October brought a significant drawdown across major U.S. equity indices. Fears over the potentially negative effects of tariffs and higher interest rates on global growth have been building for most of the year. We think the speed of interest rate increases (as opposed to their absolute levels) may have been the catalyst that spooked U.S. markets into correction territory, with technology bearing the brunt of the pullback. We are closely watching for additional risk-off signals. Credit spreads have widened, as is typically the case when volatility spikes. But, the fixed-income market isn’t showing signs of panic. The continued volatility in emerging markets bears watching. Against this mixed view of current market dynamics, we believe several factors support the case to sustain long-term U.S. growth equity allocations.
This blog post originally ran as an Institute Alert by Darrell Cronk, CFA, President, Wells Fargo Investment Institute and Chief Investment Officer, Wealth and Investment Management; Paul Christopher, CFA, Head of Global Market Strategy; and Sameer Samana, CFA, Senior Global Market Strategist.
We believe small-cap equities are appealing in today’s economic environment. A number of developments have improved their appeal.
Equity market volatility in the U.S. reminds us that while it can be concerning, it also presents potential opportunity to employ new thinking when it comes to investing.
We’re addressing interest rate sensitivity in your clients’ portfolios—talking about views on duration with a focus on helping limit risk.
Derrick Irwin, portfolio manager on the Berkeley Street Emerging Markets Equity team at Wells Fargo Asset Management discusses the expansion of growth in emerging markets.
The trends are clear. The past few years have seen a dramatic and warm embrace of passive investing across the capital market. Passive exchange-traded funds (ETFs) and passive mutual funds have dominated flows.
Ann Miletti, senior portfolio manager for the private market value equity approach at Wells Fargo Asset Management discusses navigating U.S. tax reform, M&A, and earnings.
If your clients are concerned about opportunity and volatility in the U.S. equity market, consider exploring internationally. We’re providing talking points and solutions to share with your clients.