Market Insight

Are Stocks Priced for Perfection or Recession?
by Jeffrey Kleintop
October 14, 2019

Fortunately, stocks are nowhere near that overvalued, based on the price-to-earnings ratio. But, if we take a more refined look at historical stock market valuations at peaks and lows, we find some cause for concern.

Schwab Market Perspective: Deja vu
by Liz Ann Sonders, Jeffrey Kleintop, Kevin Gordon
October 11, 2019

With a resurfacing in trade tensions and persistent economic uncertainties, investors should prepare for further volatility.

Welcome to the Working Week: A Look at the State(s) of Employment
by Liz Ann Sonders
October 07, 2019

Employment reports are increasingly in focus due to weak survey data and a risk that manufacturing’s weakness spills over to services/consumer segments.

Market Volatility: What Investors Should Know
by Schwab Center for Financial Research
October 02, 2019

U.S. stocks plunged Wednesday, as weak economic data rattled investors. Here’s what you should know.

Passing the Baton: Signs of Fiscal Stimulus Emerge
by Jeffrey Kleintop
September 30, 2019

After monetary policymakers took action to lower interest rates and ease financial conditions, they have been asking for fiscal policymakers to enact stimulus though stepped-up government spending and tax cuts—they may be starting to get their wish.

Take Me to Your Leader: Analyzing the Latest Leading Indicators
by Liz Ann Sonders
September 23, 2019

The Conference Board’s Leading Economic Index was flat last month; and although at a cycle high, it remains in a flattish trend over the past year.

Quarterly Market Outlook: Trade Winds and Market Choppiness
by Schwab Center for Financial Research
September 23, 2019

The Schwab Center for Financial Research’s theme for 2019 was “be prepared,” and that still holds true. Here’s what we expect to see for the remainder of the year.

The Final Cut … or More to Come?
by Liz Ann Sonders
September 18, 2019

In line with expectations, the FOMC cut rates by 25 basis points; also lowering the IOER by 30 basis points to address liquidity problems in the repo market.

Q&A on Brexit: The Options and Implications for Investors
by Jeffrey Kleintop
September 16, 2019

We see five main options for Brexit in the coming months; three result in a near-term resolution while two options result in a further delay or “no deal” Brexit.

Chop, Chop, Chop: Stocks’ Choppy Behavior Around Trade News
by Liz Ann Sonders
September 09, 2019

Stocks recently broke out of their short-term range on “good” trade news; but trying to trade around trade-related news has been a treacherous exercise.

Negative Interest Rates And The Future Of Investing
by Jeffrey Kleintop
September 03, 2019

If Japan represents what the debt and demographic future looks like for many countries, then the future for investors in a world of negative bond yields may lead to more stock market exposure.

War (What is it Good For?)
by Liz Ann Sonders
August 26, 2019

Economic uncertainty has spiked given the escalating U.S.-China trade war; with increasing risk it weakens the dividing line between the manufacturing and consumer sectors.

Is The Tariff War Turning Into A Currency War?
by Jeffrey Kleintop
August 19, 2019

If rate cuts aren’t seen as enough to address slowing growth and policymakers turn to direct currency intervention, the resulting currency war could be bad news for investors.

Panic Is Not a Strategy—Nor Is Greed
by Liz Ann Sonders
August 15, 2019

Why doing nothing may be the better response to market volatility.

Recession Watch (or Distant Early Warning?)
by Liz Ann Sonders
August 12, 2019

Current economic conditions do not look recessionary, but risks are rising and if we’re heading into one, it’s possible it already started.

Market Volatility: Here’s What You Should Know
by Schwab Center for Financial Research
August 07, 2019

Market volatility can make anyone nervous. Here’s what investors should know about dealing with it.

Tariffs: Manufacturing A Recession
by Jeffrey Kleintop
August 05, 2019

Another round of trade tariffs is an additional hit to manufacturing, potentially deepening the global slowdown into a recession, despite the efforts of the Fed and other central banks.

Tyrannosaurus Debt: A “Deep Dive” Look at Debt and its Burden(s)
by Liz Ann Sonders
July 29, 2019

The national debt and deficits remain at worrisome levels, spawning questions of how economic growth will be affected and whether we will hit another wall.

What Race Horses Are Telling Us About Rate Cuts
by Jeffrey Kleintop
July 22, 2019

Economic indicators don’t have to be complicated to work. We look at four alternative indicators for the main driver of the global economy and assess how interest rate cuts might impact them.

Valuations Hold A Surprising Message For Stock Market Investors
by Jeffrey Kleintop
July 08, 2019

Valuations suggest international stocks may produce above average, double-digit annualized total returns over the next 10 years, in contrast to below average, mid-single digit returns for U.S. stocks.

2019 Mid-Year Outlook: Rate Expectations
by Schwab Center for Financial Research
June 26, 2019

Recession risk is rising, but markets expect central banks to keep it at bay by cutting short-term interest rates. Will it be enough to keep the stock market rally going?

Global Stocks Mid-Year Outlook
by Jeffrey Kleintop
June 24, 2019

We highlight the risks that threaten a vulnerable global economy and the investment opportunities that may surprise unprepared investors.

U.S. Stocks/Market Mid-Year Outlook: Battle Symphony
by Liz Ann Sonders
June 20, 2019

Myriad economic, market and policy battles are raging today; providing some color, but lots of gray area as we look ahead to the second half of the year.

U.S. Imports from China Plunge As Other Emerging Markets Fill The Gap
by Jeffrey Kleintop
June 10, 2019

U.S. imports from China have plunged this year, offset by import gains for other emerging markets not subject to U.S. tariffs.

Borrowed Time: Final Rate Hikes And Stock Market Rallies
by Jeffrey Kleintop
May 28, 2019

History suggests that the stock market rally since the last Fed rate hike on December 19, 2018 may be on borrowed time.

Geopolitics: Examining The Top Five Risks
by Jeffrey Kleintop
May 13, 2019

Recent developments have caused markets to focus on geopolitical risk, with more to come in the month of May.

Earnings Season Not Adding Up
by Jeffrey Kleintop
April 29, 2019

Stock markets around the world have posted steady double-digit gains this year on a rebound of valuations. However, volatility may return without support from earnings growth.

Diversification: Finally Back After 20 Years
by Jeffrey Kleintop
April 15, 2019

The movements of the world stock markets are less correlated with each other than they have been in the past 20 years.

Inversions and Reversals: Leaders and Laggards May Be Changing Places
by Jeffrey Kleintop
April 01, 2019

Reversals in the long-term relative performance of growth and value stocks, large and small cap stocks, and U.S. and international stocks have been marked by yield curve inversions.

Blue, Red and Grey: Yield Curve Inversions
by Liz Ann Sonders
March 25, 2019

The inversion of the 10y-3m yield curve unleashed a sharp pullback in stocks; but the Fed’s “preferred” curve first inverted in early January.

Brexit: What’s Next for Investors
by Jeffrey Kleintop
March 18, 2019

The stock market impact of the U.K. crashing out of the EU with no plan would probably be significantly negative, but if the disorderly “no deal” Brexit scenario is avoided the chances seem to favor a partial rebound in U.K. stocks and the British pound.

U.S.-China Trade Tensions Have Eased, Will Growth Revive?
by Jeffrey Kleintop
March 04, 2019

This year’s rally in Chinese and EM stocks could become vulnerable in the coming months as optimism over a trade deal leads to disappointment over its actual economic and earnings effect.

The Beginning is the End is the Beginning: A Look at Recessions
by Liz Ann Sonders
February 25, 2019

Recessions are inevitable; what we don’t know is the length of runway between now and the next one. But we can look at history as a guide.

Diverging Trends: A Look At Earnings Growth Around The World
by Jeffrey Kleintop
February 19, 2019

The divergence in the assessment of the outlook reflected in the stock and bond markets may be decided by the ongoing convergence in earnings growth expectations across regions.

Five Stock Market Indicators For 2019 You Should Ignore
by Jeffrey Kleintop
February 04, 2019

As investors ponder what this year may hold in store for the markets, the inter-relationships between politics, economics, fiscal policy, monetary policy, and corporate actions can seem very complex. Investors may feel overwhelmed and seek a simple answer. When people feel there is a situation that is out of their control or is too complicated to analyze, they often fall back on rules of thumb to make decisions.

Tax War: Will Global Competition to Lower Taxes Lift Growth?
by Jeffrey Kleintop
January 22, 2019

After last year’s U.S. tax cuts contributed to better growth and market performance, a number of major countries are looking to reverse the declines in growth and voter satisfaction with tax cuts in 2019.

What Could Go Right in 2019?
by Jeffrey Kleintop
January 07, 2019

In recent months, stock market participants have been focusing on downside risks in 2019, but not all risks are to the downside.

2019 U.S. Market Outlook: Ten Years Gone
by Liz Ann Sonders
December 17, 2018

Can the U.S. economy make it to next July, when it would become the longest expansion in the post-WWII era? Let’s take a look.

Market Correction: What Does It Mean?
by Schwab Center for Financial Research
December 14, 2018

What does a market correction mean, what’s likely to happen next and what can investors do now?

2019 Global Market Outlook: Mind The Gap
by Jeffrey Kleintop
December 10, 2018

Global growth is likely to slow in 2019 as the economic cycle nears a peak. International stocks may continue to see heightened volatility and could enter a bear market if key indicators continue on their current path.

2019 Market Outlook: Be Prepared
by Schwab Center for Financial Research
December 10, 2018

Rising rates, declining liquidity and sluggish global growth—with trade conflicts as an additional headwind—may weigh on economic growth and market performance in 2019.

2019 Market Outlook: U.S. Stocks and Economy
by Liz Ann Sonders
December 10, 2018

U.S. economic growth was strong in 2018, but some of the forces behind that strength were either short-term or likely to fade going forward.

2019 Market Outlook: Global Stocks and Economy
by Jeffrey Kleintop
December 10, 2018

Global growth may slow in 2019 as the economic cycle nears a peak, with increasing drag from worsening financial conditions combining with full employment and rising prices.

Should You Invest In The Only Country Planning Stimulus In 2019?
by Jeffrey Kleintop
November 12, 2018

Economic growth for many of the world’s biggest economies is expected to slow in 2019, yet China appears to be the only one planning on implementing economic stimulus. While a bounce from China’s stimulus is possible, we believe global growth is likely to slow as the economic cycle nears a peak, leaving investors to consider reducing volatility by trimming the more volatile asset classes such as emerging market stocks.

What to Expect in a Bear Market for Global Stocks
by Jeffrey Kleintop
October 29, 2018

Recent stock market behavior and our belief in heightened risk of a peak in the global economic cycle in the next 6-18 months, makes it a good time to consider what has happened to stocks in a typical recession and bear market.

On Watch: Is There More Trouble Ahead for Stocks?
by Jeffrey Kleintop
October 15, 2018

Recent market volatility has made some investors wonder if the economic cycle is ending and stocks are at the start of a prolonged decline. One indicator we are watching for signs of the potential for a recession and a deeper and prolonged decline in stocks is the gap between the unemployment rate and the inflation rate. This indicator suggests that the risks are rising.

Emerging Market Stocks: What We Are Watching
by Jeffrey Kleintop
September 17, 2018

EM stocks are prone to high volatility, as we have experienced this year. We will be watching the signs closely to see if this is typical volatility or something leading to a deeper and more prolonged downturn.

Where Will The Next Crisis Come From?
by Jeffrey Kleintop
August 20, 2018

There are some reasons to think that the probability of a repeat of a past crisis has eased. The changes we have seen should help reduce the vulnerability of the global system to shocks like those of the past. Of course, risk has not been entirely eliminated from the system.

What Does GDP Mean For The Stock Market?
by Jeffrey Kleintop
August 06, 2018

What Does GDP Mean For The Stock Market?

How To Avoid A Shark Attack
by Jeffrey Kleintop
May 14, 2018

A shark attack could take a big bite out of unprepared investors’ portfolios who don’t rebalance.

Stocks’ Sweet Sixteen: Volatility May Reign As Competing Drivers Square Off
by Jeffrey Kleintop
March 19, 2018

As the NCAA basketball tournament gets down to the Sweet Sixteen, it is a good time to reflect on sixteen competing drivers of the markets that may make for an exciting showdown in the weeks and months to come.

Is it Over? Five Misconceptions About Corrections
by Jeffrey Kleintop
February 20, 2018

The worst of the current global stock market correction may be over, but it is unlikely to be the last one this year. Unfortunately, there are a lot of misconceptions about what signals the end of a correction.

Stocks Fall: Why Now, What’s Next?
by Jeffrey Kleintop
February 05, 2018

Stocks Fall: Why Now, What’s Next?

Expecting the Unexpected: Is a Demographic Disaster Looming?
by Jeffrey Kleintop
January 22, 2018

Expecting the Unexpected: Is a Demographic Disaster Looming?

Are Stocks too Expensive?
by Jeffrey Kleintop
November 27, 2017

History indicates stocks could have further to run.

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.

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.

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.