Market Insight

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.

Schwab Market Perspective: Be Careful What You Wish For
by Liz Ann Sonders, Jeffrey Kleintop, Brad Sorensen
July 19, 2019

Stocks have been buoyed by rate cut expectations, but are investors putting too much stock in monetary policy and setting themselves up for potential disappointments?

Round Here: Bulls Celebrate Round Numbers for U.S. Indexes
by Liz Ann Sonders
July 15, 2019

Round number crosses for each of the three major U.S. equity averages over the past month helped elevate investor sentiment, but is it now stretched?

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.

Another Last Goodbye: U.S. Stocks’ Roller Coaster 18 Months
by Liz Ann Sonders
July 01, 2019

If you just woke from an 18-month slumber and looked at the market you might be fooled into thinking it’s gone nowhere; but what a ride it’s been.

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.

Street Fightin’ Man: President Trump Ups Trade War Ante
by Liz Ann Sonders
May 20, 2019

Trade is back in the headlines, and on Twitter, with volatility sensitive to every tweet, tariff escalation and retaliation; but a look at the actual economic implications is in order.

Stocks Drop as U.S.-China Trade War Escalates
by Schwab Center for Financial Research
May 13, 2019

Stocks sank as China and the U.S. threatened higher tariffs on imports.

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.

Quarterly Market Outlook: Stay Prepared
by Schwab Center for Financial Research
March 20, 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.

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.

Can’t You Hear Me Knocking: A Contrarian Look at Inflation
by Liz Ann Sonders
March 11, 2019

I’m more intrigued with untold stories than well-told stories; which is why my contrarian side wonders whether there’s too much investor complacency about inflation.

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.

Panic Is Not a Strategy—Nor Is Greed
by Liz Ann Sonders
February 26, 2019

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

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.

Investors May Get Some Good News For A Change
by Jeffrey Kleintop
November 26, 2018

Ominous signs for the world economy may be causing stocks to price in an imminent global recession. However, these appear to be isolated, short-term events that already show signs of stabilization. Growth may rebound in the near-term and offer some relief for stocks.

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.

Is It Time to Consider European Equities?
by Jeffrey Kleintop
November 09, 2018

The U.S. stock market’s relentless run-up has left many investors exposed. Now may be the time to allocate elsewhere.

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.

What’s In Store For Global Stocks In Q4?
by Jeffrey Kleintop
October 01, 2018

We believe there are three positives, three negatives and three wildcards for stock market performance in the fourth quarter. We expect the balance of these factors to result in further gains for global stocks.

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.

US Bonds Have an Important Message for International Stocks
by Jeffrey Kleintop
September 04, 2018

The U.S. bond market has been a good indicator of peaks in international stock markets. This is now important since the yield curve in the U.S. has flattened more than in Europe.

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?

Top Five Global Risks for Investors in 2018: Mid-Year Update
by Jeffrey Kleintop
July 23, 2018

Many of our top risks for 2018 have come to pass. Our updated top five global risks for investors in 2018 are: geopolitics, chasing returns, return of inflation, dollar strength, and fading momentum.

Trade Tremors: Measuring The Actual Impact
by Jeffrey Kleintop
July 09, 2018

Trade-war anxieties have been reflected in markets and surveys of both consumers and businesses, but thus far have not appeared in actual “hard” economic data.

2018 Global Mid-Year Outlook: From Sugar High to High Tariffs?
by Jeffrey Kleintop
June 25, 2018

Global economic and earnings growth momentum is slowing, but still growing. How the ongoing trade conflicts develop pose a risk to markets the second half of the year.

Emerging Market Stocks: From Front-Runner To Dark Horse?
by Jeffrey Kleintop
June 11, 2018

Emerging market stocks appear to have gone from front-runner to dark horse in the minds of investors. Fear of a return to an environment that hobbled emerging markets in the past has gripped the market. Yet, the current environment may be most similar to those which generated outperformance by emerging markets in the past.

Are Stocks Taking A GAP Year?
by Jeffrey Kleintop
May 29, 2018

It is now graduation time for many high school students. But not all of the new graduates are headed to college right away. Gap years are growing more popular with students taking a year off to mature before taking on the next step in their education.

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.

Investors’ Guide to Diverging Global Economic Policies
by Jeffrey Kleintop
April 30, 2018

What does the increasingly different policy environments in U.S. and non-U.S. economies mean for stock market investors?

When Will the High Volatility End?
by Jeffrey Kleintop
April 16, 2018

April may bring a halt to the decline in stocks, but heightened volatility may not be going away for a long time.

Trade Fears Continue to Rattle Markets
by Schwab Center for Financial Research
April 06, 2018

An escalation in rhetoric over U.S.-China trade sent stocks back toward correction territory.

From Overheating to Underwhelming: Is the Economy Hurting Stocks?
by Jeffrey Kleintop
April 02, 2018

Economic growth has been an important factor driving the stocks market over the past year. But what if that economic support is now fading?

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.

Trade War and Peace: Which Markets Are Most At Risk
by Jeffrey Kleintop
March 05, 2018

Global stocks gave up roughly half of their recovery from the February correction last week as President Trump previewed his plan to impose a 25% tariff on steel imports and 10% on aluminum. Not every new tariff constitutes a trade war—metals have often been a target of U.S. tariffs with steel tariffs imposed by each of Trump’s recent predecessors in the White House. Although small in economic impact, these tariffs are symbolically important.

Market Volatility: Stocks Drop on Tariff Fears
by Schwab Center for Financial Research
March 02, 2018

News that the White House was contemplating broad tariffs on steel and aluminum imports rattled the stock market this week. Here’s what investors should know.

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.

Market Volatility: Here’s What You Should Know
by Schwab Center for Financial Research
February 09, 2018

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

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?

Five Global Risks for Investors in 2018
by Jeffrey Kleintop
January 08, 2018

Five global risks for investors in 2018

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.