Active Insights

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Each episode, Chris Galipeau has an in-depth conversation with a different Putnam portfolio manager to share timely insights on the markets and global economy.

Yield curve inversion and market performance

At its March meeting, the Federal Reserve raised the federal funds rate by 25 basis points. The central bank also indicated that this is likely the start of a tightening cycle, as policymakers attempt to dampen the elevated levels of inflation seen since the start of the pandemic. Markets seem keenly focused on the yield curve in the United States, and whether its potential inversion would be an indicator that a recession is on the horizon. The most common relationship being monitored is the difference between 2-year and 10-year U.S. Treasury yields.

Market performance during Fed tightening cycles

In this analysis we assess asset class performance during prior cycles of Federal Reserve monetary tightening. Specifically, we measured performance across interest rates, equities, and fixed income the year after the start of rate hike cycles. Additionally, we looked at the impact on U.S. 10-year note yields as well as the slope of the U.S. Treasury curve.

A look at the Federal Reserve’s 2014 taper

With the Federal Reserve nearing a decision to begin tapering its asset purchases, we thought it would be beneficial to look at what occurred the last time the Fed reduced its asset purchases. In this analysis, we looked at the events surrounding the 2014 taper, how different markets and asset classes performed during the period, and what we believe may (and may not) be expected this time.

Post-recession market trends

How do different asset classes perform coming out of recession? Is there a drop off in performance in the second year of a recovery relative to the first year? In this analysis we look at asset class performance in the two calendar years after a recession ends.

A season for stock returns

Is there seasonality to equity market returns over time and, if so, is it repeatable, measurable, and significant? We turned to one of our favorite sources for market information, “The Stock Trader’s Almanac” to find the answers.

Tracking PMI data and forward equity returns

We believe real economic growth is likely to reach levels not seen in the United States since 1983–1984. Our best estimate is for real GDP to approximate 6.5% year-on-year growth in 2021.

What do yields reveal about inflation expectations?

Investors can monitor these relationships to understand the underlying drivers of nominal yields.

Growth, Value, and Recessions

What equity investment style performs best as the economy enters a recession?

A look at inflation and investment performance

Investors are concerned about rising inflation going forward. We researched recent history to better understand how different asset classes perform during periods of increasing core inflation as measured by the Personal Consumption Expenditure Core Price Index.

The January Barometer

Devised by Yale Hirsch in 1972, the January Barometer states that as the S&P 500 goes in January, so goes the year. The indicator has registered 10 major errors since 1950, for an 85.7% accuracy ratio.

U.S. dollar and trends in emerging markets

Studying market history may help provide a useful framework for investors as we navigate the recession of 2020. We looked back at the 5 recessions since 1980 as a guide.

Economic expansions and equity returns

What can history tell us about the length of economic expansions and recessions? And further, what can investors expect from the stock market during economic expansions?

Trends in small - and large-cap stocks during recessions

Studying market history may help provide a useful framework for investors as we navigate the recession of 2020. We looked back at the 5 recessions since 1980 as a guide.

Growth, Value, and Recessions

What style performs best as the economy enters a recession? What style performs best as the economy exits a recession?

S&P 500 Return Attribution

How have a handful of stocks impacted the year to date return of the S&P 500 index?