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Market Outlooks
AAM Viewpoints: The Great Battle Ahead: Negative Interest Rates and Historic Debt Issuance
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Prepare for the Unstoppable Force and the Immovable Object to battle it out over the next few years. While the equity markets continue to befuddle fundamentalists as to their strength considering the historically poor economic and earning metrics, the credit markets are providing some interesting components to the potential recovery’s shape.
Market Outlooks
AAM Viewpoints: Biotechnology: An Enduring Growth Theme
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Traditional technology may enhance our lifestyles, but biotechnology could directly impact our quality of life.
Macroeconomic & Geopolitical
Creative Destruction
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Economist Joseph Schumpeter coined the phrase “creative destruction” to describe the way innovation in the manufacturing process increases productivity while destroying the old way of doing things as a new efficient way is developed.
Market Outlooks
Weekly Wire: When it rains
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Most of the focus on COVID-19 has understandably been on its physical impact, but the psychological impact of a pandemic is also worth considering. Social interaction is a huge source of psychological wellbeing, and its loss, paired with concerns about the market, as well as the health and wellbeing of loved ones, can begin to take a psychological toll.
Market Outlooks
AAM Viewpoints: Humans Fear the Virus. Markets Fear the Panic.
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It seems daily, if not hourly, the global panic surrounding the COVID-19 virus is spiking. Fear has gripped our world and has seemingly taken over. The virus is not the problem, the fear of the virus is the problem. This is a classic case of perception becoming reality.
Market Outlooks
AAM Viewpoints: Are Bonds Smarter Than Stocks?
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Prior to the outbreak of the coronavirus, the domestic economy appeared to be on solid footing with reasonable growth prospects and no inflation in sight (as measured by the Fed). Since that time, economic impacts regarding the spread of the virus have taken center stage as interruptions to supply chains and global travel have been felt to varying degrees around the globe.
Market Outlooks
Weekly Wire: The Fed lowers, Biden rises…Now what?
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Market volatility continued through the last week due to ongoing concerns surrounding the spread of COVID19, the shifting Democratic presidential candidate landscape, and their combined economic impact. We’ve experienced wild daily moves in the S&P 500 Index (S&P 500), but as of Wednesday’s close, we’re just 7.5% below the all-time high reached on February 19.
Market Outlooks
AAM Viewpoints: The Sky is Falling! The Sky is Falling!
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Ok, maybe not (yet), but falling acorns in the form of the coronavirus and recent data showing decelerating U.S. business activity has many rethinking their asset allocation – especially income seeking investors.
Market Outlooks
Continuing concerns regarding COVID-19
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The global equity markets have continued their decline, which began on February 20, in response to fears over the COVID-19 (coronavirus) becoming a global pandemic. The S&P 500 Index fell -12.0% from February 20-27 and is on pace for another decline on February 28. International equity markets have fared better, with the MSCI EAFE and MSCI Emerging Markets indices declining -7.4% and -6.6%, respectively. The last six days has been the fastest correction (10% drawdown) on record for the S&P 500 off an all-time high, which has likely exacerbated market fears. With the drawdown, the markets are pricing in significant earnings declines as a result of the virus, and certainly weaker global economic activity.
Market Outlooks
AAM Viewpoints: Small Business Optimism Posts a Third Year of Strong Readings
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Over the past few years I’ve written about trends in small businesses based on the National Federation of Independent Business (NFIB) Survey of Small Business Economic Trends. I follow these trends because I come from a family with multiple generations of small business owners and small companies in the United States create about two-thirds of net new jobs, drive innovation and account for 44% of U.S. economic activity.
Market Outlooks
AAM Viewpoints: Coronavirus and Domestic Credit
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The last recession was the sub-prime mortgage crisis, before that the dot.com bubble aggravated by the 9/11 terrorist attacks, and before that it was the Savings & Loan crisis. In these past recessions there were, at the time, issues not generally foreseen, but when they broke it opened fissures in the economy that ultimately led to a recession.
Market Outlooks
AAM Viewpoints: Is Recent Bond Market Volatility About More Than Easing Coronavirus Fears?
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As fear gives way to resolve and markets assess the potential economic impact of the coronavirus, a risk on mentality has taken hold with global equity markets taking back losses and global bond markets selling off in concert. While these fears are sometimes a bit irrational, the Center for Disease Control and Prevention estimates 12,000-61,000 Americans have died from influenza since 2010, there is no doubt we can all understand the underlying fear.