Last month showed vividly that sentiment can shift rapidly even when fundamentals stay solid; the heightened focus on the Fed and inflation is likely to persist, although we expect the impact of upcoming increases to be primarily on short-term rates.
Uncertainty is a fierce opponent, whether you're picking players or securities. Investors, however, can learn valuable lessons from how football teams approach their annual drafts to help build stronger, more durable portfolios.
Dovish policies under former Fed Chair Yellen have helped restore growth and inflation; however, there's reason for investors to expect a more hawkish tilt under new Fed Chairman Powell.
Going into July, leading indicators and relative valuations lead multi-asset strategist Doug Sue to see greater potential for stocks than bonds this month.
Chart of the Week
Source: Bloomberg, October 12, 2018. *Forward P/E values are based on Bloomberg Estimates Earnings Per Share. Past performance is no guarantee of future results. Indexes are unmanaged, and not available for direct investment. Index returns do not include fees or sales charges. This information is provided for illustrative purposes only and does not reflect the performance of an actual investment.
Chart of the Week
Last week's markets left investors looking to economics for clues; Italy faced up to the EU; China's trade surplus ballooned
Emerging markets stocks
It's important for investors to consider the inherent concentration risks that may be embedded in their equity portfolios -- including their emerging markets allocation.
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