4 “What If” Market Scenarios for 2020

In my weekly columns, I frequently point out that widely-known information does not have much pricing power in the equity markets. If you read a story in the newspaper or hear it on the news, you can rest assured that this information is not very valuable to future price movements. It’s already baked into stock […]

The Biggest Risk for Long-Term Investment Returns

There are always risks in the equity markets. To many readers, it may feel like risks are currently high and on the rise. But of all the risks that are increasingly grabbing people’s attention today – the trade war, impeachment, recession, etc. – none of them are actually the biggest risk to long-term investor returns, […]

Reacting to “Doom and Gloom” Stock Forecasts May Cost You

Investing in the equity markets means confronting a constant barrage of economic, political, and financial information – with most of it tilting to the negative. Then there are times when prominent commentators up the ante and start to talk of “Armageddon” scenarios, forecasting economic ruin and using phrases like “the death of equities.” Many investors, […]

Investors Shifting Away from Defensive Stocks

A few weeks ago, I wrote in a Mitch on the Markets column that I’d been observing a notable rotation in the equity markets. I saw a significant shift away from cyclical sectors and towards defensive sectors. I noted in the column that in Q3 2019, the traditionally defensive Utilities and Consumer Staples sectors had […]

3 Reasons the Market Will End the Year Strong

Many readers remember the sudden and sharp S&P 500 declines around this time last year. 2018’s fourth quarter was harsh, to say the least. From the S&P 500’s highs in early October through Christmas Eve, the index dipped into bear market territory with a near perfect -20% decline.1 Technical market watchers would rightfully label this […]

Yield Curve is No Longer Inverted – Does Anyone Care?

Two months ago, the yield curve ‘inversion’ was one of the most cited data points for recession worries. And for good reason – sustained yield curve inversions have preceded nearly every recession in the post-World War II era. Considering that pockets of U.S. macroeconomic data were showing weakness around the same time as the inversion, […]

City Revenues are Slowing—Another Recession Signal?

A report this week from the National League of Cities caught my attention. In it, 63% of finance officers from major U.S. cities predicted a recession as soon as 2020.1 A perfect storm of falling city revenues, rising expenditures, softening business investment, and a housing market that feels like it’s plateauing. The question is – […]

Are Corporate Earnings in Recession?

With all the recent talk on weak manufacturing numbers, endless trade wars, and the impeachment inquiry, few commentators have pointed out that we may be in the midst of a technical earnings recession. And given the high value we place on corporate earnings here at Zacks Investment Management, this is a factor we’re most certainly […]

Are Investors Pricing in Too Much Recession Risk?

October kicked off with some weak economic reports. The Institute for Supply Management released manufacturing data showing that U.S. factory activity continued its slump, with the manufacturing index falling to its lowest level (47.8) since June 2009. Global manufacturing activity also remained firmly in negative territory in September, posting its fifth consecutive month of contraction. […]

Signs Point to Volatile Markets, but Not Yet to Recession

The U.S. and global equity markets got shaken up a bit last week, with weak manufacturing numbers in the U.S. and globally indicating pronounced slowdowns in factory activity, employment, and trade. The manufacturing sector is very globally interconnected, with very few sophisticated products being assembled in a single country, so the synchronized slowdown comes as […]