When Turkey cut interest rates last month, it was the 1000th interest rate cut since Lehman Brothers collapsed in 2008, according to analysis by Bank of America. Moreover, since then, central banks globally have bought over $23 trillion of assets to help support financial markets. Now, with many major developed economies recovering from the COVID-19 shutdowns and inflationary pressures remaining stubbornly high, central bankers are likely going to start to reduce monetary accommodation over the next few years. As central bankers start to reverse course though, markets are aggressively reacting to hawkish surprises that are seen coming out of

With Halloween over the weekend, what better to write about this week than what scares us? If our positive near-term market outlook proves to be overly optimistic, we believe one—or perhaps more than one—of these five things will likely be the culprit: inflation, an aggressive Federal Reserve, profit margin pressures, pulling forward of seasonal gains, and potentially overly bullish sentiment. 

Inflation

Central bankers are slowly acknowledging that inflation may be stickier than expected and that risks continue to tilt to the upside. At the same time, the baseline view remains that inflation will settle ba

At next week’s Federal Open Market Committee (FOMC) meeting, the Committee will likely need to reconcile its members’ views of when interest rate hikes should begin with the market’s ever changing view. After the September FOMC meeting, the Committee released its dot plot, which shows how individual Committee members were thinking about the path of short-term interest rates over the next few years. The Committee was evenly split between rate hikes beginning in late 2022 or beginning in early 2023. However, since the voting members were generally more dovish than the median dot plot would suggest, rate hikes were assumed, at

The S&P 500 Index has gained more than 20% so far this year, making more than 50 record highs along the way. Certainly nobody should be upset with that return if that was all 2021 brought us. However, we see signs that there could be more gains to come in the final two months of the year. Seasonal tailwinds, improving market internals, and clear signs of a peak in the Delta variant all provide potential fuel for equities heading into year-end, and we maintain our overweight equities recommendation as a result. 

Late October Is the Seasonal Low

One of the most important points we believe investors should recognize i