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Market Insight

The Fed’s on the QT
by Liz Ann Sonders
September 20, 2017

Having loudly telegraphed its decision in advance, the Fed announced it would start to shrink its behemoth $4.5 trillion balance sheet; but held rates steady.

How the Shift by Central Banks May Affect the Stock Market
by Jeffrey Kleintop
September 18, 2017

Despite the coming shift by central banks towards trimming/tapering their balance sheets, we don’t believe the bull market is at risk.

Trying to Reason With Hurricane Season: The Aftermath of “Harma”
by Liz Ann Sonders
September 11, 2017

The dual hurricanes of Harvey and Irma will continue to exact their toll on households, businesses and the economy; but less on the stock market.

U.S. vs International: What Do Earnings Tell Us About What May Be Ahead?
by Jeffrey Kleintop
September 05, 2017

Over the past 15 years, earnings per share for both international and U.S. companies went from $33 to $108, but they took very different paths, illustrating the diversification benefits of global investing.

Schwab Market Perspective: A Preview of Coming Attractions?
by Liz Ann Sonders, Jeffrey Kleintop, Brad Sorensen
September 01, 2017

The summer “lull” is coming to an end—what should investors look forward to?

Radioactive II: Could the Tide Finally Be Turning for Active vs. Passive?
by Liz Ann Sonders
August 28, 2017

Passive investment management continues to reign over active, but active is staging a counterattack and is being aided by plunging correlation and widening sector dispersions.

Earnings may be about to do something they’ve never done before
by Jeffrey Kleintop
August 21, 2017

For the world’s stock market to continue to rise, it is our view that after trying and failing three times over the past 10 years earnings per share must push through the ceiling of $30.

Twist and Shout: United States Takes on North Korea … Implications for Stocks
by Liz Ann Sonders
August 14, 2017

Rising tension between the United States and North Korea was a catalyst for a swift reversal in stocks last week, but not the only reason.

What are fund flows telling us about trends and risks in the global stock market?
by Jeffrey Kleintop
August 07, 2017

What are fund flows telling us about trends and risks in the global stock market?

Big Time: An Update on Our U.S. Large Cap Bias
by Liz Ann Sonders
July 31, 2017

We continue to emphasize large cap U.S. stocks over small cap stocks on a secular basis, although cyclically, small caps could find their footing.

Fed Keeps it on the QT
by Liz Ann Sonders
July 26, 2017

The Fed surprised no one by holding off on raising rates, but added a teaser to the statement suggesting quantitative tightening (QT) could begin in September.

An important benefit to global investors is back after 20 years
by Jeffrey Kleintop
July 24, 2017

What’s happening in the markets that could benefit investors?

Where’s the Next Bubble?
by Jeffrey Kleintop
July 10, 2017

The current candidates for the next bubble do not seem to fit the classic bubble profile and may cause less potential damage if they were to burst, but that doesn't mean they don't carry risks for investors.

2017 Mid-year US Equity Outlook: Rattle and Hum
by Liz Ann Sonders
July 03, 2017

Neither partisan conflict nor monetary policy uncertainty has dented the U.S. equity bull market; but are risks rising in the second half?

2017 Mid-year Global Market Outlook: Broader Growth, Narrower Risks
by Jeffrey Kleintop
June 26, 2017

Global stocks may continue to rise in the second half of the year supported by broad global economic growth and receding political risks.

The Space Between … Tech Today Doesn't Resemble Tech Circa 2000
by Liz Ann Sonders
June 19, 2017

Since the 5% pullback in the S&P 500's technology sector some are drawing parallels to the bubble peak in 2000; which we think is a stretch.

Will the Fed Hike Rates This Week?
by Schwab Center for Financial Research
June 12, 2017

Amid signs of steady economic growth but low inflation, Federal Reserve policymakers will meet this week to consider another change in short-term interest rates. Will they or won’t they hike rates?

Are Bonds Signaling a Major Stock Market Peak?
by Jeffrey Kleintop
June 12, 2017

Does the flattening yield curve in the bond market and rising prices in the stock market reflect a fundamental disagreement on the prospects for the global economy?

Stocks and Bonds Rally: Can Both Be Right?
by Schwab Center for Financial Research
June 06, 2017

Two major asset classes appear to be pitted against one another in a tug-of-war over where the economy is headed. Which is right—the stock market or the bond market?

The Long Period of Underperformance for Emerging Market Stocks May Finally Be Over
by Jeffrey Kleintop
May 30, 2017

The end of the long period of emerging market stocks’ underperformance is supported by a recent change in trend for each of the four drivers of emerging markets.

Gimme Three Steps … and a Stumble?
by Liz Ann Sonders
May 22, 2017

The Fed will continue to raise rates, which shouldn’t alarm investors; but the addition of quantitative tightening (QT) via balance sheet shrinkage could drive volatility.

Is the Stock Market Just Quiet or Is It Too Quiet?
by Jeffrey Kleintop
May 15, 2017

Does the low volatility and trading volume of this quietly rising stock market mean it’s vulnerable to a sharp pullback on any piece of bad news?

Mixed Signals: What Does Recent Economic Data Mean for Bonds?
by Schwab Center for Financial Research
May 02, 2017

As the Federal Reserve meets this week, bond investors are grappling with the implications of recent economic data. Here’s why bond investors may still be in for a bumpy ride, and what to consider doing now.

What the Coming Tax Cuts Mean for the Stock Market
by Jeffrey Kleintop
May 01, 2017

The leaders of most major countries are implementing or calling for corporate tax cuts. This may be welcome news for stock market investors since it could mean a boost to after-tax profits.

Missiles and Markets: An Investor Guide to Geopolitical Risks
by Jeffrey Kleintop
April 17, 2017

The long history of U.S. missile strikes and NATO military operations shows us that the market impacts of these geopolitical conflicts have been small and brief.

Top Five Trade Issues Investors Should Be Watching
by Jeffrey Kleintop
April 03, 2017

World trade is steadily rising, but changing trade agreements hold the potential to shape the direction of global trade and stock markets.

The Fed has China in a Tough Spot
by Jeffrey Kleintop
March 20, 2017

The Fed rate hike has put China in a tough spot in early 2017. How China responds will be important for global markets as investors assess the trade fallout and growth trajectory for the world’s second largest economy.

The future of Europe: EU 2.0 and its impact on the markets
by Jeffrey Kleintop
March 06, 2017

What does Europe’s future look like and what might it mean for investors?

The Stock Market Sees Nothing to Worry About—That May Be About to Change
by Jeffrey Kleintop
February 21, 2017

Stock markets are currently behaving as if there is nothing to worry about, but that may be about to change now that we are within 45 trading days of the French Presidential election.

Simple Indicators In A Complex World
by Jeffrey Kleintop
February 06, 2017

When people feel there is a situation that is out of their control or too complicated to analyze, they often fall back on rules of thumb to make decisions.

Five Reasons to Stay Invested Despite Heightened Uncertainty
by Jeffrey Kleintop
January 23, 2017

There are five reasons to stay invested despite the heightened uncertainty.

Not Fade Away: Will High Consumer/Business Confidence Fade or Persist?
by Liz Ann Sonders
January 17, 2017

Most measures of both consumer and business confidence have surged post-election; with consumer confidence likely more stable and business confidence possibly more fickle.

The CURE for a calm market: Four risks for 2017
by Jeffrey Kleintop
January 09, 2017

After a calm post-election climb for stocks, developments in China, United Kingdom, Russia, and Europe may bring a return of volatility.

5 Reasons International Stocks May Underperform in 2017
by Jeffrey Kleintop
December 12, 2016

There are five key reasons developed international stocks may lag U.S. stocks again in 2017.

Happy Unrecession: The Alice in Wonderland Economy
by Jeffrey Kleintop
November 28, 2016

While the odd and upside-down developments confronting investors may seem mad, the stock market gains are not as misguided or illogical as they may at first seem.

Global Investing: 6 Trends to Watch
by Jeffrey Kleintop
November 14, 2016

A look at the backdrop for global investing in 2017.

Trump Wins: What Happens Now?
by Schwab Center for Financial Research
November 09, 2016

Donald Trump’s surprise presidential election victory led to some initial market volatility. Will it continue? Here’s what  investors should know.

Market Volatility, Trading Halts and Circuit Breakers
by Schwab Center for Financial Research
November 09, 2016

Exchanges may halt trading when the S&P 500 Index® drops quickly. Here’s how “circuit breakers” work and what they’re supposed to do.

Recession Odds Pass Key Threshold
by Jeffrey Kleintop
October 31, 2016

A reliable historical indicator suggests the events of October may have been more soothing than scary for long-term investors.

Three Reasons Stocks May Avoid Another Lost Decade
by Jeffrey Kleintop
October 17, 2016

The end of September marked 10 years with no growth in earnings and nine years with no gain in the stock market—what will the next 10 years offer investors?

Going Godzilla: What has the Bank of Japan Unleashed?
by Jeffrey Kleintop
October 03, 2016

The Bank of Japan faces a rising risk that their policy has created a monster that may be getting harder to control.

World Tour: An Around The World Look At the Economic Landscape
by Jeffrey Kleintop
September 19, 2016

The global picture may have brightened a little, thanks largely to Asia, but with little momentum to that improvement.

Fed Uncertainty Brings Volatility to Markets
by Schwab Center for Financial Research
September 09, 2016

U.S. stocks fell sharply Friday. Fed uncertainty means market volatility could continue.

Mind the Gap: Are Earnings Expectations Too High?
by Jeffrey Kleintop
September 06, 2016

After a year and a half of cutting their earnings estimates for the world’s companies by a total of 14%, analysts have spent the past six months raising them. Are they now expecting too much?

Your portfolio may be less diversified than you think
by Jeffrey Kleintop
August 22, 2016

Investors with a large home bias in their portfolio may not be nearly as diversified as they believe.

Does Zika pose an Olympic-sized risk to stocks?
by Jeffrey Kleintop
August 08, 2016

While the threat of Zika at the Olympic Games may garner headlines, past world pandemics show us that the market impact has not been significant—even when the global economy was especially vulnerable to a shock.

Three Reasons Why Now is Not the Time to Retreat from Global Diversification
by Jeffrey Kleintop
July 11, 2016

The Brexit is another in a series of political, economic and financial shocks coming from outside the United States. So is it time for long-term investors to retreat from global diversification to the perceived relative safety of the U.S. stock market?

After the Brexit Vote: What Lies Ahead for Markets?
by Jeffrey Kleintop
June 27, 2016

U.K. voters’ decision to  have decided to leave the European Union has rocked global markets. What does will “Brexit” mean for the markets for investors going forward?

Five ways investors can make the most of slower growth
by Jeffrey Kleintop
May 31, 2016

Making the most out of a slower growth environment may help define investment success in the coming years leading investors to find bright spots among mega-caps and emerging market stocks.

Trust but Verify: Five Independent Indicators of China’s Economy
by Jeffrey Kleintop
March 07, 2016

Some data coming out of China could be considered questionable. Learn where to look for a more accurate picture.

A World of Ideas
by Jeffrey Kleintop
February 24, 2016

Using themes to guide your global investments can help you transcend geography.

Negative Interest Rate Policy Adds Up To Less than Zero for Investors
by Jeffrey Kleintop
February 08, 2016

While central banks’ QE programs lifted stock prices in recent years, the latest shift by central banks to negative interest rate policy seems to be weighing on stocks and may be working against their intentions of promoting economic growth.

Central Banks to the Rescue?
by Jeffrey Kleintop
January 25, 2016

Rather than rescuing investors, comments from central bankers are more likely to create volatility in the markets until the global economic path is clearer.

How Rate Hikes Impact International Stock Markets
by Jeffrey Kleintop
December 21, 2015

The central banks of 20 nations raised interest rates in 2015, but not all countries are as well–positioned as the U.S. to handle the impact of rate hikes.

5 Ways Climate Policies May Impact Your Portfolio
by Jeffrey Kleintop
December 17, 2015

With climate-change concerns shaping new government and business policies, investors should be aware of the potential effects on global markets.

Decoding Devaluations: What Do Currency Moves Mean for Your Money?
by Jeffrey Kleintop
December 07, 2015

Find out more on how currency devaluations could impact your investment portfolio.

Devil Inside, Redux: Another Look at the Variety of U.S. Market Valuation Metrics
by Liz Ann Sonders
November 30, 2015

Looking again at some popular valuation metrics, it’s a mixed bag … with mixed messages, suggesting as always that valuation is in the eye of the beholder.

India Becomes World’s Fastest Growing Economy: What Investors Need to Know
by Jeffrey Kleintop
November 23, 2015

India has taken the title of the world’s fastest growing economy from China. Despite obvious similarities, the differences between these two economies mean the new leadership holds unique impacts for the global economy and markets.

Don’t Overlook Emerging Markets
by Jeffrey Kleintop
August 26, 2015

They could offer attractive growth and diversification benefits.

Panic Is Not a Strategy—Nor Is Greed
by Liz Ann Sonders
August 24, 2015

In a world where time horizons have shrunk precipitously, think longer term.

Devil Inside: Dissecting the Most Popular Valuation Metrics
by Liz Ann Sonders
May 18, 2015

Shiller’s CAPE says the US stock market is grossly overvalued; while traditional P/Es say only mildly so…what’s to make of the wide gap?

Slowdown in China
by Jeffrey Kleintop
March 23, 2015

China’s economy is changing gears. What does that mean for investors?

The Elegance of Indexing
by Schwab Center for Financial Research
June 20, 2014

Investors can diversify and participate in the long-term growth of markets by including index funds in their portfolios.

Selecting Dividend-Paying Stocks—Can You Do Better?
by Schwab Center for Financial Research
May 19, 2014

In a low-yielding environment, many investors have been drawn to dividend-paying stocks. But with recent lackluster performance, we look at alternative ways to help screen them.

Why Cash-Out Refinancing to Invest Doesn't Add Up
by Schwab Center for Financial Research
October 23, 2013

Gambling with borrowed money is a recipe for disaster—comparing interest rates doesn't tell the whole story.

Mutual Fund Fees: 3 Key Factors In Keeping Costs Down
by Schwab Center for Financial Research
July 05, 2013

Mutual fund fees explained: 3 things you need to know about fees and expense ratios.

Eye of the Beholder: Dissecting the Variety of Price-Earnings Ratios
by Liz Ann Sonders
April 02, 2013

There are many ways to value the stock market. Here, a look at several popular metrics, along with my view on the attractiveness of stocks.