Investment Outlook

 

Economic Outlook Highlights

First Quarter 2017     |  Economic and Investment Commentary  (PDF/New Window)
First Quarter 2017     |  Economic and Investment Commentary (PDF/New Window) First Quarter 2017 | Economic and Investment Commentary
Late-cycle transitions. Growth through March made this economic expansion the third longest on record, less a tribute to its underlying strength than to sluggishness preventing the usual bottlenecks driving inflation and interest rates high enough to squeeze housing and other credit-sensitive sectors. Unusually enduring support to economic growth has come from early-cycle housing, autos and other “big-ticket” consumer spending, supported by gains in household wealth, low mortgage rates, and ample credit. However, doubts have been raised over a second-quarter growth recovery to adequate, if not respectable 2%-2.5% growth from the estimated 1%-1.5% rate during the opening months of the year by disappointing activity data early in the period. Outlook uncertainties have been raised by disappointingly modest gains in March jobs and retail sales, inflation’s broad-based slowdown that month, reduced manufacturing growth in early-April plus “yellow flags” from slowing loan growth and a narrowing gap between shorter and longer-term rates often foreshadowing a slowing economy.
View an archive of Economic Outlook Highlights, brief summaries of the economic and financial market outlook along with issues affecting stocks and bonds.


Briefings and Commentaries

May 5, 2017 – Market Comment (PDF/New Window)
May 5, 2017 | Market Comment (PDF/New Window) May 5, 2017 | Market Comment
How high is too high? The stock market’s end-of-week high on a solid jobs report was a reminder of its underlying optimism, punctuated by resilience to so-so data prior to the employment news and to the threat of higher interest rates from a Fed seemingly intent on "normalizing" them regardless of the economy’s earlier signs of slowing growth and renewed "disinflation." The Fed funds futures market responded by lifting an already high probability of a rate hike at the June FOMC to a virtual certainty, triggering a modest rise in the yield on the policy-sensitive two-year Treasury note. Inflation-sensitive, longer-term yields bucked that rise, slipping, a bit, on lingering disinflation concerns in a reminder of the unusual combination of Fed-induced increases in short-term rates and restraint on inflation- and foreign-centric long rates during the first year of the last interest-rate "up cycle" in 2004- 05. Inflation-related support out-weighed any debilitating pullback in foreign demand for U.S. securities on optimism over the outcome of the weekend’s presidential elections in France. "Risk" assets, like stocks and other highly charged, economically sensitive investments, were in command a second straight week, lifting a narrow sample to a mid-March high against a similar, small grouping of "haven" assets including high-quality government securities, gold , Swiss francs, and Japanese yen.
View an archive of briefings and commentaries that provide detailed analyses of the current economic climate and investment conditions.

Gary Schlossberg

Senior Economist

Gary SchlossbergAs senior economist, Gary Schlossberg is responsible for assessing the economic environment and providing input to the equity and fixed-income portfolio management teams at Wells Capital Management.

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