Recent equity market volatility is being partially attributed to potential Fed tightening, as the Fed has signaled a shift from an accommodative monetary policy stance to one that is more restrictive. It is doing so in response to the recent hot inflation reads and a rebound in inflation expectations. In general, equities are considered a hedge against inflation. Why, then, are equity investors so concerned? The reason is that not all equity sectors are created alike. Specifically, some can combat inflation and subsequent interest rate increases better than others.
Commonwealth
What Does the Ukraine Invasion Mean for Investors’ Portfolios?
The next phase in the Ukraine crisis has begun, as Russia has launched attacks on Ukraine. With a war underway, it’s unsurprising that the markets are reacting. Before the market opened, U.S. stock futures were down between 2 1/2 percent and 3 1/2 percent, while gold was up by roughly the same amount. The yield on 10-Year U.S. Treasury securities has dropped sharply. International markets were down even more than the U.S. markets, as investors fled to the more comfortable haven of U.S. securities.
What Does the Russia-Ukraine Crisis Mean for Investors?
I have been holding off on commenting on the Russia-Ukraine conflict until some sort of resolution occurred. Lots of things could have happened, and we could drive ourselves crazy worrying about the possibilities. But now something has happened, and it is time to take a look.
Monday Update: Omicron Economic Impact Less Than Feared
Last week was full of important economic updates, many of which showed that the economic impact from the Omicron variant was relatively muted compared to earlier waves of the pandemic. The January retail sales report was a highlight, as sales growth experienced its best month since last March. This will be a quieter week for reports, with only three major releases scheduled that will provide updates on consumer confidence, personal income and spending, and durable goods orders.
More Stock Market Turbulence: Could It Get Worse?
Yesterday was another bad one for the market, with the S&P 500 down more than 2 percent. The S&P as a whole is now down more than 8 percent from the peak, with the Dow down about 5 percent, and the Nasdaq down more than 13 percent as of this writing. What is going on—and will it get worse?
Investor Expectations Vs. Reality
This will be a quick post, as I am finishing up a Commonwealth conference. As usual, it has been a wonderful chance to see old friends, make new ones, and have a great time in a beautiful place. It was as I expected, given the great people—and even better meeting planners—who make Commonwealth so special. In this case, at least, my expectations were well-founded and have been fully met. But today I want to talk about expectations in a more general way.