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Explore: Rising Interest Rates & the Market

Rising Interest Rates & the Market

Interest

Today’s relatively sharp market sell-off is generating a lot of discussion around the impact of rising interest rates on financial markets. Although there are legitimate concerns that the Federal Reserve’s interest rate increases could reduce demand for relatively riskier asset classes like stocks and slow the economy more than expected, it is our view that these concerns are outweighed by other, more positive factors. Our outlook is rooted in the continuing underlying corporate and economic strength domestically, as well as a longer-term contextual view of why interest rates are rising in the first place.

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Beware the Bears

Beware the Bears

If you’ve been paying attention to the financial news lately, you’re probably seeing a lot of ominous predictions—and they’re usually backed up by some ominous headline.  The most simplistic are saying that the bull market has now lasted ten years, so therefore it’s about to come to an end—as if bull markets come with a time limit.  Others, equally simplistic, are saying that the market has reached a new high, and, well, don’t markets fall from their all-time highs?  This ignores the fact that more than 70% of the time, a new high is followed by another new high—and ultimately, so far in history, every new high has eventually been surpassed by the next one.

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Turkey Contagion? Not So Fast…

Turkey Contagion? Not So Fast...

Front and center in the news lately is the concern over Turkey’s currency crisis, with the country’s lira falling against the dollar by as much as 20% in one day.  Last week’s downfall was led in part by President Trump’s doubling of tariffs on imported Turkish steel and aluminum along with continued heated rhetoric over an American pastor being held in the country.  Couple this with Turkey’s authoritarian president, Recep Tayyip Erdogan, and his brash tone toward international and domestic policies, and you can see the idiosyncratic factors that sent the lira tumbling.

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What to Make of the “Trade War”

Trade War

Last week, there was finally some evidence that the investment markets were starting to get jittery about the escalating tit-for-tat tariffs and threats of tariffs that some economists are calling “America vs. the World.”  Most investors are probably wondering whether new taxes on items flowing into and out of the U.S. really is something to worry about.

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Much Ado About…

Tariff

You may have heard about the “Trump Tariffs;” that is, the proposed 25% surtax on all steel imports coming into the U.S. from foreign manufacturers, and a similar 10% surtax on aluminum. The markets certainly noticed; they fell dramatically after the announcement, as investors feared that the move would spark a global trade war.

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What Will the Fed’s Balance Sheet Reduction Mean for Markets?

At its September meeting, the Federal Reserve announced that it would begin the process of winding down its balance sheet.  While the central bank is taking caution to chart a slow and gradual course, it marks a significant step in its plans to back away from quantitative easing and is likely to reverberate throughout financial markets as the unwinding progresses.

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Foreign Investors Flock to U.S. Municipal Bonds

Bonds

Municipal bonds (or munis) issued by state and local governments have long been favored by tax-conscious American investors. These securities provide the unique benefit of tax-free income, allowing investors to shield a portion of their nest egg from federal and most state and local taxes and boost their so-called tax-equivalent yield. As a result, these bonds, which help fund approximately three quarters of America’s infrastructure projects, are particularly attractive to Americans in higher tax brackets. Continue reading “Foreign Investors Flock to U.S. Municipal Bonds”

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The Growing Skills Gap and What to Do About it

The Growing Skills Gap

As the American economy enters its eighth year of post-recession growth, the unemployment rate continues to fall.  In fact, May’s reported unemployment rate of 4.3% is the lowest in sixteen years, marking just how far we’ve come since a high-point of 10.0% in October 2009.  Unfortunately, anecdotal evidence from workers and employers and a deeper dive into labor statistics indicate that, despite these improvements, structural issues remain.  While concerns such as underemployment and reduced participation in the labor force remain problematic, perhaps the biggest issue for American jobseekers and businesses today is a growing gap between the skills companies seek and the abilities of the workforce.  Known as the ‘skills gap,’ this asymmetry can have a damaging ripple effect that weighs on everything from individuals’ opportunities for employment to overall economic productivity.

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Renters Under Pressure Globally

Renters

Attempting to make comparisons between the structures of countries’ housing markets is a difficult task. Numerous elements must be considered, such as geography, government policies, and demographics, while analysis can be further complicated by an overall shortage of comparable data throughout various countries. Continue reading “Renters Under Pressure Globally”

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