Recession indicators update
Our Recession Risk Dashboard still signals economic expansion, but faster wage growth has moved that indicator from green to yellow, due to potential pressure on corporate margins.
Our Recession Risk Dashboard continues to signal that the likelihood of a pullback in the next 12 months is low -- a view supported by recent data on the volume of freight shipped via trucks.
International stocks are gaining traction with investors -- but passive strategies may not be the best guide to opportunity. ClearBridge's Eliza Mazen explains why an active approach to diversifying international growth stocks may make more sense.
Trump’s antagonistic approach to redefining U.S. trade relationships is creating challenges now, but could eventually lead to a “trade peace” that expands global commerce.
Fears that drug pricing will collapse have pushed many investors away from this sector, yet we see drug spending becoming less, not more, of an issue going forward: given current valuation levels, the potential for stronger returns is very real.
Chart of the Week
Chart courtesy of Clarion Partners. * Source: CBRE-EA, Clarion Partners Investment Research, Q3 2018, latest available figures. Past performance is no guarantee of future results. This information is provided for illustrative purposes only and does not reflect the performance of an actual investment.
Chart of the Week
U.S. consumers had a downbeat December; China-U.S. trade talks were set to reconvene in Washington; Mexico's Pemex got yet more help; U.K. clothiers discounted deeply, pre-Brexit
The current environment is similar to several previous periods where market weakness and substantial P/E compression occurred against a backdrop of economic and earnings strength. Historically, these periods have been followed by solid stock rebounds.
A narrowing of the advantages recently enjoyed by U.S. companies could reverse the international stock performance gap.
Should we worry about the recent inversion of 3-5 year Treasury yield curve? The ClearBridge Recession Risk Dashboard suggests concerns may be overblown.
With control of the Senate and House now divided, and the prospects for a recession still muted, the S&P 500 should continue to march higher in 2019 -- with areas of potential opportunity for active managers in specific sectors.
As monetary policy normalizes and the economic cycle matures, volatile days like those just experienced may become more common. However, the end of the cycle appears to remain in the distant future, allowing investors to find opportunity amid market anxiety.
Anatomy of a Recession:
ClearBridge's Recession Risk Dashboard continues to point to healthy backdrop for the U.S. economy and further continuation of an already record-setting expansion, with equity markets benefiting from buybacks and other shareholder-friendly moves through the coming quarter.
The electric vehicle (EV) market continues to expand, and with it, opportunities for investors – not only in auto manufacturing, but also in the parts, materials and adjacent industries.
Economic conditions are shifting, but the ClearBridge Recession Risk Dashboard still points to expansion rather than recession.
Concerns about economic growth and geopolitical risks have weighed on international markets, but a softening of U.S.-China trade rhetoric and weakening dollar could spark a new wave of outperformance.
Water conservation and stewardship initiatives are helping companies from manufacturing to consumer goods to gain competitive advantages and manage future risks.
The contrast between current economic momentum and monetary policy in the U.S. versus the rest of the world has led to lower valuations in international and emerging markets (EM) stocks -- but a change could be coming soon.
Though trade war tensions could sidetrack investors, history suggests markets should rally after midterm elections -- with recession risks low going into Trump's third year in office.
The green light just given to the AT&T/Time Warner merger underscores the changing dynamics at work in the rapidly consolidating media sector.
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