Investment Outlook

 

Economic Outlook Highlights

December 2017     |  Economic Outlook Highlights   (PDF/New Window)
December 2017    |  Economic Outlook Highlights  (PDF/New Window) December 2017 | Economic Outlook Highlights
Tax cuts increase the chances of economic growth next year in the 2.5%-3.0% range from 2017’s estimated 2.3% rate. Support will depend, in part, on the ripple effects of fiscal stimulus throughout the economy. Sustaining broad-based strength behind a “mini”-burst of activity will depend partly on the economy’s ability to overcome a recent squeeze on household “purchasing power” and late-cycle limits to “pent-up” demand, and to reinforce an investment recovery driven more by sales growth and capacity pressures than by the after-tax return on investment.
View an archive of Economic Outlook Highlights, brief summaries of the economic and financial market outlook along with issues affecting stocks and bonds.


Briefings and Commentaries

February 9, 2018 – Market Comment (PDF/New Window)
February 9, 2018 | Market Comment (PDF/New Window) February 9, 2018 | Market Comment
Wringing out, or ringing out? Stocks were decked a second time in as many weeks in a no-contest tug of war between inflation worries and rising bond yields versus an upbeat economic and earnings growth outlook. The S&P 500 Index’s steepest decline in over two years was broad and deep across all eleven S&P 500 sectors and all but seven of the benchmark’s 125 industry groups. An unsurprising pop in VIX volatility, to double its long-term norm on the week, was the tip of an iceberg containing massive losses on bets against volatility that have become the poster child for the week’s sell-off in stocks. Bonds were caught in their own tug of war between debilitating increases in inflation expectations plus deficit-related supply concerns versus safe-haven demand for government securities. Safe-haven support wasn’t enough to prevent three weak auctions last week of government notes and bonds further undercutting the market. Foreign demand for U.S. securities at times may have reversed the usual cause-and-effect relationship between the dollar and U.S. interest rates during currency swings contributing to opposing moves with interest rates rather than the usual parallel changes. Widening quality spreads in corporates, lifting the yield premium on non-investment over investment grade securities to a one-year high, still left the benchmark with a loss just a fraction of the 5.2% S&P 500 decline.
View an archive of briefings and commentaries that provide detailed analyses of the current economic climate and investment conditions.

Gary Schlossberg

Senior Economist

Gary SchlossbergAs senior economist, Gary Schlossberg is responsible for assessing the economic environment and providing input to the equity and fixed-income portfolio management teams at Wells Capital Management.

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