can Tell Us

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

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

Bond prices whipsawed over the past month as volatility spiked across markets. What's next for fixed income markets?
Inflation Remains Focus of Q2 Retail Earnings

Common wisdom is that consumers are pulling back on spending, but some green shoots are sprouting that might break ground as big retailers prepare to report second-quarter results.
Carry Trade Unwind: Is It Really Over?

Having been warned about the risk, investors now ask if the yen carry trade unwind is complete. Here's how far it might still go.
What Declining Interest Rates Could Mean for You

When the Federal Reserve lowers its key short-term interest rate, the impact isn't uniform across the financial universe.
What's in the Fed's Toolbox?

What the Fed's monetary-policy tools signal about the market.
The Next Episode for Jobs, Inflation, and the Fed

The softening trends in both inflation and labor data are sending a message that monetary policy is too restrictive.
Fed Holds Rates Steady But Hints at Upcoming Cut

The Federal Reserve kept its policy rate unchanged at the July meeting, but left the door open to rate cuts later this year.
Brea(d)th of Life: Market Leadership Shifts

While it's too early to declare small caps' recent outperformance as a meaningful trend shift, we continue to think high-quality companies and industries will likely perform well.
Why to Consider Mortgage-Backed Securities Now

Relatively high yields mean investors who have been focusing on short-term securities wouldn't need to sacrifice much yield if they chose MBS to help limit their reinvestment risk.
AI Remains Focus of Second-Quarter Tech Earnings

As Microsoft, Meta Platforms, chipmakers, and others prepare to report earnings, the AI-driven cloud and chip industries may continue to dominate the technology storyline.
Q2 Surprises and What Could Surprise in Q3

Discover what surprised markets in the second quarter of 2024 and understand the potential drivers of volatility for the third quarter.
Schwab Market Perspective: Connecting the Pieces

Softening inflation supports the potential for a Federal Reserve interest rate cut in coming months, but there are complexities below the surface.
Weaker Q2 Estimates May Dampen Mood on Banks

Net interest income helped big banks, which begin reporting second-quarter earnings July 12, but there's concern about how long it can keep going.
2024 Mid-Year Outlook: Municipal Bonds

Although the market is off to a rough start to the year, we think it should recover.
Beyond Nvidia: How the AI Picture Could Evolve for Investors

Almost every industry could ultimately incorporate AI, leaving a puzzle for investors seeking exposure. Using the internet as an example may provide some breadcrumbs.
Just a Job to Do: Assessing the Labor Market

The labor market continues to normalize and soften, but we think any further weakening might push the Fed to cut rates before the 2% inflation target is reached.
How Much "Tech" Do You Own?

Owning only the U.S. stock market likely means being overweight Tech. But Tech stocks don't always outperform. Investors may want to look outside the U.S. to be diversified.
5 Tips for Weathering a Recession

How to help position your portfolio in anticipation of an economic downturn.
Sector Views: Monthly Stock Sector Outlook

Schwab Sector Views is our six- to 12-month outlook for stock sectors, which represent broad sectors of the economy. The Schwab Center for Financial Research (SCFR) combines a factor-based approach with a market and economic assessment to determine the ratings.
How Do Treasury Auctions Work?

U.S. Treasury auctions are of interest lately due to growing U.S. debt and high interest rates. What are Treasury auctions, how do they work, and what should investors know?
Hard to Concentrate: Top-Heavy Market

This year's tale of two markets has underscored resilience at the index level but considerable weakness at the individual member level, leading to massive performance divergences.
2024 Mid-Year Outlook: Corporate Bonds

Investment-grade corporate bonds remain attractive given their lower risk and relatively high yields. Long-term investors who can handle volatility might consider high-yield bonds and preferred securities, but we wouldn't suggest large positions in either.
Election Risk Returns

A top risk for investors, elections may see a shift from centrist to more populist policy that could slow exports, raise inflation, and increase volatility in the global markets.
The Fed Holds Rates Steady and Remains Patient

As expected, the Federal Reserve kept its policy rate unchanged at the June meeting, but left the door open to rate cuts later this year if inflation declines.
Mid-Year Outlook: U.S. Stocks and Economy

Certain segments of the economy and stock market have experienced much stronger recoveries this year, underscoring a severe bifurcation between the "haves" and "have nots."
Mid-Year Outlook: Fixed Income

Looking into the second half of the year, we are optimistic that returns will be stronger, but also expect volatility to remain elevated.
Deficits, Debt and Markets: Myths vs. Realities

Historically, the level of U.S. debt has had no correlation with the performance of the stock or bond markets.
2024 Mid-Year Outlook: Global Stocks and Economy

As the global economy builds on its recovery this year, markets may see increased volatility due to divergent central bank policies, geopolitics and election outcomes.
Buying a Muni Below Par? Reasons to Think Twice

Discounted municipal bonds could expose you to unexpected taxes. Here's what to know before you buy.
Why Fed Forecasting Tools Are Worth Watching

Predicting Fed rate changes may be an inexact exercise, but understanding how the tools that do track it work can help investors weather uncertain markets.
Ex-Factor: Housing Holds Some Economic Keys

The housing market looks to be on the road to recovery, but not without significant scarring for a considerable portion of potential homeowners.
Emerging Market Contrasts: China and India

The two largest emerging markets have taken very different paths, echoing the divergence in the economic and demographic landscape for these two countries.
Nvidia Results Ahead

Nvidia faces tough competition, law of large numbers as it prepares to report Wednesday.
Schwab Market Perspective: The Pace of Rate Cuts

Inflation data has continued to fuel uncertainty about when the Federal Reserve will begin to cut interest rates. It's a question with global implications.
The Recession Has Ended

Europe's mild recession is over, with growth expected to continue. Valuations for eurozone stocks remain attractive, offering the potential for further price appreciation.
The Fed Holds Rates Steady and Remains Patient

As expected, the Federal Reserve kept its policy rate unchanged at the May meeting, but left the door open to rate cuts later this year if inflation declines.
Life's Been Good...for Large Caps

First-quarter earnings results have been healthy thus far, but key to the ongoing rally will be companies' recovery in revenue growth and strengthening forward guidance.
Q1 Tech Earnings Preview

The AI-driven cloud and chip industries come into focus in the next month as Microsoft, Meta Platforms, and others prepare to report earnings.
Should You Consider High-Yield Municipal Bonds?

We believe high-yield munis carry additional risks, but are worth consideration by investors in higher tax brackets who are comfortable taking added risks.
Declaring Independence From the U.S.

Dollar strength resulting from central banks' independent policies on rate cuts is unlikely to be tampered by China's deflation or geopolitics.
Callable Bonds: Understanding How They Work

Reviewing the basics can keep you from being caught off guard if your investment is returned to you before the stated maturity date.
Family Affair: A Look at Sector Trends

While major indexes have seemingly been calm this year, there are notable and stealthy sector leadership shifts that have happened under the surface.
Schwab Market Perspective: Rolling Recovery?

There are signs that some previous "rolling recessions" are starting to turn into rolling recoveries.
Big Banks Prepare to Report Q1 Results

The first quarter was strong for major U.S. investment banks as the economy grew and M&A and IPO activity accelerated.
Earnings Season May Bring Changes

Earnings growth, a driver of long-term stock market performance, seems to be expanding beyond a handful of U.S. equities, supporting more broad-based market performance.
Emerging-Market Bonds: Are Returns Worth the Risk?

Emerging-market local-currency bonds have rallied sharply since last October, along with other risky segments of the global bond market. However, navigating the market can be challenging.
Preferred Securities: Still Attractive?

Our outlook is still positive, but it may be difficult to replicate the strong returns of the past few quarters.
What Could Turn China Around?

Changes in China's economic policy tend not be communicated prior to implementation. What can we expect from China's stock market in response to any shifts?
Potential Opportunities in the Muni Bond Market

There have been several big changes in the municipal bond market lately. Here's what you should know.
Fed Keeps Pace Slow on a Bumpy Road to Lower Rates

The Federal Reserve suggested that interest rates likely will move lower, but perhaps not as quickly as markets had been expecting.
Emotional Rescue: Markets, Fed Policy, and Elections

Between adjustments in Fed policy and a coming presidential election, it's going to be an emotional year, but historical data shows staying invested is the best course for investors.
Waiting for the Fed

The Federal Reserve weighs the data while investors wonder: When will rate cuts begin?
Schwab Market Perspective: Under the Surface

Sentiment data is beginning to match relatively strong "hard" economic data.
2024 Elections: What Are the Trade Risks?

Global elections may lean towards nationalist policies that could hinder trade in goods via tariffs, but also boost growth in domestic industries to counter inflationary effects.
Is India's Economy on the Rise?

India's prospects are bright, but the country faces significant headwinds. Here's what to know as an investor.
The Fed Hesitates and the Markets Wait

Although a strong economy has changed expectations about the timing and magnitude of interest rate cuts, we still see room for the Federal Reserve to cut by three-quarters of a point this year.
Beneath the Surface of Market Highs

Investor sentiment and stock market valuations are getting increasingly stretched as indexes trek higher, but solid underlying breadth has been a positive offset for now.
Japan's Long Comeback

The second-largest stock market has captured the interest of investors, supported by stronger, more broad-based earnings, and incentivized by Japan's fiscal and monetary policies.
Why to Consider Longer-Term Bonds Now

Short-term bond yields are high currently, but with the Federal Reserve poised to cut interest rates investors may want to consider longer-term bonds or bond funds.
Inflation: Too Hot?

Relatively hot inflation reports might be blips, but they reinforce why the Fed's rate-cutting cycle might be more gradual, which could be a better backdrop for stocks.
Confidence Catches Up

Sentiment data is beginning to match relatively strong "hard" economic data.
Simple Indicators in a Complicated World

Market folklore provides an easy, but inaccurate guide for investing in today's interconnected and complex market. Indicators based on economic or market behavior may be preferred.
Slow(er) Ride to Rate Cuts

While focus remains on when the Fed will start cutting rates, history suggests other factors must be looked at when assessing forward stock market performance.
Fed Drops Tightening Bias, but No Easing Signaled

As expected, the Fed held rates steady in January, but importantly downplayed the likelihood that rate cuts will start as soon as March.
Count Down to Rate Cuts (and Hikes)

Market expectations have established a high bar for central banks' rate cuts. Any disappointment like stronger inflation or economic growth could spark market volatility.
Municipal Bonds: The State of the States

Credit quality in the muni market likely has peaked, but we believe states' strong rainy-day funds and other attributes will lend stability in the near term.
Tesla Set to Report Q4 Results Late Wednesday

After 2023's price cuts and tougher competition, Tesla is set to report late Wednesday. Lower demand and a big, one-time jump in used EVs could drive a very different 2024.
Back in Black: S&P 500 Hits All-Time High

While the S&P 500's all-time high hasn't been accompanied by other parts of the market (notably, small caps), further gains are possible if breadth firms up.
Bank Loans: What Happens If the Fed Cuts Rates?

Bank loan income may decline if the Federal Reserve cuts interest rates. That doesn't mean investors should avoid them altogether, but it's important to understand the risks.
Tech Earnings Loom After Strong 2023

Tech sector stocks gained more than 50% last year, fueled by AI and signs of improvement in the cloud and chip markets. Upcoming Q4 results could give investors clues into 2024.
The Global Impact of Taiwan's Election

The election outcome is unlikely to change the status quo for the Taiwan Strait, U.S.-China relations, or global markets which have seemed to price in geopolitical risk.
Something for Everyone

Economic data has provided encouragement for both stock market bulls and bears.
Mixed Signals: December's Jobs Report

While headline payroll growth was relatively strong in December, weaker details under the surface continue to paint a mixed labor market picture.
Schwab's 2024 Long-Term Capital Market Expectations

Our current 10-year outlook highlights better opportunities for cash and bonds, primarily driven by higher starting yields, and a steady outlook for stocks.
4 Weak Spots in the Current Market

Today's uncertain economic climate is putting particular pressure on four market segments. Here's what to watch out for in the months ahead.
Top 5 Global Risks of 2024

There are many risks for 2024 including those that are an ever-present part of investing and not unique to the outlook for any particular year. We've highlighted our top five.
The Federal Reserve Pivots to Easing

The decision to hold the federal funds rate steady was in line with expectations, but the accompanying statement and projections indicate a shift toward easing in 2024.
Muni Outlook: Focus on the Big Picture

We see potential opportunity in municipal bonds in 2024, although there may be more volatility.
Fixed Income Outlook: The Rocky Road Bond Market

Although some volatility may continue, we believe interest rates have peaked. We expect lower Treasury yields and positive returns for investors in 2024.
2024 Global Outlook: The Big Picture

Our outlook for 2024 is for a gradual U-shaped recovery composed of seemingly chaotic movements in economic data with turning points in policy rates and earnings growth.
Lose Yourself in the Inflation Data

Inflation is a touchy subject, and given there are many ways to analyze it, investors should take note of the nuances that exist within the data.
Freedom + Control: Fueling The Independent RIA Movement

Over 10,000 advisors became RIAs between 2015 and 2020 alone. Ever wonder why?
Freedom, control, and economic advantages are the key reasons for the impressive growth of the independent Registered Investment Advisor (RIA) channel over the years.
As the numbers keep rising, so do the number of business models and technologies that help advisors build a practice exactly as they imagined. If that’s what you’re looking for, this white paper explains it all from a top-down view.
Inside the Exploring Independence white paper, you’ll learn:
- Important aspects of the model ranging from channel growth to the earning potential
- The many pathways to become an RIA
- Interesting perspectives from RIAs of all sizes
- How custodians support RIAs, from resources to support
- Why there has never been a better time to transition to independence
U.S. Outlook: One Thing Leads to Another

Economic pain is likely in 2024, but that doesn’t mean stocks will struggle all year, especially if there is a continuation of the rolling recessions that have hit the economy.
Is China Investable?

Reasons prompting concern around investing in China may be improving, but volatility is likely to remain characteristic of Chinese stocks in 2024.
4 Weak Spots in the Current Market

Today's uncertain economic climate is putting particular pressure on four market segments. Here's what to watch out for in the months ahead.
Bond Market: What Happened to "Higher for Longer"?

Treasury yields have dropped as weak economic data suggests the Federal Reserve may begin cutting the federal funds rate target earlier than previously expected.
Timing Matters: Understanding Sequence-of-Returns Risk

If you're close to retiring, beware of the little-known sequence-of-returns risk that could take a huge slice out of your retirement income.
Why is the RIA channel the fastest growing segment of the financial services industry?
The Registered Investment Advisor (RIA) model will be the growth story of the next decade. Its track record of success shows that independence could deliver long-term competitive advantages. According to Cerulli, other channels are expected to shed investment advisor market share in the coming years and the independent RIA model will become the benefactor. As this momentum continues to build, now is the perfect time to join the movement.
Bank of Japan: End of an Era?

Policy changes at the Bank of Japan could potentially reverse capital flows, shift global yields higher, contribute to a stronger yen, and increase the value of Japanese stocks.
High Bond Yields: Answers to 5 Top Questions

While bond prices are generally down, the income they provide is up, providing potential opportunities for fixed income investors.
Another Rate Hike Bites the Dust

With unanimity, the Fed opted to keep the fed funds rate unchanged but remains attentive to the idea that inflation risk should still be paid attention to.
Serious Business: Assessing Earnings Season

Earnings results thus far underscore the strong bifurcation within the market, which is confirmed by the continued deterioration in breadth throughout the current correction.
Why Go Long When Short-Term Bonds Yield More?

With the Federal Reserve poised to change direction, investors who have been investing in very short-term securities may soon face "reinvestment risk."
What Happened to ESG Stocks?

Investments in alternative energy have become unattractive due to higher interest rates, not changes in government policies, adoption or pricing of green technologies.
Schwab Market Perspective: Crosscurrents

While surface-level economic data appear resilient, details below the surface are mixed.
Debt: Hard to Handle

Interest expense is a large and growing issue for both the economy and stock market, which reinforces why investors should stay up in quality amid interest-rate-driven headwinds.
The Earnings Recession Could End Soon. Now What?

A run of shrinking quarterly profits may finally end soon, but it's probably not time to break out the champagne just yet.
Q3 Bond Market Meltdown: Why and What's Next?

As the Federal Reserve signals it will keep interest rates higher for longer, the market appears to be reflecting the uncertainty about the path of policy going forward.
CD or Treasury? Five Factors to Consider

Certificates of deposit (CDs) and Treasuries both can offer steady, predictable investment income—but how to decide between them? Here are five factors to help you choose.
Risk: Hikes May Be Over, But QT Goes On

Monetary tightening still continues in the form of quantitative tightening, bringing potential volatility, earnings pressures, and lackluster performance to stock markets.
Congress Scrambling to Avoid Government Shutdown

Historically, government shutdowns have not caused a major reaction in the markets. But shutdowns can increase market volatility, and an extended shutdown could have an impact on the overall economy.
Quarterly Market Outlook: A Delicate Balance

The Federal Reserve weighs the data while investors wonder: Is the rate-hike cycle over?
Fed Pauses but Projects One More Hike This Year

The September Federal Reserve meeting provided few surprises, but ongoing uncertainty about the Fed's next move may mean more volatility ahead.
Say Goodbye…to Great Moderation?

A return to the Great Moderation Era looks unlikely, which might lead to an increasingly volatile—and somewhat unfamiliar—inflationary, economic, and geopolitical landscape.
How Multi-Family Offices Meet the Needs of the Ultra-Affluent

It’s no secret: being an independent Registered Investment Advisor means having the freedom to always do what’s right for your clients. With ultra-affluent clients, extra special attention and resources are needed. Enter the Multi-Family and Single-Family Office. Through a broader suite of services and expertise, these firms help families oversee their entire financial lives while preserving their privacy, objectivity, and access to solutions. And there’s a growing need for more.
“In this industry, the more solutions you provide, the happier and more satisfied clients are, and the more willing they are to provide introductions to you.” Shannon Kennedy, Global President at BMO Family Office.
To see what it takes to build the Multi-Family or Single-Family Office you’re dreaming about, and what the future has in store, download this white paper with comprehensive perspectives, model breakdowns, and more.
Schwab Market Perspective: Tension

Competing narratives have emerged to describe the state of the U.S. economy.
Europe Sentiment: So Bad It's Good

Changes in sentiment may drive the performance of the Eurozone equity markets, even with disappointing economic data.
Treasury Yields: Where Do They Go From Here?

We expect yields to fall later this year and into 2024 as inflation continues to cool.
Piece of Work: Dissecting Labor Market Trends

The August jobs report confirms the labor market's continued slowdown, which is for now consistent with the Fed's soft-landing desires—but not without warning signs.
High-Yield Bonds: Yields Are Up, But Risks Remain

Although high-yield bonds have performed well so far this year, we continue to take a cautious view.
Understanding Market Cycles: Risks & Opportunities

Markets are prone to cyclical behavior, which presents risks and opportunities for investors. Here are some basics investors should know about market cycles, recessions, and recoveries.
Vertigo: Market Succumbs to Myriad Pressures

With the path of least resistance for stocks seemingly lower for now, key to watch will be a stabilization in interest rate volatility and clarity on the path of monetary policy.
4 Ways to Invest Internationally

Foreign stocks are again competitive with their domestic counterparts. Here are four ways to gain exposure.
Investing in Artificial Intelligence (AI)

As businesses worldwide adopt technology, the innovation of AI may result in market leadership changes, global economic growth, and investor opportunities.
Schwab Market Perspective: On the Line

Will the economy roll into a formal recession, or is a recovery underway? It's a close call.
Don't Let Me Down: An Earnings Season Update

Earnings season has thus far been a mixed bag, and despite a notable increase in the beat rate, the market is rightfully shifting focus to guidance for the rest of the year.
Your All-In-One Guide To Becoming An Independent RIA

Everyone’s journey to the independent Registered Investment Advisor (RIA) model is different. It’s about taking a series of small steps, knowing they could add up to something big. And if you’re unsure of where to start or just looking to learn more about what’s involved in the process, this interactive whitepaper could hold the answers. It’s a compilation of the knowledge and learnings from Schwab’s more than 35 years of working with thousands of financial advisors as they make the switch.
- In the whitepaper, you’ll learn and explore:
- 4 key steps for every transition and how to navigate them
- 5 unique advisory models for RIAs
- Why over 21 thousand1 financial advisors have transitioned to the RIA model in the past 14 years
- How Schwab has helped advisors move over 1.1 million2 client accounts totaling over $414 billion3 in AUM in total
- And a lot more
Should Muni Investors Take Note of California?

During the past decade, a turnaround in the Golden State has resulted in higher credit quality for many issuers.
Divergence: Rate Cuts, Pauses, and Hikes

Central bank policies are set to diverge from the steady hikes characterizing the first half of 2023, contributing to increased market volatility for the remainder of the year.
Fed Raises Rates, Leaves Door Open to More Hikes

In a unanimous decision, Federal Reserve policymakers raised the federal funds rate to 5.5%, the highest point since 2001.
Municipal vs. Corporate Bonds: How to Choose

There are multiple factors to consider, including your tax rate.
Get the Balance Right

The recent broadening out in market breadth has been accompanied by frothier investor sentiment, but using sentiment as a market-timing tool is tricky (if not impossible).
El Niño Could Bring Storms to the Markets

A high probability for an El Niño event in the second half of 2023 brings concerns of extreme weather, persistent inflation, supply chain disruptions, and market volatility.
Mixed Emotions About June Jobs Report

The recent collection of labor data has painted a mixed jobs picture, but underlying wage strength and still-strong payroll growth will likely keep the Fed in a hawkish position.
2023 Mid-Year Outlook: Municipal Bonds

Given attractive yields and strong credit conditions, we have a positive view on the municipal bond market for the second half of the year.
India: On the Rise?

India's growth initiatives and demographics may help its economy continue to advance; its stocks seem to have priced in high expectations for the world's fifth-largest economy.
Housing: Rolling in (and out of) the Deep

After falling into its own recession last year, the housing market has started to turn decisively higher; but a sustained recovery might not be the strongest elixir for the economy.
2023 Mid-Year Outlook: Corporate Bonds

We expect generally good performance during the second half of the year, although volatility may increase, especially for high-yield bonds.
Japan: Reclaiming Lost Decades

Japanese stocks may help boost the performance of international markets although the unique nature of Japan's economic and business structure could pose some risks.
Why Investors Should Worry Less About China's Recovery

Though recent data suggests China's re-opening growth has slowed, it's likely temporary. As China's recovery continues, it may have implications for U.S. inflation and rates.
Fed Holds but Projects More Hikes to Come

With unanimity, the Federal Open Market Committee held the federal funds rate in its current range, but updated projections suggest this rate-hike cycle is not yet over.
Serving the Ultra High Net Worth Client - Insights and Opportunities
Join VettaFi for a special webcast, Serving the Ultra High Net Worth Client - Insights and Opportunities, to hear stories from successful advisors serving the ultra-wealthy.
2023 Mid-Year Market Outlook: Out of the Woods?

Most of the things we expected to happen during the first half of the year in fact did: Inflation eased, U.S. economic growth slowed, the Federal Reserve appears to be near the end of its rate-hike cycle, and the U.S. government debt ceiling standoff was resolved before a potential default.
Schwab Market Perspective: Different Speeds

Sometimes it feels like the economy and markets are on different tracks.
Wealth Is More Than Money

The meaning of "wealth" goes far beyond having a lot of money. It's more about what money can do for you.
2023 Mid-Year Outlook: U.S. Stocks and Economy

A broadening out in market performance would help bolster a more sustainable stock rally, but that hinges on increasing clarity for monetary policy, recession risk, and bank stress.
Congress Clears Debt Deal, Averting Default

The measure ends weeks of negotiation and unease about a potentially catastrophic government default.
Total Concentration: Mega Caps Reign

The concentration of gains up the cap spectrum isn't itself a precursor to weakness; it's the lack of participation from the "average stock" that warrants some caution.
Debt Ceiling Standoff: What Investors Should Know

While we don't expect the U.S. government to default, the uncertainty may heighten market volatility in coming days. Here are answers to some of the questions we're hearing most often.
Debt Problem More Than Just a Ceiling

Although few nations have a debt ceiling similar to the U.S.', rising government debt levels are a widespread global risk that may lead to lower economic output and weaker growth.
U.S. Agency Bonds: What You Should Know

Bonds issued by government-sponsored enterprises can offer slightly higher yields than U.S. Treasuries, without requiring investors to take on too much additional risk.
Banking Stress and Preferred Securities: Now What?

Banks and financial institutions are big issuers of preferred securities, so the recent banking industry volatility has had an impact. Our guidance on preferreds is unchanged but with some caveats.
Nothing Typical for Stocks After Fed's Last Hike

Analysis shows an extraordinary range of outcomes since the S&P 500's inception in 1928.
Go Long, Go High: Bond Investing As Credit Tightens

As the credit market grows more stringent, investors should consider high-quality, longer-term bonds. Here are some fixed-income strategies.
Debt Ceiling Standoff

Political brinkmanship in Washington adds to concerns about the economy.
Federal Reserve: Pause or Peak?

The central bank likely won't have enough reason to hike rates again this cycle. In fact, we wouldn't be surprised to see one or two rate cuts later this year.
Shortages to Gluts: Labor Market

Shifts in the labor market due to monetary policy tightening would see lagged effects that may not aid central banks' efforts to materially affect core inflation by year's end.
Looking to the Futures: Equities Rise as Jobs Surprise to the Upside

Equities rise as jobs surprise the upside. The U.S. jobs market remains resilient as nonfarm payrolls beat expectations in April.
Pause? Fed Hikes, But Leaves Door Ajar for More

With unanimity, the Federal Open Market Committee raised the Fed funds rate by 25 basis points in May and signaled that further tightening will depend on various economic factors.
Debt Ceiling: House Bill Passes, Impasse Continues

Although the House narrowly approved a bill designed to jumpstart negotiations, the issue is far from resolved.
China: Strong Economy, Weak Stocks

China’s domestically driven economic growth has not yet translated to Emerging Market stock performance, which has tended to have been weighed down by international political tensions.
Will Banking Sector Issues Affect Corporate Bonds?

Corporate bond investors may be wondering if banking sector turmoil will affect financial institution bond issuers. Here's what to know now.
Schwab Market Perspective: Top of the Rate Cycle

What does a potential change in Federal Reserve policy mean for markets and the economy?
Revisiting Short-Duration Stocks

Although central banks may be near the end of the rate hike cycle, short-duration stocks may still be an attractive investment theme should interest rates remain at higher levels.
Markets Steady Ahead of Key Data

Trading might be muted today as the market pivots, awaiting earnings and inflation data this week.
Elevation: Largest Stocks to Market's Rescue?

In the face of banking stress and a hawkish Federal Reserve, stocks have advanced impressively so far this year, but narrow breadth doesn't bode well for continued strength.
Buying Interest Wanes as Natural Gas Prices Decline

Natural gas prices remain in their steep price decline as the prospects for a large gas surplus heading into the spring is keeping buying interest at bay.
Price Growth Slows, Stocks Gain

Stocks built on overnight gains and Treasury yields inched lower following today's relatively benign February PCE inflation data.
Proposed Bank Changes and Fed Comments

The Senate Banking Committee held a hearing to investigate the collapse of Signature Bank (SBNY) and Silicon Valley Bank (SIVB/SIVBQ) that brought to discussion possible changes for the entire banking system.
Natural Gas Woes Continue

As we discussed last week in Looking to the Futures, natural gas prices have been plagued by the perfect storm of lower demand and higher production throughout the withdrawal season.
Markets Again Under Pressure

Stocks fell and volatility rose this morning as banking sector worries persist.
Stocks Climb Ahead of Fed Meeting

U.S. stocks climbed for a second straight day Tuesday, with the tech-focused Nasdaq Composite ending near a five-week high, as jitters over bank instability eased.
Banking Sector Uncertainty Keeps Pressure on Stocks

U.S. equities are lower as pressure has returned to the banking sector, which remains top of mind.
Stocks Falling as European Banking Worries Flare Up

U.S. stocks are falling in pre-market trading as recent banking turmoil on this side of the pond made its way to Europe.
Stocks Remain Under Pressure as Banking Worries Remain

U.S. stocks are extending last week's sharp declines that have come amid worries regarding the ultimate impact on the banking sector of the recent collapses of SVB Financial and Silvergate Capital.
Stocks Trying to Battle Back From a Two-Day Rout

U.S. equities are modestly higher in pre-market action following the February labor report that was only modestly above estimates.
Stocks Chipping Away at Weekly Losses

U.S. stocks are higher, paring weekly losses though the markets remain choppy following this week's hawkish Congressional testimony from Fed Chairman Jerome Powell.
Caveat Emptor: Important Market Shifts Underway

Given the topsy-turvy nature of the market thus far in 2023, it remains crucial for investors to know what they are buying—especially as it relates to growth, value, and quality.
Stocks Muted as Choppiness Remains

U.S. stocks are subdued in pre-market action as the global markets remain choppy amid the backdrop of uncertainty regarding the ultimate impact of aggressive monetary policy tightening.
Stocks Higher After String of Losses

The S&P 500 is rising after falling the past four sessions as equites have shown some volatility amid festering uncertainty regarding the ultimate economic impact of aggressive global central bank tightening.
Market Perspective: Searching for Spring

Investors continue to seek signs of a change in season—and clues about how the Federal Reserve might react to it.
Have Corn Prices Found Support?

Corn futures traded higher to start the month with weekly USDA data showing an increase in exports week over week.
China Demands More Oil

Monday’s trading saw oil rise as traders digested China’s return in demand against a continued supply strain and slower growth in world economies.
Live Cattle Rallies on Inventory Report

The April Live Cattle futures, LCJ23, rallied as traders digested the United States Department of Agricultures (USDA) Cattle inventory report.
Stocks Adding to Friday's Rally, Flood of Earnings Data Looms

U.S. stocks are extending a late last-week rally, with Q4 earnings season set to shift into high gear.
Stocks Higher Heading into the Weekend

U.S. equities are higher, as the markets look to get back to their winning ways after a two-day losing streak.
Stocks Falling in Wake of Mixed Banking Results

U.S. equities are lower in pre-market trading with the Street digesting a slew of results from the banking sector to kick off Q4 earnings season.
Stocks Grappling With December Inflation Report

U.S. stocks are choppy as the markets wrestle with the implications of a highly anticipated December consumer price inflation report that showed the headline figure declined but the core rate rose, both in line with expectations.
Gold Rallies on a Weaker Dollar

Gold prices have increased to start 2023 as the dollar index extends last Friday's losses.
Bloomberg Commodity Index Trends Downward to Start the Year

The March contract for the Bloomberg Commodity Index (ERH23) was down for the third consecutive day on Thursday. Since ending 2022 at 112.80, the contract is down 5.03 at 107.77.
Looking to the Futures: Bonds Bounce After Bad Year

Bonds are bouncing into the new year after notching a record annual loss last year.
Stocks Higher to Pare Early-Year Losses

U.S. equities are solidly higher in afternoon action, paring some of the losses that have plagued the start of 2023.
Markets End Lower in the Final Trading Session of 2022

U.S. equities closed out 2022 in the red, and all three major indexes registered solid losses on a yearly basis. The stock market posted its worst yearly decline since 2008.
Crude Oil Slumps on Travel Concerns, Forecasted Production Increases

The February crude oil contract CLG23 was down over 2% in trading early Thursday.
Stocks Set to Rebound to Begin the Day

U.S. stocks are rising in pre-market trading, looking to rebound from yesterday's drop.
Lackluster Action in the Final Days of 2022

U.S. stocks continue to oscillate around the unchanged mark.
Stocks Higher Following Long Holiday Weekend

U.S. stocks are rising in pre-market action in the first trading session of the week following the long holiday weekend.
Top Global Risks of 2023

Considering that a new year almost always brings surprises of one form or another, we've highlighted our top five that may define the global markets in 2023.
When Will the Fed Brake?

Inflation trends are moving in a favorable direction, but the change is likely too slow for the Fed to take its foot off the brake anytime soon.
FOMC Slows Rate Hikes as Expected

The Federal Reserve raised interest rates by a half point (50 basis points) on Wednesday in line with forecasts.
Stocks Falling After Flood of Rate Hikes and Data

U.S. stocks are solidly lower as the markets continue to digest the economic implications of yesterday's 50-bp rate hike from the Fed.
Stocks Climbing Sharply Following Consumer Price Inflation Data

U.S. stocks are soaring in pre-market trading amid a softer-than-expected November consumer price inflation report.
Muni Outlook: Back in Vogue

For the first time in a long time, muni investors may be able to earn attractive yields without having to take undue risk.
Stocks Rose in a Quiet Trading Session

U.S. stocks ended higher in a quiet day, trimming some of the week's losses.
Pumped Up Oil Production

Oil dropped Tuesday on the release of the new Short-term Energy Outlook (STEO) released by the Energy Information Administration.
Recovery and Risk

Markets may continue to see volatility in 2023 as they navigate between global economic growth and inflation fears, with central banks' decreasing rate hikes and China's reopening.
Stocks Seeing Pressure Following Data

U.S. stocks are lower as the new week kicks off, even as China took further measures to ease COVID restrictions.
U.S. Outlook: How Many More Times, Fed?

Weaker economic trends will likely form heading into 2023 as the Fed battles inflation, but a (hopefully) mild recession may help set stocks up for a better second half of the year.
Stocks Tumble in Wake of Hot Labor Report

U.S. equities are sliding as investors sift through the November labor report that showed stronger-than-expected job growth.
Diminishing Dollar Dominance?

One of the biggest trades this year has lost steam and its outlook for the next year has become much more mixed.
Oil Oscillates on Rumors and China Covid Controls

Oil prices swung down and right back up in Monday’s session among reports that OPEC+ was considering an output increase.
Stocks Increasing Amid Well Received Earnings Reports

U.S. equities are rising, although no notable directional drivers seem to be in play amid the holiday-shortened week, with the markets closed on Thursday for Thanksgiving and trading in a half day on Friday.
Equities Move on Fed Commentary

Although off their Thursday lows, equity index prices closed lower yesterday.
Investing for High Inflation and Slow Growth

High inflation and slow economic growth are a problem for investors. Here's how to shore up your portfolio.
Stocks Mixed Ahead of More Inflation Data

U.S. equities are mixed in restrained trading, with investors awaiting the next two pieces to complete the October inflation picture.
Stocks Climbed Amid Optimistic October Inflation Report

U.S. stocks posted its biggest daily gain since 2020 following data on October’s consumer price inflation (CPI), which came in cooler-than-expected.
Stocks Lower as Control of Congress Remains Unclear

U.S. equities are lower as the global markets await the final results of the U.S. midterm elections as the control of the Congress remains undetermined.
Stocks Tumble Following Fed Decision

U.S. equities finished lower with the Dow whipsawing within a more than 900-point range following the Fed's monetary policy decision.
Stocks Struggling to Add to Last Week’s Gains

U.S. equities are declining, struggling to continue the past two week’s positive momentum.
Bond Strategies to Consider: Ladders and Barbells

Short-term bonds currently offer higher yields than longer-term ones, but there are risks in holding only short-term bonds.
Revenge of the Markets

Markets can have more sway over policymakers than vice versa, as demonstrated in the U.K. recently.
Stocks Mixed in a Busy Day Full of Earnings Reports

U.S. stocks are trading mixed in pre-market action.
Inflation Is Up, so Why Are TIPS Returns Down?

Treasury Inflation-Protected Securities can be a buffer against long-term inflation, but it's possible for TIPS price declines to outpace principal adjustment in the short term.
Inflation Fears Strike Again

Inflation concerns on Friday once again pulled the rug from under investors struggling to find their footing as the Federal Reserve's battle against rising consumer prices shakes the economic terrain.
Stocks Mixed in Choppy Action as Inflation Data Eyed

U.S. stocks are mixed and subdued as the markets digest another hot inflation report in the form of the September Producer Price Index.
Stocks Mixed Ahead of Key U.S. Inflation Reports Later This Week

U.S. equities are mixed as investors await this week’s highly anticipated September inflation data.
Stocks Dipping to Begin the Day, Ahead of Tomorrow's Jobs Report

U.S. stocks are trading modestly lower in pre-market action with the markets awaiting tomorrow's key September nonfarm payroll report.
Stocks Bounce Off Lows with BoE Action in Focus

U.S. equities are higher in afternoon action following a recent plunge to lows not seen since 2020.
The Plunging Pound

Bleeding into this week, the British pound reached its lowest level ever Monday, relative to the U.S. dollar.
Oil Nears Near-Term Support

Oil has been routing since summer after reaching historic highs of over $130 per barrel, but we may see some relief soon as near-term events may trigger a rally.
Stocks Higher With Monetary Policy Actions in Focus

U.S. stocks are moving higher in pre-market trading, following yesterday's third-straight 75-basis point rate hike from the Fed.
Stocks Lower in Anticipation for Tomorrow’s Fed Decision

U.S. stocks are declining in pre-market trading as the markets await the Fed’s highly anticipated monetary policy decision tomorrow.
Bulls Looking to Halt Yesterday's Plunge

U.S. equities are modestly higher in afternoon action on the heels of yesterday's sharp drop that came as consumer price inflation surprisingly came in hot.
Silver Up, Then Down

Silver rallied to start the week as all contract months were up four percent or more.
Stocks Extending Last Week's Rebound

U.S. stocks are starting the week in positive territory, extending last week's advance that snapped a three-week losing streak.
Powell Pivot

Federal Reserve Chair Jerome Powell’s hawkish comments dominated the markets on Friday, with the major indices all seeing a drop of over 3%.
Stocks Continued Last Week's Decline Amid Friday's Fed Comments

U.S. stocks ended the day in the red, continuing last week's sharp drop following comments from Fed Chairman Jerome Powell last Friday that heightened inflationary concerns.
Hedging

Equity markets plunged to start the week based on increased FOMC pressure to raise rates to combat inflation.
Oil Climbs on Storage Draw

Crude oil futures ended higher, reversing losses earlier in the week after news that U.S. crude inventories fell sharply.
Stocks Trading Subdued Amid Reports on Home Sales

U.S. stocks are subdued following yesterday’s release of the minutes from the Fed’s July monetary policy meeting.
Crude Oil Unable to Rebound

Crude oil prices dropped substantially to start the week after the dollar rallied.
Stocks Trying to Battle Back From Early Weakness

U.S. stocks have come off the worst levels of the day and are threatening a move into positive territory.
Stocks Increasing Following Additional Release of Inflation Data

U.S. stocks are moving upward, continuing yesterday's rally, as the markets digest the release of the Producer Price Index.
Stocks Mixed Ahead of Inflation Data

U.S. stocks are trading mixed in pre-market action, with the markets anticipating tomorrow's start of a flood of July inflation data.
The Strong Dollar: Can It Continue?

A trifecta of factors support the dollar, including the relatively strong performance of the U.S. economy, tightening monetary policy by the Federal Reserve, and safe-haven buying.
Stocks Finish Lower in Bumpy Trading Session

U.S. equities finished mixed in choppy trading amid a host of data, events and cautious Fedspeak driving sentiment.
Looking to the Futures: GDP Declines for a Second Straight Quarter

The U.S. has experienced another quarter of reduced output, in the face of high inflation and rising interest rates.
Stocks Higher as Fed Decision Nears

U.S. stocks are trading higher as the Street is reacting positively to softer-than-expected earnings results from some key companies.
China's Yo-Yo Economy

Although an economic rebound in China is underway according to government and private sector data, its economy and stock market may remain volatile.
Stocks Solidly Higher in Afternoon Trading

U.S. equities are seeing solid gains, as the bulls look to sustain the rise today after failing to do so yesterday.
What's Going On...With Jobs

The June jobs report was cheered by economic bulls given its strength in level terms, but rates of change among leading indicators don't favor a soft-landing outcome for the economy.
Fed Rate Hikes: Why Are Bond Yields Falling?

The Federal Reserve's pledge to curb inflation appears to have resonated with the market.
Stocks Falling in Comeback From Holiday

U.S. stocks are seeing pressure in early action following the long holiday weekend, with global recession concerns weighing on sentiment.
Bitcoin Tests $19,000

The crypto investing front has taken another barrage of body blows, pushing Bitcoin to test the $19,000 per coin level once again.
2022 Mid-Year Corporate Credit Outlook

After the steep drop in prices during the first half of this year, yields on many corporate bond investments are at or near 12-year highs.
Stocks Adding to Weekly Gains

U.S. stocks are extending weekly gains, rebounding from yesterday afternoon's slide as the markets remain choppy amid lingering global recession concerns that have been bolstered by monetary policy tightening efforts around the globe aimed at getting high inflation under control.
Signs Point to Rising Recession Risk

Rising inflation, rate hikes, supply-chain problems and the Russia-Ukraine war have contributed to growing recession fears.
Today's Options Market Update

Stocks modestly lower ahead of tomorrow’s inflation report.
Schwab Market Update: Stocks Lower as Volatility Continues

U.S. equities are lower as the recent volatility continues despite yesterday's gains.
2022 Mid-Year Outlook: U.S. Stocks and Economy

Sharp, countertrend rallies may continue this year, but aggressive Fed policy, the turning of the liquidity tide, and slower economic growth will likely keep pressure on stocks.
Think Twice Before Buying a Muni Below Par

Municipal bonds acquired at too deep a discount could be subject to an additional tax, known as the de minimis tax, which would take a bite out of the after-tax return.
Schwab Market Update: Markets See Pressure Amid Disappointing Data

U.S. equities are trading lower in afternoon action with the markets unable to extend yesterday's solid gains.
Schwab Market Update: Losses Accelerate into the Close

U.S. equities plunged, finishing near the lows of the day, following disappointing quarterly results from Target Corporation and Lowe's Companies, with both retailers warning of rising cost pressures.
Looking to the Futures: Natural Gas Spikes on Hot Temps

Natural gas prices traded higher to start the week after forecasts show hotter than average temperatures in the United States.
Schwab Market Update: Stocks Remain Hamstrung as Conviction Continues to Cool

U.S. stocks are trading lower as another week begins on the heels of six-straight weekly losses for the S&P 500.
Stock Market Volatility: Schwab’s Quick Take

U.S. stocks suffered another day of losses Monday, as the market continued to weigh the risk that the Federal Reserve’s aggressive anti-inflation campaign could push the economy into recession.
50 Ways to Leave Your Mark

As expected, the Federal Open Market Committee (FOMC) raised the fed funds rate by 50 basis points, to a range of 0.75% to 1.0%.
Hedging Stocks Against Rising Rates

Stock prices and bond yields have been moving in opposite directions this year.
Stock Market Volatility: Schwab’s Quick Take

U.S. stocks fell Friday, extending a run of weekly losses into its third straight week, as investors reacted to a handful of disappointing earnings reports and the Federal Reserve’s increasingly aggressive language about future interest rate increases.
Land of Confusion: Soft or Hard?

Recession chatter has picked up increasingly for numerous reasons, not least being the spike in oil prices, slowdown in economic growth estimates, and the Fed's transition from accommodative to tighter monetary policy.
Deglobalization Is Political, Not Economic

The "end of globalization" is a phrase that has come up a lot lately.
No Quarter (For Consistency)

There is no shortage of headwinds facing both the market and the economy: the tragic Russian invasion of Ukraine and attendant commodity/energy crisis; the Federal Reserve's transition from accommodative to tighter monetary policy; and increased chatter of a recession on the horizon; among others.
Why to Consider Preferred Securities Now

Preferred securities prices have fallen sharply, presenting an attractive entry point for income-oriented investors who can ride out the volatility.
Cryptocurrencies: How You Could Invest in Them

You’ve researched the nuts and bolts of cryptocurrencies and considered whether you should invest in them.
Muni Pension Risk? It's in the Past for Now

Unfunded pensions for state and local governments were once expected by some to sink the whole market.
7 Things You Can Do During a Volatile Stock Market

Bouts of market volatility are an unnerving, but normal, feature of long-term investing.
Liftoff: Fed Hikes Rates, Signals More to Come

The Federal Reserve announced a 25-basis-point increase in the target range for the federal funds rate, to a range of 0.25% to 0.50%, its first rate hike since December 2018.
War in Ukraine: Recession in Europe?

The past isn’t a perfect predictor of market behavior, but it has proven to be a useful guide.
Schwab Market Perspective: Fog of War

The Russian invasion of Ukraine overturned a lot of assumptions about the near-term direction of the global economy.
Schwab Sector Views: War Clouds Our Outlook

We're changing all our sector calls to "neutral" until there's more clarity on how the Russia-Ukraine war will affect the global economy.
War: What is it Good For? Absolutely Nothing

The war between Russia and Ukraine—and subsequent economic and financial ripple effects—has exacerbated stress in global markets and ushered in an acute risk-off environment.
2022 Outlook: Stocks, Bonds, and More

After living through more than two years of COVID-19, its variants, and the attendant supply-chain disruptions and inflation concerns, one thing is clear: Uncertainty is the only certainty.
Schwab’s Quick Take: Russia Invades Ukraine

Markets have already reacted to the threat of a Russian invasion of Ukraine in a textbook manner akin to prior similar events that we have outlined in prior articles on January 31 and February 22.
Preferred Securities: Balancing Yield with Risk

Preferred securities are a type of investment that generally offers higher yields than traditional fixed income securities, such as U.S. Treasury securities or investment-grade corporate bonds.
Geopolitical Risk Update: Russia-Ukraine

In an apparent desire to create a weakened border state unable to join NATO, Russia supported separatists in eastern Ukraine by recognizing the independence of two regions: Donetsk and Luhansk. In support, Russia ordered “peacekeeping” troops to the areas, prompting sanctions by world powers.
Schwab Market Perspective: Slipping Gears

In recent weeks, it has felt like the U.S. stock market slips a gear every so often, dropping sharply as investors search for traction in uncertain terrain.
Surprise, Surprise: Jobs Surged

After “whisper” estimates for the December jobs report, out last Friday, had plunged well into negative territory, payrolls instead jumped by 467k—well above the official consensus of only 125k, and close to twice the highest Bloomberg estimate.
Market Volatility: Schwab’s Quick Take

U.S. and global stocks fell sharply Thursday as global interest rates rose and certain sectors posted weak earnings.
What Happens to Munis When the Fed Hikes Rates?

The Federal Reserve has indicated it plans to start raising short-term interest rates soon.
Guide to Geopolitical Risk: Russia-Ukraine

Markets appear to be reacting to military developments in Ukraine.
Fed’s Message: Get Ready

The Federal Open Market Committee (FOMC) of the Federal Reserve did not make any formal changes to its policy, but did signal it would begin raising the fed funds rate soon.
What Do Rising Rates Mean for Stock Investors?

Last week, U.S. Treasury bond yields, climbed back to their pre-pandemic levels.
The Fed’s Policy Tightening Plan: A One-Two Punch

The Federal Reserve dealt the bond market a sharp body blow on January 5th with the release of the minutes of its last Federal Open Market Committee (FOMC) policy meeting in December 2021.
2022 International Bonds Outlook: Neutral, for Now

A change in fundamentals could make international bonds more attractive.
Top Global Risks of 2022

Despite the strong year for stocks in 2021, markets have confidently priced in some negative trends gathering more momentum in 2022 which may help markets, should trends reverse.
Schwab Sector Views: Semiconductors—Boom or Bust?

The semiconductor shortage and its impact on everything from autos to smartphone production has been much in the news. The shortage has been a boon for semiconductor stock prices. But it likely will resolve itself in the coming months—or years, depending on whom you talk to—raising the specter of a bust.
Schwab Market Perspective: Why 2022 May Be a Better Year

Some of the market’s recent pressures are showing signs of easing.
Understanding General Obligation Municipal Bonds

Given all the municipal bonds to choose from, how do you decide which ones should make up the core of your portfolio? With $3.9 trillion of muni debt outstanding1 spread among tens of thousands of issuers, the choice may seem daunting, but we’ll help you break it down.
Have Bond Yields Already Peaked for This Cycle?

Ever since the Federal Reserve started hinting it was planning to end its ultra-loose monetary policy, bond yields have been falling. That it happened in a booming economy with the highest inflation readings in nearly 40 years has taken a lot of investors and analysts by surprise.
Treasury Inflation-Protected Securities: FAQs about TIPS

Inflation continues to be a concern these days, and many investors are looking for investments that can keep pace with, or hopefully beat, the rate of inflation. As a result, Treasury Inflation-Protected Securities, or TIPS, have become a popular investment option.
Omicron: Will the Virus Wave Pattern Repeat?

As we wrote about in our 2022 Global Outlook, COVID-19 is becoming endemic rather than pandemic. We anticipate a winter wave of COVID, potentially with new variants like omicron.
2022 Schwab Market Outlook: Ebb Tide

The S&P 500 index is up more than 20% so far this year, but more than 90% of its member stocks have had “correction” level drawdowns—more than 10% from a peak—at some point this year. In short, while overall stock market performance has been strong, there has been a lot of churn beneath the surface.
2022 U.S. Market Outlook: Under Pressure

Bear with us as (no pun intended) you read this longer-than-usual outlook!
Market Volatility: Schwab’s Quick Take

U.S. and global stocks fell sharply Friday amid spiking fears about a new COVID variant, named Omicron, emanating from South Africa, where it’s spreading quickly. The S&P 500, Dow Jones Industrial Average and Nasdaq Composite indices closed down more than 2%, while the Russell 2000 fell nearly 4%.
2022 Global Outlook: Slowing But Not Slow

A high tide of growth, aided by a sea change in fiscal policy, is likely to help float the global economy safely over the rocks of risks in 2022, despite waves of worries emanating from COVID, inflation, shortages, and rate hikes.
2022 Muni Outlook: Near-Term Pain, Longer-Term Opportunity

Current low yields and tight spreads in the municipal bond market have made it difficult for investors to find opportunities to earn attractive interest income on their investments. We expect that to change in 2022.
Schwab Sector Views: What’s to Like and Dislike About Technology

Rarely is there any sector that has everything going for or against it—and that is true today of the Information Technology sector.
Cryptocurrencies: How You Could Invest in Them

You’ve researched the nuts and bolts of cryptocurrencies and considered whether you should invest in them. Now you want to participate in the cryptocurrencies market. How do you do it?
Cryptocurrencies: Should You Invest in Them?

Bitcoin and other cryptocurrencies have been growing in popularity, but if you’re considering investing in them, there are some key things you should know first.
Cryptocurrencies: What Are They?

So what is cryptocurrency? Should you invest in it? How can you invest in it? We’ll cover all three topics in this and related articles. For now, here are answers to some of the most common questions about the basics of Bitcoin and other cryptocurrencies.
Will Shortages Lead to Gluts?

After a year of supply shortages, the global economy may be closer to the end of the supply chain problems than the beginning.
Begin the Begin: Fed Announces Start of Tapering

The Federal Open Market Committee (FOMC) announced the start of balance sheet tapering at a pace of $15 billion per month ($10 billion of Treasuries and $5 billion of mortgage-backed securities). They made no change to the fed funds rate, which remains near the zero bound.
You’ve Got to Earn It: Earnings Growth Strong, But Descending

Earnings season has been stellar so far, although the growth rate is well off its prior quarter peak, with profit margins in focus looking ahead.
Schwab Sector Views: What if Inflation Persists?

Signs are growing that inflation may be more tenacious than originally expected. We don’t believe a return to 1970s-style inflation is likely, but there is a worrisome scenario in which persistently sharp increases in prices could be a factor to reckon with—and if history is any guide, they could have an impact on sector performance.
Will Services Offset Weakness in Manufacturing?

Services make up more of the economy, jobs, and the stock market. The time has come to focus on services data to get a sense of the overall economic picture.
SPACs: What Investors Should Know Now

The speculative exuberance around special purpose acquisition companies (SPACs) seems to be over, but investors still have questions about them.
The Beast of Burden of Inflation

The age of abundance has given way to an age of scarcity, while the pro-cyclical version of inflation may have given way to the counter-cyclical version.
Supply Chain Breakdown: Its Causes and Effects

Supply chains typically aren’t something the average person needs to think about too much. When they’re working, these high-tech, globalized networks of parts suppliers, assemblers, shippers, and distributors allow companies to make and move goods around the world so quickly and cheaply that it’s tempting to take them for granted.
Flavor of the Weak: Notable End to Some Key Winning Streaks

September closed with a whimper (from folks hoping the seven-month stretch of positive performance months for the S&P 500 would make it to eight). The month also held true to the history of September being the worst month for performance on average since the index’s inception in 1928.
Inflation: Persistently Transitory

Looking ahead, new sources of inflation may continue to arise. Unless the mounting pressures push inflation to significantly higher levels that would provoke central banks into aggressive tightening, the impact on global stock markets may be a positive.
Waiting for Rates to Rise? What You May Miss by Staying in Cash

There is a cost to waiting for interest rates to rise—you may be missing out on higher coupon rates and yields elsewhere. Rather than waiting on the sidelines for yields to rise, investors should consider short-term corporate bonds today—specifically those with fixed coupon rates.
Market Volatility: Schwab’s Quick Take

U.S. stocks fell Tuesday on persistent concerns over the debt ceiling, along with a continued increase in Treasury yields. The S&P 500 closed down 2%, the Nasdaq fell 2.8%, and the Russell 2000 fell 2.3%.
It's All Over for Japan (and That's Good)

The performance momentum could continue with the reopening of the nation’s capital reinvigorating economic growth, the strong upward trend in revisions to analysts’ earnings estimates for Japanese companies, lower relative valuations, and a historically bullish pre-election period.
Songs of Experience: Reminiscences of a Strategist

It was 35 years ago this month that I began my career on Wall Street. In thinking about those three-and-a-half decades, I decided to shift tack with today’s report and ask readers to indulge me as I ruminate about what I’ve learned during these decades.
Is the Treasury Bond Market About to Wake Up?

The bond market has been in hibernation for months, and investors may have become complacent about risks.
Will Rising Federal Debt Slow Economic Growth?

Over the past 70 years, rising government debt generally has been accompanied by weaker economic activity. But it’s not a simple relationship.
Payback Time With a Potential Payoff

A gradual slowing of stimulus heralds a potential drop for the world’s stock markets, but the evidence suggests a possibility for a positive outcome.
Municipal vs. Corporate Bonds: How to Choose

How do you choose between corporate and municipal bonds? Both have characteristics that can be useful in your portfolio, depending on your goals and circumstances, but they’re not right for every situation.
Dollar Outlook: Can the Rally Continue?

Now that the dollar is near the year’s highs, can the rally continue? We believe it can in the near term, although our longer-term view is more nuanced. Here’s what we see ahead.
SPACs: What Are They, and Are They a Risk to the Market?

Special purpose acquisition companies (SPACs)—also known as blank-check companies—have gained immense popularity among investors since the beginning of 2020, despite being around for decades.
Can Investors Avoid Rising Supply Chain Risks?

Supply chain issues are worsening again, reversing improvements seen earlier this summer.
You Take My Breadth Away: Market’s Underlying Deterioration

The stock market could use some mouthwash.
Will Taxes Rise for the Wealthy?

The latest major initiative from the White House—a package of social measures known as the American Families Plan, comprising expanded child care assistance, two years of free community college, universal prekindergarten, and more—includes proposed tax increases on the wealthy to help fund the plan.
Fed Tapering: Will it Be Different This Time?

As the Federal Reserve transitions from merely talking about tapering its bond holdings to actually tapering, investors may be left wondering what it might mean for the markets and their portfolios.
Fed Tapering: Will it Be Different This Time?

Although the prospect of the Federal Reserve tapering its bond purchases has unsettled markets in the past, we expect it to be more orderly this time around.
Bitcoin FAQs

News about Bitcoin and other cryptocurrencies, much like hearing about a neighbor who won the lottery, have been impossible to ignore lately.
Is China’s Bear Market an Opportunity?

China’s stock market pullback this year has been in line with the average annual drawdown; historically, this volatility has tended to produce double-digit annualized gains.
Where To Invest Now: COVID And Correlation

COVID-19 resurgences appear to be the primary driver of moves across many markets this year.
Preferred Securities: High Income, but Near-Record Prices

For investors considering preferred securities today, there is good news and bad news.
Lockdown Leadership Unlikely To Last

In the last few weeks, stock market leadership reversed back to lockdown-era defensives as the stock market made new all-time highs.
How Will the Western Drought Affect Munis?

More than 75% of the West is in an extreme or exceptional drought, with over 58 million people living in a drought area—and expectations are that it will get worse.
Will Rising Federal Debt Slow Economic Growth?

There is always a lot of controversy around the implications of high and rising government debt. Over the past 70 years, rising government debt has generally been accompanied by weaker economic activity.
Treasury Inflation-Protected Securities: FAQs about TIPS

Inflation continues to be a concern these days, and many investors are looking for investments that can keep pace with, or hopefully beat, the rate of inflation
Is Good Data Now Bad News?

It is possible that good data could be interpreted as bad news for the U.S. stock market at least in the near-term as strong economic data, especially on jobs, could prompt the Fed to unwind earlier.
Fed Still Hasn’t Found What it’s Looking For

The Fed made no changes to its interest rate or balance sheet policies; but some of the language in its statement was tweaked, reflecting recent hotter inflation data.
Schwab Market Perspective: Beneath the Surface

To get the facts, sometimes you need to look beneath the surface.
Market Snapshot

Liz Ann Sonders shares her perspective on the U.S. stock market and economy in this monthly Market Snapshot video.
2021 Mid-Year Outlook: Global Stocks and Economy

The recovery is now over; a new global economic expansion has begun.
2021 Mid-Year Outlook: U.S. Stocks and Economy

Second quarter is likely the peak growth rate for both the economy and corporate earnings; with positive economic surprises waning.
Is the Stock Market Disconnected From the Economy?

Is the stock market disconnected from the economy?
Bitcoin FAQs

Bitcoin and other cryptocurrencies have been getting a lot of attention lately.
Schwab Market Perspective: Will the Economy Overheat?

A boom in spending has stirred fears of economic overheating, which has coincided with a surge in commodity prices and a lift in traditional inflation metrics.
Is 1970s-Style Inflation Coming Back?

With commodity prices soaring, money supply growth exploding, and government spending surging, there is a palpable fear of a return to 1970s-style inflation.
SPACs: What Are They, and Are They a Risk to the Market?

Special purpose acquisition companies (SPACs)—also known as blank-check companies—have gained immense popularity among investors since the beginning of 2020, despite being around for decades.
Boom Boom Pow: Have Stocks Already Priced in Economic Boom?

Economic and earnings data are in boom territory, with more momentum likely near-term.
Rising Inflation: What It Means for TIPS and Other Investments

Inflation is likely to rise in 2021—but will the rise be sustained? That seems to be the million-dollar question lately.
4 Tips for Handling a Potential Capital Gains Tax Change

This week’s unveiling of the American Families Plan, the latest proposal from the White House, makes it clear that President Joe Biden is serious about pursuing some of the individual tax increases he called for during the 2020 campaign.
What’s Working? Two Ideas For Investors

In recent months, two investment themes have been rewarding investors with outperformance: defense sector companies and those participating in share buybacks.
Pump it Up: Earnings Season Starts Off Strong

Although it’s early in the first quarter earnings reporting season, it’s worth a look at the progress so far and the implications for the rest of the season, as well as valuations.
The Next Bubble?

Hundreds of years of history shows us that investment bubbles have been a regularly occurring feature of the financial markets.
Rising Rates: When to Consider Floating-Rate Notes

Floating-rate notes can help lower a portfolio’s sensitivity to interest rate changes, but they aren’t necessarily the secret weapon to combat a rising-rate environment.
Hit Me With Your Best Shot: Speculative Trades Take a Breather

As Shakespeare might put it, “full of sound and fury, signifying nothing” is perhaps an apt way to describe the character of the market so far this year.
Stimulus Payback: 2023

Policymakers in major economies have pointed to 2023 as the date the stimulus payback may begin.
Will the U.S. Dollar Lose its Reserve Status?

We are often asked if the U.S. dollar will lose its status as the world’s reserve currency.
Bull? Bear? How about a “Bunny” market?

This probably isn’t the start of a bear market, but it may feel like less a bull market compared with last year’s charge.
Moving, With Bottlenecks

U.S. economic growth is accelerating as vaccinations rise and social-distancing measures ease, but hopes for a long-lasting spending boom may hit a couple of speed bumps. Vaccine rollouts in major countries are proceeding at different speeds, but stock market performance contradicts what vaccination data would seem to imply for investors. Meanwhile, inflation-adjusted longer-term Treasury yields have risen as investors anticipate stronger economic growth.
Is the Stock Market Disconnected From the Economy?

Is the stock market disconnected from the economy? Perhaps, but less so lately.
Red Flag Day: Bond Yield Spike Denting Euphoric Sentiment

“Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” -Investor and mutual fund manager Sir John Templeton
Corporate Bond Market: Is a “Zombie” Apocalypse Coming?

What’s a “zombie company”? You may have heard the term in the financial media recently and wondered if it’s something you should be worried about.
Have EM Stocks Lost Their Immunity to Rising Rates?

Accelerating growth is generally a good thing for stocks, evidenced by bond yields and stock prices typically rising and falling together.
Message from the Recent Bond Market Turmoil

The late-February spike in U.S. Treasury bond yields sent ripples throughout the global markets. As yields surged to the highest level in a year, stocks and commodities sold off sharply, while the dollar rallied.
EleVation: Some V-Shaped Economic Data to Cheer

Looking at the latest economic data reveals V-shaped recoveries in many goods-based indicators; while services has more catch-up to do.
Year of the Ox: Bullish for China?

The Year of the Ox looks bullish for China with economists and analysts forecasting GDP growth of 8.1% and earnings growth of 18% for the MSCI China Index. But February holds key developments for China that could impact this outlook, including stock delistings, trade, and COVID-19.
Schwab Market Perspective: Disconnection

Hope is high that economic growth will accelerate as more people are vaccinated against COVID-19, but so far economic data has been lackluster. Meanwhile, bond investors are expecting inflation despite signs that the economic recovery’s momentum may be stalling. Why does everything seem so disconnected?
Active Semi-Transparent ETFs: What’s Under the Hood?

This is a new type of exchange-traded ETF that is built differently from a traditional ETF.
Lesson Learned? Takeaways From the GameStop Saga

As quickly as it soared to the moon, GameStop came back down to earth; but the lessons learned are key to turning day trading speculators into longer-term investors.
Why Widespread Muni Defaults Are Unlikely to Happen

The COVID-19 crisis opened up cracks in the muni market, but we don’t expect those cracks to alter the reality that municipal bonds can be a relatively conservative investment option. Many municipalities are under stress, but that’s not a reason to avoid munis, in our view.
Your Portfolio May Be Less Diversified Than You Think

When investors talk about “the stock market” they are most often referring to an index that tracks stocks only in their home country. This “home bias” is evident when it comes to the make-up of investors’ stock portfolios. Investors around the world tend to hold mostly domestic stocks.
Steady as We Go: Fed Keeps Rates Unchanged

As expected, the Fed kept rates unchanged; but did make clear its view that vaccines are key to the trajectory of the economic recovery.
Considering Bank Loans? Three Key Considerations

Bank loans offer some of the highest yields in the current interest rate environment. We believe their unique characteristics may prevent many investors from considering them, but it may be a mistake to overlook them.
Bridging the Gap(s): Converging and Diverging Trends Stemming From the Crisis

As a review of the year that was, today’s report analyzes and dissects the nature of the K-shaped recovery in both the economy and stock market.
Five Names for Investors to Know in the New Administration

Their decisions in the coming months could have an impact on the markets and investors.
An Investors’ Guide to the 2021 Elections

Joe Biden takes the Presidential oath of office this week in the U.S., marking the end of a long U.S. political contest; a year of political challenges is just getting started overseas.
Why Longer-Term Treasury Yields Are Rising

The new year kicked off with a sharp rise in Treasury bond yields, despite unprecedented political turmoil and signs that the economic recovery is slowing.
Schwab Market Perspective: A Narrow Path Up

U.S. stocks have continued to climb amid optimism about a vaccine-led economic recovery, but it’s a narrow path—buoyant investor sentiment could easily be deflated by bad news. Although global economic growth has struggled, an acceleration in vaccinations in major countries could support stronger growth in the second quarter.
Washington in Turmoil: What Investors Should Know

It has been an extraordinary start to 2021 in the nation's capital. The images of a mob protesting the outcome of the presidential election by overrunning the U.S. Capitol building on January 6th are already seared into the nation’s collective memory. A week later, the House of Representatives, for the first time in American history, impeached a president for a second time.
Scar Tissue: Weak Jobs Report Emphasizes COVID’s Scars

Last week was shocking and extraordinarily sad; and as if Americans didn’t have enough with which to contend, it was capped off by a weaker-than-expected December jobs report.
LIBOR’s Slow Phase-Out Continues

LIBOR is still being retired, just a little later than initially expected.
Georgia Runoffs Hold Key to Senate Control, 2021 Policy Agenda

While Election Day is two months in the rearview mirror, the election is not over. A runoff election in Georgia on Tuesday, January 5th, will determine the balance of power in the U.S. Senate, a historically unprecedented scenario that will have a profound impact on President-elect Joe Biden's ability to move his policy agenda forward in the first two years of his presidency.
Top Five Global Investment Risks In 2021

After a powerful rally for stocks for much of 2020, let’s take a look at the biggest potential downside risks for investors in the year ahead. While none of these scenarios make our base case for 2021, a review of the top investment risks in greater depth may be prudent as we enter the New Year.
The Song Remains the Same: Fed Keeps Rates/Balance Sheet Steady

As expected, the Federal Reserve’s Federal Open Market Committee (FOMC) voted unanimously to keep the federal funds target rate in a range of zero to 0.25%; where it’s been since March. A majority of FOMC officials maintained their forecast that the rate would be kept near zero at least through 2023.
Rise Up: Vaccines Brought Broader Market Participation

September 2 was a momentous day on several fronts. It was the initial pop to all-time highs for both the S&P 500 and NASDAQ; after an impressive run from the March 23 pandemic low. It was also a turning point in terms of market leadership; reflecting budding optimism about a turn-for-the-better in economic data.
Schwab Market Perspective: Watching the Wheels

Encouraging news about COVID-19 vaccines has boosted hope for stronger economic growth, kicking off a rotation in stocks and equity sectors as investors look to a brighter future. However, near-term volatility is possible, as we’re not yet out of the coronavirus tunnel.
A Vaccine: The Best 2020 Holiday Gift

Key Points
-
A COVID-19 vaccine could start being administered globally this week.
-
The planned rollout is good news that has lifted the stock markets around the world. But the reality of the rollout faces risks that could extend the time frame for mass immunizations.
-
We expect markets to be volatile in coming months while the threat of new lockdowns weighs against the hope of recovery, although we believe we may be on the verge of a period of international stock market outperformance.
Understanding General Obligation Municipal Bonds

Given all the municipal bonds to choose from, how do you decide which ones should make up the core of your portfolio? With $3.7 trillion of muni debt outstanding1 spread among tens of thousands of issuers, the choice may seem daunting, but we’ll help you break it down.
2021 Schwab Market Outlook: On the Path to Recovery

With COVID-19 vaccines on the horizon, the longer-term economic outlook appears brighter.
2021 Muni Bond Outlook: Storm Clouds Clearing

We expect the municipal bond market to return to a sense of normalcy in 2021.
2021 Credit Outlook: Smoother Road Ahead

It was a bumpy ride for corporate bond investors this year. After the sharp, pandemic-driven selloff in February and March, total returns for most corporate bond investments have climbed their way back into positive territory.
2021 Fixed Income Outlook: Calmer Waters
Ten-year Treasury bond yields may rise as high as 1.6% in 2021, reflecting prospects for faster economic growth.
Changes: Vaccine News Changing Market’s Leadership Characteristics?
This week’s report will look at last week’s market moves in the wake of positive vaccine news (with additional and even better news today); but will also review our most recent tactical recommendation change.
Vaccine News Improves Outlook

Actual third-quarter earnings may be less important than what business leaders say about their expectations.
Vaccine News Shakes Up the Stock Market

Investors looking past the presidential election for the next market-moving news break were rewarded earlier this week when Pfizer announced that it had made some headway in the fight against COVID-19.
Election Day to Inauguration Day: A Test for Global Stock Markets

Stock market performance during the transition period between outgoing and incoming U.S. presidents tends to be more dependent on the economic cycle than the election results.
Still the Same: Fed Keeps Monetary Policy Steady

The Fed did not add to this week’s uncertainties and kept rates unchanged, while also providing no new information with regard to its balance sheet.
Election Implication FAQs

Investors likely have many questions about the 2020 election. Votes were still being counted late Wednesday, but here are answers to some of the most frequently asked questions we’re hearing.
What to Expect from the “Lame Duck” Congress

While the election remains too close to call, investor attention will soon turn back to Capitol Hill, where senators will reconvene on Nov. 9 and House members on Nov. 16 for what is known as a “lame duck” session of Congress.
Elections and the Bond Market

There are many major policy decisions that will influence the outlook—trade, energy, taxes and budget deficits, and pandemic relief. However, it’s difficult to assess how these issues will be addressed post-election, and even more unpredictable how the market will react.
Too Much: Market Succumbed Again to Trifecta of Virus, Fiscal Relief and Election Uncertainty

For the third time since the COVID bear ended its short havoc, U.S. stocks went into pullback mode—culminating in the worst week since March. The virus itself continues to be a culprit; with another surge in cases and hospitalizations; although not for deaths, at least not yet. The lack of a fiscal relief package and heightened election uncertainty are also to blame.
Rising COVID-19 Cases Deepen Stock Selloff

Stocks tumbled again on Wednesday, as worries about rising COVID-19 cases and hospitalizations sent investors toward the safe havens of U.S. Treasuries and the dollar.
“De-globalization” Already Happened And It Didn’t Matter

The “end of globalization” is a phrase that has come up a lot lately. Stories written about deglobalization have soared this year with the pandemic.
Mixed Emotions: Sentiment Telling Divergent Stories

Investor sentiment is telling a mixed story about the market’s ascent since the March low; begging the question, will the skeptics converge with the optimists?
Schwab Market Perspective: Turning to Earnings Season

Actual third-quarter earnings may be less important than what business leaders say about their expectations.
Do Bonds Still Provide Diversification?

Given current low yields, some investors wonder whether bonds can continue to provide diversification in a portfolio. Here’s why those fears may be overblown.
Global Impact of a “Blue Wave” Election Outcome

The potential economic and market impacts a “Blue Wave” for the U.S. election could have on five key areas: taxes, labor, the environment, oil and trade.
Are Transportation Revenue Bonds Ready for Takeoff After Being Grounded Earlier This Year?

The transportation sector in the municipal bond market faces significant headwinds as a result of the COVID-19 pandemic.
High-Yield Bonds: Higher Income Potential, But Default Risk is Elevated

High-yield bonds can generally offer more income in a very low-interest-rate world. However, if the economic or stock market outlook deteriorates, it could be a bumpy ride.
Election Blues: Looking at Election History for Market Guidance

With investors already on edge regarding election uncertainty, an “October surprise” arrives yet again. Can history provide some guidance on how elections impact markets?
Risk of Second Wave of COVID-19 Lockdowns

The biggest political risk facing investors may be the potential for politicians to implement national lockdowns in response to a rise in new COVID-19 cases that could lead to renewed recession and a new bear market for stocks.
Market Correction: What Does It Mean?

When a stock index falls by more than 10%, it is often said to have entered “correction” territory. That’s a fairly neutral term for what feels like a nerve-wracking drop to many investors. What does a correction mean? What’s likely to happen after a correction, and what can you do to help your portfolio weather the downturn?
Unwind: Simple Rotation or Something More Sinister?

As of this writing, it’s a rough start to the week for U.S. equities. Major indices attempted to find more stable ground last week, but volatility risks persist and the bears are winning the latest round. Policy risks abound—not just election-related, but both monetary and fiscal policy as well.
Inflation Blues: Fed Keeps Rates Near-Zero, Officially Adopts Average Inflation Targeting

Fed maintained rates at near-zero, while also updating its summary of economic projections; now expecting a shallower economic contraction, but a slower recovery thereafter.
Rotation
The U.S. stock market hit pause in early September, as investors took a harder look at market overconcentration and frothy sentiment. Meanwhile, global economies may be entering a new phase, and the Federal Reserve’s newly announced inflation policy is likely to keep U.S. rates lower for longer.
Federal Reserve Raises the Inflation Hurdle

The Federal Reserve has changed its inflation policy. Here’s what it may mean for markets.
Crossroads: Shifting Tides in Stock and Labor Markets

Rotation away from the market’s prior momentum darlings continues. Friday’s jobs report had bullets for both the optimists’ and pessimists’ case studies. And improving productivity, partly due to work-from-home trends, could persist as a positive economic driver.
Big Tech Shares Dent Stock Market Recovery

Major tech-focused shares fell after helping drive the fastest stock market recovery in history.
Should Muni Bond Investors Be Concerned About Climate Shocks?

Prior to Hurricane Laura making landfall in Louisiana and the wildfires in California and parts of the West igniting, the U.S. had already experienced 10 different billion-dollar natural disasters this year.
Why Own Bonds When Yields Are So Low?

Bond investors face a challenging environment. The federal funds rate is back near zero, the 10-year Treasury yield remains stuck in a 0.5%-to-0.75% range, and inflation-adjusted (real) yields are deep in negative territory.
Stock Market “Inequality” Hides A Big Change

The recent imbalances in the stock market can lead to vulnerability; rebalancing portfolios may be valuable to help balance exposure to U.S. capitalization-weighted benchmarks relative to international stocks.
Federal Reserve Announces Inflation Goal Shift: What It Means for Investors

The move away from a precise 2% target likely means short-term rates will stay lower for longer.
High Hopes: S&P 500 Hits All-Time High Amid Pandemic/Recession

In a speedy round-trip, the S&P 500 hit an all-time high last week; meaning the rally since March is now an “official” bull market.
Bond Real Yields: What’s Happening Beneath the Surface

Treasury bond yields have been drifting quietly lower since early June. But there is more going on beneath the surface than it might seem at first glance. Real yields—nominal yields less inflation—have declined steeply into negative territory. While nominal yields are near record-low levels from the deep economic decline, inflation expectations are picking up.
Confidence Is Everything: 3 Things May Shake It

Confidence matters; faith in a brighter future drives risk taking, fueling growth through investment and consumption.
Schwab Market Perspective: Is the Worst Behind Us?

Although certain high-frequency data haven’t improved markedly, the threat of the virus has started to recede.
Another Tricky Day: Dissecting July’s Labor Market Report

The July labor market report had talking points for both the economic bulls and bears; with Congress on the hot seat to keep the recovery from faltering.
How Have Recent Developments Impacted Long-Term Returns?

Let’s take a look at how recent developments may have impacted long-term returns for stock market investors.
U.S. Dollar Outlook: What Could a Weaker Dollar Mean for Your Portfolio?

The U.S. dollar has fallen by about 7% against a broad basket of currencies since its mid-March peak. After a nearly decade-long bull market that saw it appreciate by more than 40%, we believe the dollar could be headed for a longer-term decline.
Policy of Truth: Fed Holds Rates Steady Amid Somber Outlook

The Fed left rates unchanged near-zero, as expected, while emphasizing that “the path of the economy will depend significantly on the course of the virus.”
Running on Faith: Are Stocks Discounting Too Powerful an Earnings Recovery?

Earnings have so far bested an extremely low bar, but stocks may be discounting too swift a recovery; while concentration remains a risk.
Are Emerging-Market Bonds Worth the Risk?

Investors must balance ongoing risks of the coronavirus against the extra yield the bonds provide.
Stock Market Reaction to Expiring COVID-19 Programs

If not extended or replaced, the fading support for the unemployed raises the risk of weakening economic momentum, turning the V-shaped recovery into a W.
Watching the Shape of the Recovery

U.S. stocks have been fairly resilient lately, even as coronavirus hotspots flare up around the country. Although consumers and businesses are increasingly worried about rolling shutdowns, major stock indexes generally have moved sideways. How long can this continue? Much depends on the shape of the economic recovery.
All Right Now: But a Long Way to Go to Recover

Rate of change and inflection points in economic data drive stocks; but in these unique times, the level of said data needs to be considered, too.
2020 Mid-Year Outlook: Municipal Bonds

The first half of 2020 was dominated by the COVID-19 pandemic, which hit the municipal bond market hard. State and local governments experienced a sharp and sudden drop in revenue, and an increase in expenses, amid stay-at-home orders and business shutdowns.
Preferred Stocks: Will Fed Bank Stress Tests Lead to Suspended Dividends?
We believe the risk that preferred-stock dividends will be suspended is low despite the recent announcement by the Federal Reserve that it is requiring banks to cap their common stock dividends.
Making Sense Of The Market (And Where We Can’t)
While no one is ever really comfortable losing money, we often hear from investors that they are most uncomfortable when it seems that the stock market isn’t making any sense whether it’s heading up or down. In order to help try to make sense of it all, let’s take a look at where the stock market makes sense right now and where it doesn’t.
Pause: Stocks’ June Consolidation Continues
COVID-19 headlines dominated equity market action last week, with the S&P 500 suffering a near-3% decline; although all is not grim. The number of virus cases has been spiking in states that opened earliest—including my new home state of Florida, which went from a mid-60s average age for confirmed cases to the current mid-30s average age.
2020 Mid-Year Outlook: Corporate Bonds
Investors should consider these various investments—cautiously. Given the challenging economic outlook and high level of uncertainty, we believe bouts of volatility are possible, albeit not to the level witnessed in February and March.
What A COVID-19 Second Wave Means For Investors
A second wave of global COVID-19 is getting a lot of media attention, but the appearance of a global second wave of cases is primarily driven by the different timing of first waves across countries—rather than second waves within countries.
Higher-Education Bonds in a COVID-19 World
As the economy reopens from COVID-19 restrictions, a question looms: What will colleges and universities look like come fall? Will students return to a more normal on-campus learning experience, some form of online experience, a combination of both … or will they simply not return?
2020 Mid-Year Outlook: Moving at Warp Speed
Economies and markets whipsawed in the first half of 2020. Here’s what we expect for the rest of the year.
2020 Mid-Year Outlook: Fixed Income
Returns for most fixed income asset classes are positive so far this year, but the numbers mask the rocky road markets have traveled since January.
Not Always Tax-Free: 7 Municipal Bond Tax Traps
Investors often think of municipal bonds, which are sold by local and state governments to fund public projects like building new schools and repairing city sewer systems, as being totally tax-free—but that’s not always the case.
Schwab Market Perspective: Mixed Signals
Why did stocks rise over the past month despite grim economic news? The Federal Reserve’s massive liquidity injection is one reason.
Fed and Watered: Rates to Stay Near Zero
As expected, the Federal Reserve kept rates unchanged at 0-0.25% and said it will keep them near zero through at least 2022, in a unanimous vote.
2020 Mid-Year Outlook: Global Stocks and Economy
In our 2020 Global Market Outlook, we cited many indicators pointing to heightened risk of a recession; now we highlight increasing signs of a recovery from one.
Disconnect the Dots: Main Street vs. Wall Street
The dominant question we’ve been getting from investors is about the perceived disconnect between what’s happening on Main Street and what’s happening on Wall Street.
What’s Wrong With the Rebound?
There may be something amiss with the stock market rebound. Ahead of any meaningful improvement in economic data, global stocks have gained about 30% over the past two months from their low on March 23, as measured by the MSCI World Index.
The Fed’s Corporate Bond-Buying Programs: FAQs
When the COVID-19 crisis shook markets in March, the Federal Reserve moved early and aggressively to help increase liquidity in financial markets.
Every Picture Tells a Story: “Chartbook” Look at Economy/Market
On a day that started with good news on an experimental COVID-19 vaccine, with the stock market showing strong early gains, today’s report is more visual and less wordy than normal. Since I know not every reader of these publications follows me on Twitter—where I’m constantly posting charts, tables and data that I find compelling...
Schwab Market Perspective: Riding the Liquidity Wave
Why did stocks rise over the past month despite grim economic news? The Federal Reserve’s massive liquidity injection is one reason.
What’s the Future Payback for the Stimulus?
It is becoming increasingly clear that the massive global stimulus is being financed by a rise in money, not debt.
Stocks Swing as Economy Confronts COVID-19
Negative corporate news and economic data buffeted stocks, after markets racked up wins in April.
Measuring Recovery In Real Time
A lot has happened in the month following global stocks’ low on March 23, as represented by the MSCI All Country World Index. Nearly every major country seems to have put the peak in new COVID-19 cases behind them by several weeks and the discussion has now turned to the timing and staging of re-openings.
How the CARES Act Can Help Small Businesses
Coronavirus-related stay-at-home orders and falling consumer demand have been extremely challenging for small businesses. If you’re a small-business owner, make sure you’re taking advantage of the help that’s available.
Energy Sector Blues
The effects of COVID-19 have been tough on the Energy sector, to say the least. With businesses around the global shuttered and vacations called off—and an estimated 40% of the global population ordered to stay at home—demand has fallen sharply. And that has taken both the price of oil and energy stocks down with it.
What Happens When a Corporate Bond Issuer Defaults?
With the U.S. corporate default rate likely to rise, a growing number of investors may be wondering what they should do if their bond issuer is unable to repay its debts. Unfortunately, the answer isn’t always straightforward. There are, however, several things corporate bond investors should know.
Oil Prices Fall Below Zero
Oil prices fell below zero on Monday for the first time in at least 155 years, dragging major stock indexes down, as well. West Texas Intermediate crude oil prices fell to -$37.63 per barrel during trading on Monday...
Loss, Strain & Butterflies: Earnings Plunging, Stocks Ignoring
Stocks and earnings don’t always move in tandem; with stocks typically leading earnings … but is the market’s rally too much, too soon?
Waiting for the Coronavirus Peak
The COVID-19 pandemic has severely affected the U.S. economy, with containment efforts leading to widespread business closings and surging unemployment—and stock market volatility. The key questions now are when can the economy reopen, and what happens when it does?
COVID-19 Continues to Weigh on Stocks
Weak data revived investor concerns about the economic impact.
Q2 Bond Market Outlook: Looking Beyond the Coronavirus Crisis
While the COVID-19 crisis is far from over, we expect central bank and government policies to be key to performance in the second quarter.
What Can Investors Expect From GDP Reports
The most widely used measure of economic activity, gross domestic product (GDP), will soon be released for the first quarter by different countries.
Box of Letters: What Shape Will the Recession/Recovery Take?
Labor market data has never looked as ugly, with more hits to come; but many are looking ahead at what an eventual recovery will look like.
Stocks Fall After Grim Jobs Numbers
U.S. stocks ended lower Friday, capping a volatile week of swings both higher and lower, as investors reckoned with the increasing evidence of the COVID-19 pandemic’s economic toll.
Stocks Drop as Coronavirus Fears Sink In
Stocks dropped on Wednesday as investors focused on growing fears about the human and economic toll of COVID-19. The S&P 500 index lost 4.4% on Tuesday, and at the close of trading was down about 27% from its February peak.
What Will The Recovery Look Like?
In a typical recession, the global economy tends to have large imbalances that take a long time to unwind, such as a housing bubble or overinvestment by businesses. This time the global economy is experiencing a shock, rather than the natural end result of a slow build-up of excesses.
Triage: Throwing Everything at the Virus
We know a lot more about COVID-19 than we did a few weeks ago; but there remain questions that are unanswerable at this stage. We don’t know how much worse this gets before it starts to get better...
Week in Review: Another Bumpy Week for Stocks
U.S. stocks fell again on Friday, ending another volatile week, as coronavirus fears outweighed central bank and government attempts to support the economy. The S&P 500 index fell 4.3% on Friday, and is now down 31.9% from its February peak.
Quarterly Market Outlook: Coronavirus Tips the Scale
As COVID-19 spread around the world in the early months of 2020, governments enacted quarantines, travel bans, school closings and other measures. Global supply chains were disrupted. Reduced demand is weighing on many industries, starting with travel, hospitality and leisure. Oil prices dropped after Saudi Arabia boosted production, in effect launching a price war with Russia. U.S. Treasury yields fell to record lows.
Fed Cuts Rates to Near Zero
In a surprise move on Sunday night, the Federal Reserve cut its short-term interest rate to the 0% to 0.25% range and announced a series of moves to address the economic threat posed by the novel coronavirus. The central bank used a full range of its potential policies to support the economy and financial system.
Stock Market Rebounds at the End of a Volatile Week
Stocks rebounded on Friday, ending a week of wide swings that drove major U.S. stock indexes into bear-market territory. Overall, it was a rough week for the stock markets.
Schwab Market Perspective: Coronavirus Hits Markets Hard
Stocks have plummeted this month as investors struggled to assess what impact the COVID-19 coronavirus may have on the economy.
Stocks Fall on Coronavirus, Oil-Price Fears
U.S. stocks fell again on Wednesday, with the Dow Jones Industrial Average closing in bear market territory.
Market Plunges on Coronavirus, Oil-Price Fears
U.S. stocks plummeted on Monday, with the S&P 500 index closing down 7.6%, its worst day since 2008, capping two weeks of extreme volatility amid the spreading coronavirus epidemic.
Manic Monday (Tuesday, Wednesday, Thursday, Friday)
In the easiest of times (are they ever, really?) it’s futile to make predictions about the market with any semblance of accuracy. Clearly, these are not the easiest of times; so the futility is magnified. Even with non-stop coverage of COVID-19; with every question answered, there’s another question to ask.
Schwab Sector Views: Coronavirus Changes Our Views
The coronavirus outbreak has affected global supply chains, consumer demand and interest rates. In response, we’re downgrading Financials and upgrading Utilities.
Coronavirus: Riskier Fixed Income Prices Swoon
Despite lower prices and higher relative yields, there’s room for prices of high-yield bonds, preferred securities and bank loans to fall further.
Fed Cuts Rates to Counter Coronavirus Risks
In a surprise move, the Federal Reserve on Tuesday lowered the target range for the federal funds rate, its key benchmark interest rate, by 50 basis points,or half a percentage point, to a new range of 1% to 1.25%. The reasoning behind the move was concern about the “evolving risks” to the economy posed by the coronavirus.
Q&A on COVID-19: The Economy, Markets and What Investors Should Do
Rather than trying to call the bottom, a more effective way to think about investing right now is to focus more on the duration rather than the decline. Markets may have further to fall, but they may not stay down for the rest of the year barring a severe pandemic.
Heartbreaker: Spreading Impact of Coronavirus
The impact of the coronavirus is spreading; both geographically and economically. Central banks will likely step in; but supply shocks are difficult to combat.
Coronavirus Spreads to Equity Sectors
The coronavirus outbreak and the Democratic primary have affected sector leadership. However, we’re keeping our sector views unchanged—for now.
The Coronavirus and Emerging Markets: Ready for a Rebound?
As a recovery in global manufacturing began to take hold in the fourth quarter of last year, commodity prices rose dramatically. Yet, emerging market (EM) stocks failed to see the similarly strong outperformance of U.S. stocks that typically accompanies rising commodity prices.
Will Coronavirus Have a Lasting Impact?
Although stocks rebounded after a sharp drop in January, the market’s reaction to the coronavirus outbreak highlighted stock vulnerabilities.
Sleight of Hand: Dissecting the Latest Employment Data
Friday’s jobs report, as well as other recent labor market data, has an “on the one hand; on the other hand” flavor to it.
Will the Coronavirus Outbreak Lead to a Market Breakdown?
While it is impossible to predict the extent a virus can spread and have greater consequences than past epidemics, history indicates that the global economy and markets have been relatively immune to the effects of past epidemics. A key reason is that global health organizations are prepared for outbreaks and effective when mobilized.
Virus: Could it be the Catalyst to Change Sentiment?
As expected, a long and strong move up in stocks attracts more and more believers and adherents, which can stretch sentiment to extremes, like now.
Trends Diverge as Markets Enter 2020
The U.S. economy split sharply in 2019—manufacturing activity lagged services, corporate profits lagged stock performance—while investor sentiment surged. How long will these divergences continue in 2020?
Best of What’s Around: Sticking with Large Caps
For nearly three years we’ve been tactically recommending overweighting large caps (S&P 500) and underweighting small caps (Russell 2000)—time for an update.
2020 U.S. Market Outlook: Ramble On?
Next year is set to start on a high note, with consumers and the Fed keeping the economy and market afloat; but risks remain elevated, including trade and elections.
Fed Holds Rates Steady, as Expected
The Federal Reserve left interest rates unchanged, as expected; while signaling rates would stay in their current range through next year.
2020 Market Outlook: U.S. Stocks and Economy
The U.S. economy likely will remain split in early 2020.
Are We There Yet?
U.S. stocks continue to trade near their all-time highs but recent hiccups in trade talks have re-emphasized that a deal remains elusive, decisively unpredictable, and incomplete. Key components of the first phase have yet to be put in writing and major structural issues—such as intellectual property theft and forced technology transfers—will remain unaddressed for the foreseeable future, confirming that little-to-no material progress has been made.
Does The Return Of QE Mean Big Gains For Stocks In 2020?
As we head into 2020, investors should be cautious in assuming that the return of central bank balance sheet growth means stocks will follow along. The real driver of the stock market in 2020 may be the outlook for growth tied to prospects for a comprehensive U.S.-China trade deal, which may revive growth in manufacturing and corporate earnings.
Shiny Happy People: Investors Cheering Stocks’ New Highs
-U.S. stocks entered November in the process of finally breaking out of their post-January 2018 trading range. -Along with new highs has come elevated optimistic sentiment; a near-term warning sign. -Spread between the “smart money” and “dumb money” recently reached an extreme.
Slowing Down While Speeding Up
While volatility has remained subdued and U.S. stocks are at all-time highs, a near-term concern is that investor sentiment may be getting a bit too frothy. The potential signing of a “phase one” U.S.-China trade deal and rollback of some tariffs has contributed substantially to the rally; yet the proposals made have yet to be corroborated by anything in writing.
Macro View is Obscure, but the Earnings Landscape Is Clearer
Although economic signals are mixed, bottom-up sector fundamentals help inform decisions on sector ratings.
Split Personality: U.S. Economy’s Bifurcation Persists
Last week’s key releases of job growth and ISM manufacturing data highlight the ongoing bifurcation in the economy; with the consumer bucking manufacturing’s malaise.
Fed Cuts Rates as Expected … Three and Done or More to Come?
As expected, the FOMC lowered the fed funds rate (and the IOER) by 25 basis points; with a slightly more hawkish tone in the accompanying statement.
Don’t Place Your Bets
While volatility has receded lately and geopolitical tensions haven’t heated up, little-to-no progress has been made on a comprehensive U.S.-China trade agreement; while the timetables for Brexit continue to shift. Although U.S. stocks are trading near their all-time highs, investor hesitation has persisted due to mixed economic data, the questionable effects of monetary policy and trade uncertainty. We continue to recommend that investors use volatility to rebalance and stay near their strategic asset allocations; maintaining our neutral stance on U.S. equities (with a bias toward large caps at the expense of small caps), and our neutral stance on both developed international and emerging market equities.
When Yields Talk, Sectors Listen
For certain sectors, a change in interest rates has a relatively large impact—and that impact has increased significantly in the “new normal” environment of low interest rates.
It’s Late: So Says the Profits Spread and Leading Indicators
-
Third quarter earnings season is underway, so it’s time to look under the hood.
-
A wide gap between S&P 500 profits and the broader NIPA measure from the BEA supports a late-cycle view.
-
The late-cycle view is also supported by weakening leading indicators.
Deja vu
Volatility has resurfaced due to a revival in trade tensions, heated political fighting in Washington, and confusion over whether the Fed will continue to ease or hold off on rate cuts later this month. Stocks have dropped back into a tight range and have still yet to breach their all-time highs. With the market still highly reactionary to major headlines and struggling to find its footing, we continue to recommend that investors stay near their long-term asset allocation. We also continue to recommend using volatility as a means of rebalancing; and maintaining a bias toward large-cap stocks at the expense of small caps. So long as myriad uncertainties continue to mount, we believe stocks will remain under some pressure and headway will be limited.
Don’t Buy Expensive Just Because It's Defensive
With a resurfacing in trade tensions and persistent economic uncertainties, investors should prepare for further volatility.
Welcome to the Working Week: A Look at the State(s) of Employment
Employment reports are increasingly in focus due to weak survey data and a risk that manufacturing’s weakness spills over to services/consumer segments.
Market Volatility: What Investors Should Know
U.S. stocks plunged Wednesday, as weak economic data rattled investors. Here’s what you should know.
Take Me to Your Leader: Analyzing the Latest Leading Indicators
The Conference Board’s Leading Economic Index was flat last month; and although at a cycle high, it remains in a flattish trend over the past year.
The Final Cut … or More to Come?
In line with expectations, the FOMC cut rates by 25 basis points; also lowering the IOER by 30 basis points to address liquidity problems in the repo market.
Confusion or Conviction?
Stocks have climbed higher but we don’t recommend attempting to trade around short-term moves; rather, investors should remain disciplined and diversified, and use any volatility to rebalance as needed. The consumer continues to drive the economy, while weakness is mostly still concentrated in manufacturing. Yet, the potential for volatility remains, as a comprehensive trade deal is not in sight, tariffs on consumer goods are still set to kick in on December 15, and monetary policy’s ability to spur growth and inflation may be waning. We continue to favor large caps over small caps and are neutral to U.S. and global equities.
Chop, Chop, Chop: Stocks’ Choppy Behavior Around Trade News
Stocks recently broke out of their short-term range on “good” trade news; but trying to trade around trade-related news has been a treacherous exercise.
Schwab Market Perspective: Storm Clouds Building
Risks to the market are growing but the American consumer continues to look strong. Some preparation for a potential storm are prudent, but no drastic actions are suggested.
Drifting Toward Defensives
It doesn’t appear that the U.S. has entered a recession yet, or even that one is imminent—although start dates to recessions typically aren’t known until we’re looking in the rear-view mirror.
War (What is it Good For?)
Economic uncertainty has spiked given the escalating U.S.-China trade war; with increasing risk it weakens the dividing line between the manufacturing and consumer sectors.
Mixed Picture Getting More Concerning
Stock markets have become more volatile as trade tensions have worsened and weakness in the manufacturing side of the economy has caused increasing concern. Swift resolutions to these issues seem unlikely and a dovish Fed may not be the elixir to what ails the economy. With the likelihood of persistent volatility in the coming months, we recommend investors stay broadly diversified and focused on the long term. From a tactical perspective, we remain neutral to U.S. and global equities; with a bias within the U.S. market toward large cap stocks relative to small caps. Investors should not attempt to trade around short-term moves in the equity markets; but instead remain disciplined, diversified, and use rebalancing as necessary.
Recession Watch (or Distant Early Warning?)
Current economic conditions do not look recessionary, but risks are rising and if we’re heading into one, it’s possible it already started.