Webinar
Fall 2024 Post-Election Webinar
Gauging the market impact of election results.
8.2%
The increase in earnings for S&P 500 companies in the third quarter compared to a year earlier.
Consumer sentiment
A statistical measure of the overall health of the economy as determined by consumer opinion. It takes into account people's feelings toward their current financial health, the health of the economy in the short-term and the prospects for longer-term economic growth, and is widely considered to be a useful economic indicator.
Consumer sentiment improved in December in the University of Michigan Consumer Sentiment Index to the highest reading since April, the fifth consecutive month of progress. Year-ahead inflation expectations jumped to 2.9% (highest reading in six months) from prior month's 2.6%. The index is still low and below pre-pandemic levels, perhaps reflecting ongoing concerns about elevated prices.
― Robert Haworth, CFA, Senior Vice President, Senior Investment Strategy Director, U.S. Bank
Quick take: U.S. payrolls rebounded in November, and consumer sentiment improved but remains below pre-pandemic levels. Global purchasing manager surveys affirmed strength in services but ongoing stagnation in manufacturing.
Our view: Growth in the United States and India remains exceptional while other major economies, including China, Europe, Japan and the United Kingdom, demonstrate modest but positive economic expansion despite elevated interest rates.
Quick take: U.S. equity performance remains superb and broad based as holiday shopping shifts into high gear.
Our view: The fundamental backdrop remains supportive of a risk-on (aggressive) bias. Inflation is waning, interest rate cuts are in motion and earnings are trending higher, all bolstering sentiment and providing valuation support. Near term, price volatility is likely to be more the norm, with new administration policies emerging, the holiday selling season in full motion and geopolitical tensions heightened.
Quick take: Short-term Treasury yields fell last week, reflecting greater confidence that the Federal Reserve (Fed) will cut interest rates December 18.
Our view: Fundamental and technical tailwinds from resilient economic growth, constructive corporate balance sheet health and strong investor demand create opportunities in higher yielding but slightly riskier bonds.
Quick take: Prices fell across many real asset categories last week, including publicly traded real estate, global infrastructure and commodities. For real estate and global infrastructure, the decline was small in comparison to strong returns over the past year.
Our view: Publicly traded real estate provides investors a meaningful and steady source of income with continued economic expansion supporting fundamentals. Real asset exposures can also diversify portfolios by helping protect against inflation risks.
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With the U.S. government’s authority to borrow money bumping up against the federally mandated debt limit this year, is a political confrontation brewing that could impact capital markets?
Persistently higher prices continue to weigh on consumers and policymakers alike.