The Emerging Markets Channel

Fed Will 'Wait & Watch' Before Raising Interest Rates

Fed Chair Jerome Powell used the “patient” word again last week. He also added new words that the Fed can “wait and watch” before raising rates again. And he added another new word, that whenever interest rate increases resume, they will be “gradual.” The stock markets loved it!

Fourth Quarter 2018 - The Year When Nothing Worked

2018 will be broadly remembered as a year when nothing worked and daily stock market volatility spiked. This contrasted with 2017 where seemingly everything pushed higher, and volatility was low. But in 2018, nearly every single asset class and all but one major stock market index (Brazil) around the globe posted negative returns.

How the Mighty Have Fallen

Although the FAANGs were the poster children of the fourth-quarter market rout, losses were broad-based across sectors and countries. These losses were strong reminders of how important it is to pay attention to a company’s stock price in addition to focusing on its fundamentals and long-term growth prospects.

International and Global Markets Commentary and Investment Outlook

Business uncertainty resulting from trade frictions will continue to put downward pressure on economic growth. As a result, investor confidence may remain fragile (recent price declines appear to reflect this). Concerns are unlikely to dissipate soon, but we contend that international growth stocks represent a good investment opportunity.

What’s Next for the Dollar, Gold, Stocks & Bonds?

The quip, “if you aren’t confused, you aren’t paying attention” needs to be replaced: “with the Fed confused, you better pay attention.” You may want to buckle up. Let me explain.

Weighing the Week Ahead: Will Corporate Earnings Results Change the Message of the Markets?

It is a light economic calendar without any of the most important reports. The government shutdown will command increasing attention as long as it continues. Finally, there is some real competition in financial news – the start of earnings season.

U.S. Policy Outlook for 2019: Trade Risks Continue, But Might Not Escalate

In our outlook for 2019, we believe politics and policy out of Washington will continue to drive – and in some cases, weigh on – markets, much like they did in 2018. Investigations and manufactured crisis are likely to contribute to uncertainty. Trade tensions persist, though on a more positive note, relations between the U.S. and China seem to be improving.

Emerging Markets Outpace Developed Markets in the Final Quarter of 2018

Numerous uncertainties weighed on investor sentiment in 2018 and led to a down year for emerging markets overall, although the fourth quarter saw some outperformance versus developed markets.

New Research on the Value of Global Diversification

Despite representing about one-eighth of global equity market capitalization, and despite the attractive valuations and growth prospects, the vast majority of U.S. investors have portfolios that dramatically underweight emerging market stocks. Here’s why that is a costly mistake.

Weekly Gasoline Price Update: Regular and Premium Mostly Unchanged

The price of Regular and Premium are mostly unchanged from last week. According to GasBuddy.com, California has the highest average price for Regular at $3.25 and Oklahoma has the cheapest at $1.86. The WTIC end of day spot price closed at 50.51, a 4.1% increase from this time last week.

World Markets Update

One of eight indexes on our world watch list posted a loss in the first week of 2019. The top performer is Hong Kong's Hang Seng with a 4.65% gain and in second is our own S&P 500 with a gain of 2.89%. In third is Shanghai's SSE with a gain of 2.86%. Coming in last is India's BSE SENSEX with a minor loss of 0.11%.

 

Every Rose Has its Thorn: Healthy Rally, but Risks Linger

At a recent client event I was asked about our ongoing view that volatility would remain elevated—specifically, whether the rally off the December 2018 low in U.S. stocks was an indication that our view might be wrong.

Retests, Recessions, and Rallies

Recently, much has been written, and said, about a retest. The reference is about the major indices pulling back to their recent December closing lows, creating a double-bottom in the charts.

US Equities: Could 2018 Pain Become 2019 Gain?

With US stocks facing multiple risks, it’s easy to lose sight of the positive trends that could help the market recover. In 2019, investors should search for select stocks with the right attributes to produce positive surprises in a potentially tricky market environment.

US/China Trade Conflict Creates Factor Opportunities

Low Volatility and Quality offer potential benefits in stressed markets.