When investors have been looking to allocate funds within the U.S. fixed income markets, credit has seemingly been viewed as being perhaps too “rich,” or expensive, in relative terms.
All of the attention when it comes to future Fed monetary policy decisions has been laser-focused on rate cuts. We would have to concur, and rightfully so. However, that doesn’t mean investors should take their eyes off the ball and not consider the Fed’s balance sheet.
This past week brought promising news for the markets and the broader economy. Inflation data came in at or below expectations, while economic indicators, including housing starts and retail sales, demonstrated surprising resilience.
In 2025, two titans of technology stand at the forefront of innovation: quantum computing and robotics. Each offers a vision of a future transformed, where the impossible becomes achievable and industries are redefined.
At CES 2025, Jensen Huang, CEO of NVIDIA, offered a compelling vision of AI’s future—one that combines bold technological advances with practical applications.
As we kick off 2025, the economic landscape showcased a strong economy and resilient job market even as higher interest rates weigh on market sentiment. This week’s data underscore the delicate interplay between inflation expectations, real growth, and the Federal Reserve’s policy stance.
As we enter 2025, there has been a lot of conjecture about a return to the 5% threshold.
While the market has largely moved past that year’s recession debate, it’s worth noting that the traditional definition that persisted for all our careers—two consecutive quarters of negative GDP growth—did occur in the first half of 2022.
The new year begins with economic resilience, but investors should brace for a challenging path in 2025. Key economic indicators are still “goldilocks” and signal continued growth at a sustainable pace.
Eden Ovadia, CEO of FINNY, joined WisdomTree’s Office Hours to share actionable growth insights for advisors.
The AI market has evolved significantly in the past two years, shifting from a heavy reliance on mega-cap and semiconductor dominance to a more diverse set of beneficiaries.
Last week’s market volatility was not surprising for readers of these commentaries, as I anticipated a jarring adjustment to readouts from the Fed Dot Plot that suggested less rate cuts in 2025.
For 2025, the financial markets will be entering a new chapter in the ever-evolving policy story. Indeed, not only will the U.S. economy be operating under a new political and attendant fiscal backdrop, but it will also be in the midst of a different monetary policy setting—rate cuts, not the after-effects of rate hikes.
As expected, the Fed delivered a 25-basis point rate cut at the December FOMC meeting, but what comes next is far from clear. Kevin Flanagan explains why future rate moves depend on shifting economic signals and why the Fed’s definition of “neutral” may be evolving.
Last week’s market narrative was defined by yet another extraordinary surge in tech stocks, inflation developments generally aligning with expectations, and anticipation of the upcoming Federal Reserve meeting.
Last week we processed robust economic data and growing clarity on Federal Reserve policy, instilling a consensus view for a strong market that is now well reflected in positioning.
A couple of weeks ago, we wrote about how the deficit had come back into focus for the U.S. financial markets.
The WisdomTree BioRevolution Fund (WDNA) is showing signs of recovery, reflecting renewed investor confidence in biotechnology innovation.
This week’s data and market momentum solidified the case for a resilient U.S. economy, defying concerns of an imminent slowdown. Initial jobless claims dropped to a five-month low, reinforcing the strength of the labor market, while GDP growth projections hover around an impressive 2.5%.
To judge by the action in some foreign markets, Donald Trump’s election is pricing in economic winter.
Last week showcased the complexities driving markets and the economy, with inflation data, Federal Reserve commentary, and political developments at the forefront. While inflation metrics in the CPI came in as expected, the PPI surprised on the higher side, pushing up estimates for the Fed's preferred PCE inflation gauge.
The macroeconomic overview presents ambiguity. In the face of U.S. elections, falling rates, and a host of trends that could shape the market, investors need to find a smart approach.
Last week’s developments mark one of the most pivotal weeks in recent memory.
Following the September FOMC meeting’s much ballyhooed 50-basis point (bps) rate cut, the voting members scaled back and reduced the Fed Funds by 25 bps this time around.
While the primary focus for the financial markets has been on the continued resilient U.S. economy and what the current Fed rate cut cycle will ultimately look like, there has been another topic that has been making the rounds in the bond arena: the budget deficit.
Last week's jobs report hit a "sweet spot" for the markets, confirming enough economic cooling to signal potential Fed rate cuts without yet sparking fears of a recession. I expect a 25-basis-point cut from the Fed this week and Powell may set us up for a data-dependent pause in December.
Here we are, another calendar quarter down with one more to go in 2024, and investors have yet to see a “hard landing” emerge.
This week’s economic indicators continue to reflect a resilient U.S. economy despite the ongoing pressure from higher interest rates. Jobless claims dropped to 227,000, indicating a steady labor market. Durable goods orders came in strong, aligning with estimates, and GDP growth for Q3 is expected to come in between 3% and 3.25%, a robust figure by most standards.
The U.S. election outcome is anyone’s guess, so let’s try to game out the winners and losers from the candidates’ major policy proposals.
The latest economic data reveals a resilient economy, led by strong retail sales and a surprising drop in jobless claims. Despite some weakness in manufacturing, industrial production, and housing, overall economic strength is reflected in the projected third-quarter real GDP growth, expected to come in at a robust 3%—largely driven by productivity gains. This productivity led rebound is very positive and this confirms that despite tighter monetary conditions, the real economy remains strong.
This past week saw a notable surge in the stock market, pushing it to all-time highs, despite mixed economic data. Inflation figures, jobless claims, and sentiment reports have been uneven, but markets remain resilient, with the VIX hovering around 20—a sign that fear persists among investors.
Exchange-traded funds (ETFs) have grown in popularity as one of the most flexible and accessible investment vehicles available today. Offering a blend of stock-like liquidity and mutual fund-like diversification, ETFs can serve as a core component in the portfolios of both novice and experienced investors
The Fed’s “recalibration” of monetary policy is more than just about shifting to rate cuts. It also involves where the policy maker is now placing its greater emphasis on setting the course for easing in the future. Rather than inflation being the primary driver in the decision-making process, labor market activity has now taken center stage, and with that, one could argue, for the Fed, it’s now about the economy.
The jobs report closed last week with robust read outs of an official number that beat economist expectations. Below the surface, however, hours worked fell to levels often associated with recessions. This juxtaposition of more workers clocking fewer hours suggests that while employment figures are up, the quantity of work didn’t expand much.
Over the past several years, high-yield bonds have delivered impressive returns, outperforming most other sectors of the fixed income market.
The M2 money supply growth rate in the U.S. accelerated, marking the first time the monthly change exceeded a 5% annualized rate after several months of more moderate increases. A 5% money supply growth is a desirable target, as it reflects 2-3% growth in the economy with 2% inflation. Thus, the uptick in money growth is reassuring and supports the possibility that we will avert a hard landing for the economy.
While agency mortgage-backed securities offer compelling valuations, not every mortgage is created equally.
In the span of a few days in late July, the market got live to two contrasting theories at once: that U.S. inflation is collapsing while Japanese inflation will remain stubbornly high.
I was pleasantly surprised by the Federal Reserve (Fed) decision to begin the easing cycle with a 50-basis point (bp) cut as the real economic data came in relatively stronger than expected.
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Corporate tax rate policy is a routine hot-button issue during every presidential election cycle, and this year’s campaign is no different.
After much anticipation, the Fed finally delivered a rate cut at the September FOMC meeting. The amount had been the subject of a great deal of speculation of late, and the voting members decided on a half-point reduction to kick off this easing cycle, bringing the new Fed Funds trading range down to 4.75%–5%.
The markets closed quite strong last week and were approaching all-time highs again for the S&P 500. The most recent Presidential debate shifted the odds markets, as Harris became a 55-45 favorite on the betting site PredictIt and a very slight favorite on Polymarket. It is positive for the risk markets which did not pull back with Harris gaining strength.
Due to balance sheet concerns, the higher-for-longer interest rate environment has been a significant headwind for the relative performance of U.S. small-cap equities.
Nvidia’s strong earnings exceeded expectations, but the stock fell as investors recalibrated their expectations given its high valuation.
Post-Jackson Hole and now post-jobs report, the markets can settle in for a rate cut at next week’s FOMC meeting.
Last week’s big day in the markets and for the economy was on Friday. I characterized the jobs report as being weakish—not disastrous but certainly not strong. The payroll report came in a bit short of expectations with weak lowered revisions to past reports, and although the unemployment rate adjustment was expected, the U-6 unemployment rate, a broader measure of labor underutilization, continued to rise indicating underlying weakness in the job market.
With Labor Day now in the rearview mirror, the money and bond markets will no doubt become laser focused on the September FOMC meeting. Yes, Fed Chair Powell telegraphed that a rate cut is forthcoming, but he also emphasized how monetary policy is still data dependent.
This week’s data reflects the resilience of the U.S. economy. Currently, the economy is holding steady with jobless claims in the 230,000 range and recent inflation data showing stability. Friday’s inflation report was essentially at expectations and indicates that the Federal Reserve (Fed) will make a rate cut of at least 25 basis points (bps) at the September meeting. Whether the cut is 25 or 50 will depend mostly on this week’s employment report.
With his Jackson Hole speech, Federal Reserve Chair Jerome Powell all but promised rate cuts were coming. That’s cool. But it is why that matters.
