Explore our thinking about today's financial markets
Rising rates, inflation, and the future of "cash" in 401(k) plans
November 11, 2022
A recent podcast featured a conversation about the future of cash in 401(k) plans in the current environment.
How an active target-date strategy can navigate interest-rate risk
Active managers are in a unique position to manage risks in target-date strategies.
Are bonds too risky right now?
With historical context in mind, we argue that the fear surrounding rising rates and their impact on bonds and retirement portfolios is likely overblown.
The long-term investment case for stocks and bonds
A study of the long-term investment performance of stocks and bonds can offer insights for bond investors today.
Filtering target-date fund choices for retirement plans
Consider using a dynamic tool that can help retirement plan decision-makers sort and select a target-date fund based on their glide paths.
Why withdrawal risk matters in stable value funds
We believe that risk measurement in stable value funds is more complex than simply utilizing the methods applied to standard bond funds.
Expect a pause, not a pivot, as savings fuel spending
In the coming months, the Fed will not likely pivot, but pause and wait with a high level of rates for convincing signs of disinflation.
Rising rates, inflation, and the future of "cash" in 401(k) plans
A recent podcast featured a conversation about the future of cash in 401(k) plans in the current environment.
High job openings signal wage-price spiral
Limited labor supply, higher wages, and a high staff turnover seems to have initiated a wage-price spiral.
ESG: Hearing the signal above the noise
In our view, the best opportunities lie not at the extremes of ESG rhetoric, but at the heart of sustainability substance.
Stable value update
Amid widespread negative returns in 2022, one area generating positive total returns is in the capital preservation space, including stable value funds.
Slowing economic growth and fixed income performance
As a follow up to the piece we published in July that focused on decelerating economic growth and equity returns, we thought it made sense to look at how some fixed income sectors fared during the same periods. We researched this concept to better understand the historical relationship between an economic slowdown, credit spreads, and total returns.
What is the circular economy, and why is it important?
Adapting business models to be less resource intensive creates opportunity for environmental and economic benefit.
Retirement reform may come after November election
SECURE 2.0 is on the Senate’s agenda, while the industry continues to explore potential for greater customization in plan design.
Consumer sentiment and forward market performance
In light of decades-high inflation, the Federal Reserve tightening monetary policy, and concerns about an economic slowdown, U.S. consumer sentiment has plummeted.. This year, sentiment is historically low, according to the University of Michigan Survey of Consumers.
Covid-related labor imbalances complicate Fed's inflation fight
Demographic shifts and labor imbalances might have disturbed consumption-saving decisions that impact inflation.
Style and factor performance during economic deceleration
Investors are concerned about decelerating economic growth and what this could mean for future equity returns. We researched this question to understand the historical relationship between an economic slowdown, earnings degradation, and any subsequent style or factor performance.
How markets could react to Fed and ECB meetings
A mixed batch of inflation readings moved market expectations, but it is more important to remember the Fed’s inflation dashboard.
Cracks emerge in Europe's resilience
Recent economic data and the outlook for energy supplies are casting doubt on whether Europe has the resilience to withstand a recession.
A look at leveraged loans and CLOs
A recent Active Insights podcast features a discussion of leveraged loans, and collateralized loan obligations (CLOs).
U.S. recession ifs and whens
The U.S. will likely avoid a recession in 2022, in our view. That risk rises next year as the Fed raises rates and China decelerates.
Look beyond dividends for income from value investing
To build a value investment strategy, consider dividends in the context of overall income.
U.S. households and asset prices are at tipping point as Fed lifts rates
In a supply-constrained world, reducing asset prices may be the only way for central banks to bring demand and inflation lower.
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.
China sets ambitious growth target despite new lockdowns
China boosts fiscal spending to support its growth target in 2022 amid lockdowns in Shanghai and other cities.
Oil prices face downside risk
We expect oil prices to enter a correction stage and for Russia’s war in Ukraine to play less of a role in oil markets.
Market performance during Fed tightening cycles
In this analysis we assess asset class performance during prior cycles of Federal Reserve monetary tightening.
Russia-Ukraine War could slow global growth
The war and widespread sanctions will likely have a knock-on effect on economic growth, inflation, interest-rate policies, and the future of renewable energy.
War and inflation put bull market in hibernation
Investors may be underestimating the immense range of potential outcomes for the Russia-Ukraine War.
Oil prices may correct after sanctions-related spike
While the Ukraine conflict and sanctions on Russia have lifted oil prices higher, current prices may be temporary.
Teaming up on DX: A compelling investment opportunity
As businesses work at a faster pace to modernize their technology systems, compelling investment opportunities are emerging.
Emerging markets walk a fine line
Emerging market assets — especially currencies and bonds — have proved to be resilient amid the Russia-Ukraine conflict, rising interest rates and Omicron.
The outlook for stable value in a rising rate environment
With the Federal Reserve likely to raise the federal funds rate multiple times during 2022, it is worth considering the potential impact on a range of fixed income investments.
Oil: From sizzle to fizzle
Oil prices have rocketed to seven-year highs. But we have a bearish view because current prices are unsustainable.
Precautionary stockpiling and its impact on growth
Companies are buying raw and intermediate goods at a record pace, which will influence economic growth in 2022.
Finding growth potential in unexpected places
For franchised U.S. auto dealers, consolidation and the e-commerce imperative could mark the biggest changes to the industry’s structure, possibly ever.
Help plan sponsors with the labor crunch
Facing the challenges of a labor crunch, employers may want to consider how workplace savings can help boost recruiting efforts.
How could the yield curve impact risk assets in 2022?
The Fed's policy changes will have implications for the U.S. Treasury market and other financial assets.
The Fed’s conundrum — $7 lattes, $5 gas, 0% interest rates
We believe the Fed is likely behind the curve in containing inflation with ultra-low interest rates.
Risk managers: Essential partners for delivering performance
A successful risk team is one that can analyze multiple measures of risk and work with investment teams before trades are executed to capture alpha.
$100 oil may be a pipe dream
Oil prices have risen to multi-year highs on surging demand, tight supply, and the crunch on natural gas. We believe it is time to question the current rally.
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.
Consider convertibles to hedge against the risk of rising interest rates
The potential for rising interest rates may mean it's time to diversify a portfolio with convertibles.
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.
Consider stable value funds for DC plans
For retirement plan sponsors, choosing a capital preservation option can be challenging. We offer insights about stable value funds and their performance.
Taking a fiduciary view on target-date selection
It is important for a fiduciary to understand glide path features and how these features are combined in target date fund selection.
Inflation risk for retirement savers calls for an active approach
With inflation on the rise in 2021, we explain our analysis of long-term inflation hedges and why we favor more dynamic strategies.
Don't overlook international small caps
When focused on diversification one asset class that is often overlooked is non-U.S. small-caps.
Time-as-a-Service, anyone?
The evolution of time-as-a-service illustrates the changing nature of economic moats, competitive advantages that protect a company’s market share.
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.
China technology stocks in a reboot, not a shutdown
China’s technology sector has cratered since February and we view the selloff as a buying opportunity in China tech.
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.
Clean energy: Myths, reality, and opportunities
We believe many companies are poised to benefit significantly from the big shift toward renewable energy.
Company diversity and social justice
Company diversity is a step toward equity and equity is a step toward inclusion, which is important to company success.
Tapping into the growth potential of small-cap stocks
Investors may want to consider the potential of small-cap stocks as they review allocations amid changing economic cycles.
With people saving more, it may be time for a 401(k) reset
During the pandemic, workers for a time saved more than ever before, which could represent an opportunity for a 401(k) reset.
China leads, other emerging markets lag
China is leading the economic recovery among emerging-market countries, buoyed by stimulus and stringent COVID-19 measures.
U.S. economy remains a centerpiece in 2020 vote
Fiscal policy will be a key focus for investors after the November election.
The future is happening faster now
We rarely see as much disruption as we have seen in 2020, and we believe this offers investment opportunities.
Perspective on keeping perspective
Five months into our pandemic environment, financial professionals are looking for ways to keep their work in perspective.
Deglobalization creates new winners in China
The trade war, pandemic, and the Made in China 2025 initiative are resulting in a deglobalization trend and opportunities in China.
Staying at home increases spending on homes
As the economy continues to be challenged by the COVID-19 pandemic, we are seeing two notable trends in the U.S. housing industry.
V-shaped recovery proving elusive
The U.S. and global economic recoveries are unlikely to be “V-shaped” as businesses and consumers remain wary of returning to pre-pandemic behavior.
Vaccine is a wild card for the economy
A vaccine for the coronavirus will be supportive of risky assets even if the economic benefits take longer to materialize.
The role of asset allocation in glide path selection
Knowing the investments and how they are combined in a glide path is crucial in target-date fund selection.
Disruptive change: A growth driver for small companies
Disruptive change is often the force that enables small companies to compete against their larger peers.
Navigating market turmoil: Our intrinsic value compass
Our investments in the communications sector help illustrate our intrinsic value approach to finding opportunities.
Sustainability research: A week in the life of our team
Our research includes discussions with company managements, other researchers and investors, industry and subject experts, and non-profit organizations.
Behavioral shifts bring investment opportunities
Many businesses that have been resilient and strong during the COVID-19 crisis are likely to become even stronger in the aftermath.
Coronavirus tests limits of U.S. stimulus plans
The coronavirus pandemic is testing the limits of fiscal and monetary policy responses from Congress and the Federal Reserve to boost the economy and calm financial markets.
Sustainable value: Gender diversity on corporate boards
Diversity in companies — including gender diversity — can have a positive impact on company performance and strategic ability.
What’s next for the hard-hit financials sector?
The financials sector has been among the hardest hit from the COVID-19-induced equity market selloff, but there are reasons for optimism.
ESG issues alive in healthcare
Our team analyzes medical costs and access as ESG issues affecting human well-being and sustainable economic development.
Perspectives on COVID-19
Putnam’s health-care analysts and portfolio managers offer their outlooks and perspectives on key aspects of the COVID-19 pandemic.
Oil’s wild ride and what lies ahead
Demand for oil has collapsed as the coronavirus pandemic devastates the global economy and curbs much of the need for fuel from companies and consumers.
Navigating bond yields
The trajectory of bonds yields will depend on the Federal Reserve's policies and fiscal stimulus amid a sharp global economic downturn.
Investing for growth in volatile markets
Putnam portfolio managers discuss managing risk and finding investment opportunities in challenging markets.
Help plan sponsors be strategic fiduciaries
As companies react to the economic shock, advisors can offer ideas to help plan sponsors in their role as strategic fiduciaries for their 401(k) plans.
Social distancing generates recession
A recession is looming in the United States as COVID-19 and social distancing take a toll on economic activity.
Manager insights: Bulls, bears, and bond markets
With the extreme swings in the market over the last few weeks, several of Putnam’s senior fixed-income managers shared their insights on the bond markets.
Equity opportunities in challenging markets
Putnam’s equity investment professionals recently discussed market conditions, their strategies, and their outlooks.
Recessions and the equity market: A framework for investors
In these days of significant market volatility, investors are looking for a framework.
Stable value as an option for DC plans
We outline key considerations for DC plan sponsors considering stable value funds as a capital preservation option.
The Fed reacts to coronavirus economic risks
The Fed made a proactive move to reduce the federal funds rate by 50 basis points.
The impact of coronavirus on markets
The spread of coronavirus infections is having an impact on China’s GDP and on financial market sentiment worldwide.
The SECURE Act opens a new frontier for 401(k)s
The SECURE Act represents significant changes to retirement savings and could drive a expansion of workplace retirement savings plans including 401(k)s.
Solutions to antibiotic resistance
As the focus on natural ingredients intensifies, so has concern about antibiotic use in food production.
SECURE Act expands access to retirement plans
The SECURE Act of 2019 makes many changes to rules governing retirement savings including provisions to expand access to retirement plans.
Millennial money drives 401(k) plan evolution
Growing in number, the Millennial generation is having an impact on the evolution of 401(k) plan design.
Why stable value funds deserve a closer look
Capital preservation strategies are not all alike, and plan sponsors need to carefully evaluate the options including money. market and stable value funds.
Linking impact and performance
Often, the same elements that create environmental and social benefits are driving positive financial performance.
Engaging with allies to advance sustainable investing
We collaborate with institutions to examine and understand the financial impacts of sustainability.
To reduce employee stress, increase wellness
By offering financial wellness programs in the workplace, employers may help employees reduce money-related stress.
Talking sustainability with CEOs
We have ongoing dialogue with the management teams of companies in which we invest, across a wide range of sustainability-related topics.
Employers add student loan aid to retention toolkit
College debt set a record high this year and many employers have added student loan aid to their benefit offerings to attract and retain workers.
The SECURE Act: Completing an unfinished masterpiece
Congress is considering the SECURE Act, which would enhance workplace retirement savings plans and extend access to millions of workers.
The 3 Rs of a retirement plan
It is important to consider whether your retirement plan is on track to help meet the goals of retirement, recruitment, and retention.
A success score for the 401(k)
A traditional gauge of success for the 401(k) measures inputs, but companies also need to track outcomes to determine if a plan is successful.
Actively targeting inflation risk for retirement savers
We explain why a dynamic approach to hedging inflation risk in a target-date fund may be a better way to protect a retirement nest egg.
Investing for impact | Q&A with Stephanie Henderson
A member of Putnam's sustainable investing team describes her motivations for spreading ESG fluency throughout the firm to enhance fundamental insights.
The views and opinions expressed are those of the speaker, are subject to change with market conditions, and are not meant as investment advice.