Over the last few weeks investors have put upward pressure on bond yields for a variety of reasons. First, the U.S. treasury lost its last AAA rating when Moody’s downgraded United States debt to AA.
Big, Beautiful Bond Yields
Muni Moment: Why Yields Are Attractive Now
For investors seeking income and a source of portfolio stability, municipal bonds present a compelling option. These debt instruments are issued by cities, states and local governments across the United States to finance public projects such as schools, roads and utilities.
Investment Strategy Second Quarter 2025
While market volatility has been highly-elevated in recent weeks with the almost daily change in the proposed tariff landscape, in this quarter’s investment strategy video we endeavor to provide a measured perspective on what lies ahead and how navigate the psychology of investing.
Return of the Vigilantes
This week, equity market volatility continued due to last week’s announcement of global tariffs. Investors, attempting to handicap the potential impacts on the U.S. economy and corporate profits, caused a bond market rally by selling risky assets (stocks) and buying safe assets (government bonds). However, something changed over the weekend. The 10-year U.S. Treasury yield started the week at 3.9% and, by Tuesday evening, had reached 4.5%.
Tariffs and Volatility: Turn Down the Volume
This week, we sent this communication to all Ferguson Wellman and West Bearing clients in response to heightened market volatility. We felt that this message was also appropriate to reiterate for our weekly blog.
2025 Investment Outlook Webinar Video: Lessons Learned
Annual presentation from Ferguson Wellman sharing our views for the year regarding the global economy and capital markets, as well as a planning update from our wealth management team.
Investment Strategy Video Fourth Quarter 2024
Chief Investment Officer George Hosfield, CFA, presents the firm's quarterly Investment Strategy titled, "Awaiting the Score." In the video, he discusses how the Fed is shifting its focus to the labor market.
Tale of the 10-Year Treasury
A sense of excitement often marks the 4th of July as millions of Americans celebrate with a day full of festivities, reflection and national pride. This holiday kicks off July with a bang and sets the tone for a month filled with what we all enjoy – fun in the sun! Equities have taken center stage, the “bang” investors sought this year.
Investment Strategy Video Third Quarter 2024
Chief Investment Officer George Hosfield, CFA, presents the firm's quarterly Investment Strategy titled, "We’ve Landed."
Vibecession
The summer season is fast approaching, and this typically brings feelings of excitement and relaxation; a time of year that many people spend months looking forward to. However, these positive feelings may not translate to all facets of life.
Talkin' 'Bout My Generation
The world of investing is welcoming a new generation: Gen Z. A recent study by the FINRA Foundation and the CFA Institute found that a whopping 56% of Gen Z are already invested, with many starting younger than any generation before them. This tech-savvy group is also turning to social media for investment information, making their approach quite different from those of us who entered the market during or after the Great Financial Crisis (GFC).
Putting the ‘Income’ Back in Fixed Income
With the Federal Reserve taking a ‘higher-for-longer’ approach to interest rates, bond yields are higher than what the market expected at the start of the year.
Mega-Cap Earnings in Focus
The U.S. stock market saw a rebound the last couple of weeks, breaking the prior three-week losing streak. The S&P 500 gains were driven by mega-cap names due in large part to their recent earnings results which exceeded investors’ expectations.
Two Steps Forward, One Step Back
The first three weeks of the second quarter have been tough for both equity and bond investors. After a great start to the year, there hasn't been any place for investors to hide in April. The chart below highlights that the three major equity classes, as well as bonds, have all posted negative returns, with Small Caps now down close to 4% for the year.
Is 3% the New 2%?
The Consumer Price Index (CPI) is a measure of goods and services prices across the economy, and a popular gauge of inflation. The headline CPI rose 3.5% in March from a year earlier, which was higher than economists had forecast and an increase from February’s 3.2% reading. The Core CPI, which excludes the volatile food and energy components, also rose more than expected, with medical care and auto insurance boosting the non-housing service prices.
Second Quarter 2024 Investment Strategy Video: So Far, So Good
Head of Fixed Income and Principal Brad Houle, CFA, presents the firm's quarterly Investment Strategy titled, "So Far, So Good." In the video he discusses how the Fed's fight on inflation is faring, our belief that commercial real estate is not similar to residential real estate circa 2008 and investors' expectations for earnings for the remainder of the year.
Market Letter Second Quarter 2024: So Far, So Good
We present Market Letter publication for the second quarter 2024 titled “So Far, So Good” in which Chief Investment Officer George Hosfield, CFA, outlines our belief the Fed remains on course to deliver an ever-so-rare soft landing to this inflationary cycle. Dean Dordevic writes about the Japanese economy and Warren Buffett’s investment there in recent years since the introduction of the “Corporate Governance Code” and Jason Norris, CFA, provides an update on equity market valuations and how investors expect the market to grow for the remainder of the year.
Productivity = Prosperity
By March, our feelings of excitement for a new year have generally worn off and we have settled into our winter routines. The hope of an early spring and longer days are normally what carries us through the season, but this year, more excitement is brewing.
2024 Investment Outlook Webinar Video: Sticking the Landing
Annual presentation from Ferguson Wellman sharing our views for the year regarding the global economy and capital markets, as well as a planning update from our wealth management team.
What's Next for Interest Rates?
One irony from the bond market in 2023 was that the year started with near unanimous calls for a recession, finished with an over 20% return for the S&P500 and consensus for a soft landing, yet the yield on the benchmark 10-year U.S. Treasury ended the year right where it started at 3.88%.