sankai By Brian Angerame, Jeffrey Bailin, CFA, Aram Green & Matthew Lilling, CFA SMID Playing Catch Up in Growth Rally Market Overview Equity markets rallied in the first quarter as resilient corporate earnings, continued enthusiasm over artificial intelligence (‘AI’) and the prospect of interest rate cuts spurred performance that surprised even the most optimistic investors….
FeelPic By Grace Su & Jean Yu, CFA, PhD Improvers Outpace Broader Value Gains Market Overview Global markets generated positive returns in the first quarter driven by optimism over an economic soft landing, improving economic data, the prospect of rate cuts in the U.S. and Europe and structural economic and corporate reforms in Japan. The…
Michael H/DigitalVision via Getty Images By Charles Hamieh, Shane Hurst, Nick Langley, & Simon Ong Reshoring and Data Centers Support Select Utilities Market Overview Infrastructure assets trailed global equities in the first quarter amid a robust rally for equities, in many ways a continuation of the bull market begun in late 2023 as softening inflation…
MarekUsz/iStock via Getty Images By Albert Grosman & Brian Lund, CFA Picking the Right Odds, Not the Right Horse Market Overview Spotting a secular trend and identifying the winners, as many small cap investors are trying to do with AI- and bitcoin-related beneficiaries, is a time-honored investment strategy that has made investors a lot of…
Rasi Bhadramani By Reed Cassady, CFA, Albert Grosman & Sam Peters, CFA AI Solutions Require Solving Power Problems Market Update The market is focused on the transformative potential of artificial intelligence (‘AI’) but, in our view, has not come fully to grips with the real-world bottlenecks attached to this emerging technology. While markets appear to…
think4photop By Michael Clarfeld, CFA & Chris Eades Cyclical Kick Helps Midstream Lead Equities Market Overview and Outlook A boost for cyclical sectors amid rising oil prices helped energy infrastructure stocks outperform equities in the first quarter. Winter storms dampening production across several U.S. oil fields, a weaker U.S. dollar and lower production levels by…
Jordan Feeg By Garey J. Aitken, CFA, & Michael Richmond, CFA Upgrading Portfolio Quality into Strength – Market Overview After nearly two years of managing through steadily higher policy rates and regular prognostications of economic troubles, investors clearly expected 2024 to be a transition year. Rather than a change, the first quarter of 2024 looked…
Donny DBM/iStock via Getty Images By Reed Cassady, CFA, Sam Peters, CFA, & Jean Yu, CFA The Internal Engine of Returns Market Overview We have previously written about how a lifetime of being a pilot can influence how one approaches portfolio management. The basic principle of flying is to generate lift, while the basic principle…
Trevor Williams By Scott Glasser | Michael Kagan | Stephen Rigo, CFA Paths to Outperformance Broaden Beyond Tech Market Overview The soft landing rally that took hold in November 2023 continued in 2024’s first quarter. The S&P 500 Index advanced in each month of the quarter, bringing the benchmark’s winning streak to five consecutive months…
Hiraman By Jeffrey Bailin, CFA & Aram Green Benchmark Concentration Even More Severe in Small Growth Market Overview Entering 2024, we were hopeful that, after a year of extreme relative underperformance versus large cap peers, conditions were aligning for a broadening market more favorable for small cap stocks. Thus far, it has been more of…
Pogonici By Peter Bourbeau & Margaret Vitrano Staying Disciplined in a Broadening Market Market Overview The positive momentum of 2023 extended into the first quarter as a likely economic soft landing and being past the peak of monetary tightening sent stocks broadly higher. The S&P 500 Index (SP500, SPX) advanced 10.56% for its best start…
Jinda Noipho/iStock via Getty Images By Garey J. Aitken, CFA, & Timothy W. Caulfield, CFA Market Overview The S&P/TSX Composite Total Return Index returned 8.1% in the fourth quarter. Benchmark 10-year interest rates in Canada and the U.S. reached 2023 highs of 4.24% and 4.99%, respectively, in October before ultimately giving way in the final…
krisanapong detraphiphat/Moment via Getty Images By Brian Angerame, Jeffrey Bailin, CFA, Aram Green & Matthew Lilling, CFA Small and Mid Caps Attractive Amid Rate Transition Market Overview and Outlook Equity markets generated strong returns in the fourth quarter, bolstered by declining bond yields and a resurgence of optimism that the U.S. economy could indeed achieve…
SEAN GLADWELL/Moment via Getty Images By Reed Cassady, CFA, Albert Grosman, Sam Peters, CFA Deeper Dive on Soft Landing Reveals Risks Market Update What an ending to the year for U.S. equities. The market has become increasingly convinced of a soft landing and inflation is easing toward the Federal Reserve’s target range across total, core…
ismagilov By Charles Hamieh, Shane Hurst, Nick Langley, & Simon Ong Rate Shift Lifts Utilities and GDP-Linked Infrastructure Market Overview Infrastructure and equity markets rallied into the end of the year, driven by a precipitous decline in interest rates as sustained disinflationary trends created an expectation that not only is the Fed finished raising rates,…
Jira Pliankharom By Brian Angerame, Jeffrey Bailin, CFA, Aram Green, Matthew Lilling, CFA Growth Stocks Rise on Rate Cut Prospects Market Overview Equity markets generated strong returns in the fourth quarter, bolstered by declining bond yields and a resurgence of optimism that the U.S. economy could indeed achieve a soft landing. This helped to further…
Edwin Tan By Hannah Barr, Senior ESG Associate| Naveen Jayasundaram, Sr. Analyst – Media & Internet | Mary Jane McQuillen, Head of ESG, Portfolio Mgr. | Hannah Whang, Senior Analyst – Industrials Measuring Impactful Company Engagements An Enhanced Internal Engagement Initiative Engagement to drive positive change in public equities has been a longstanding part of…
tdub303 By Daniel Chu, CFA, Charles Hamieh, Shane Hurst, & Nick Langley Rate Pressures Ease for Renewables, Communications Market Overview Infrastructure and equity markets rallied into the end of the year, driven by a precipitous decline in interest rates as sustained disinflationary trends created an expectation that not only is the Fed finished raising rates,…
Jira Pliankharom By Sean Bogda, CFA, Grace Su, & Jean Yu, CFA, PhD Value Lags Broader International Rally Market Overview International markets generated positive returns in the fourth quarter, as disinflationary data, renewed hopes of an economic soft landing and declining bond yields in the U.S. and Europe overcame concerns over renewed hostilities in the…
Nastco By Albert Grosman and Brian Lund, CFA Keeping Disciplined Amid Low-Quality Rally Market Overview Once upon a time, financial market prices were somewhat tethered to fundamental value. Sure, there were occasional bubbles or manias here or there, in tulips or regional shipping companies or internet stocks, but those were generally isolated to individual asset…
Lemon_tm By Elisa Mazen, Michael Testorf, CFA, & Pawel Wroblewski, CFA Conditions Improving for Growth Comeback Market Overview International equities rebounded in the fourth quarter, sparked by moderating inflation and plunging bond yields in the U.S. and Europe. The benchmark MSCI EAFE Index advanced 10.42% for the quarter, while the MSCI Emerging Markets Index added…
KanawatTH By Evan Bauman, Peter Bourbeau, Aram Green, & Margaret Vitrano Europe Holding its Own Through Headwinds Market Overview International equities rebounded in the fourth quarter, sparked by moderating inflation and plunging bond yields in the U.S. and Europe. The benchmark MSCI EAFE Index advanced 10.42% for the quarter, while the MSCI Emerging Markets Index…
Galeanu Mihai By Jeffrey Schulze, CFA The Long View: Here Comes the Sun? Will the Consensus Be Wrong Again? The changing of the calendar affords a natural time to reflect on the previous year and imagine what could be different in the new one. Recent years have ended up differing substantially from consensus expectations. For…
DKosig By Brian Angerame, Aram Green, Matthew Lilling, CFA, & Jeffrey Russell, CFA Amid Growth Pressures, Mid Caps Deliver results. Market Overview Equity markets proved challenging during the third quarter, as the potential for higher-for-longer interest rates chipped away at valuations and raised questions about an economic soft landing. As a result, value stocks supplanted…
metamorworks By Charles Hamieh, Shane Hurst, Nick Langley, & Simon Ong Utilities Fundamentals Intact as Market Risks Rise Market Overview General equities as well as infrastructure retreated in the third quarter of 2023 as inflation, while it has fallen, is still above central banks’ targets, and recent rises in energy prices make it difficult for…
style-photography/iStock via Getty Images By Brian Angerame, Aram Green, Matthew Lilling, CFA, & Jeffrey Russell, CFA Market Overview and Outlook The third quarter was marked by elevated macro influences on portfolio performance. While short-term risk-free rates inched higher, the 10-year U.S. Treasury yield increased 74 basis points, a notable headwind for SMID growth stocks. The…
Boonyachoat/iStock via Getty Images By Scott Glasser, Michael Kagan, & Stephen Rigo Seeking Nature-Positive Revenue Opportunities Market Overview Despite a strong start in July, the S&P 500 Index (SP500, SPX) finished the third quarter down 3.3% as momentum fizzled in August and September. The most likely explanation for the drop was the relentless increase in…
Phiromya Intawongpan By John Baldi, Michael Clarfeld, Peter Vanderlee Dialing Up Valuation Discipline and Dividend Growth Market Overview After a robust second quarter, fueled by tremendous enthusiasm around AI, the S&P 500 Index receded in the third quarter as investors finally accepted that interest rates were likely to be higher for longer. The index fell…
utah778 By Peter Bourbeau and Margaret Vitrano Moving to the Middle as Growth Slows Market Overview Equities took a breather in the third quarter, pressured by rising bond yields, a hawkish turn by the Federal Reserve, and signs of late cycle spending fatigue. The S&P 500 Index fell 3.27% while the Nasdaq Composite declined 4.10%…
Nikada By Albert Grosman & Brian Lund Investor Optimism Masks Risks of Higher Rates Market Overview Whatever happened to “Don’t fight the Fed?” U.S. equity markets rose across the board in the second quarter, with the Russell 2000 Index up 5.21%, the Russell 1000 Index up 8.58% and the tech-heavy NASDAQ Composite up over 13%….
da-kuk By Sam Peters & Jean Yu The Gift of Extremes Market Overview One of the most powerful tools we have as investors is to think probabilistically rather than act emotionally. We use probability to adapt to new information when our beliefs are challenged, typically in the form of a surprise, and to exploit extreme…
sitox By Evan Bauman, Peter Bourbeau, Aram Green, & Margaret Vitrano Truing Up Growth Exposures on Weakness Market Overview Growth stocks remained in favor in the second quarter, with enthusiasm over generative AI extending gains for mega cap companies in a historically narrow market. The S&P 500 Index rose 8.74% and the Nasdaq Composite climbed…
MadamLead By Michael Clarfeld & Chris Eades Midstream Set to Benefit from Oil Demand Growth Market Overview and Outlook Growing expectations of a Fed pivot and soft landing in 2023 remained the dominant theme in the second quarter, helping U.S. equities, as well as midstream energy stocks, continue to make healthy gains. The benchmark Alerian…