Tune In

The corporate earnings season for the first quarter is nearly complete, and investors appear focused on these earnings announcements even more than usual due to ongoing economic uncertainty amid high inflation, slower growth, and the banking crisis. In this context, corporate profitability can shine a spotlight on how companies, sectors, and the broader economy are truly faring in this environment. Further, focusing on earnings trends is a way to cut through the day-to-day noise of the stock market and news headlines.

The repercussions of inflation, Fed rate hikes, the ongoing banking crisis, and the approaching debt ceiling deadline are cascading throughout the financial system. One area directly impacted by these shocks is real estate across both the residential and commercial sectors. Commercial real estate (CRE), in particular, is highly dependent on regional and smaller banks, including those that have struggled or failed since early March. Some investors and economists are concerned about what this might mean for the broader economy in the coming months.

The federal debt limit is once again in the news as the country rapidly approaches a critical deadline on June 1. Investors are understandably nervous about Washington failing to reach an agreement, a possibility that both sides agree would be a self-inflicted catastrophe. While it's unclear how this will play out in the coming weeks, the fortunate news is that financial markets are mostly taking these events in stride. How can investors maintain the right perspective around political and fiscal uncertainty?

Monday morning, it was announced that the FDIC had taken over First Republic Bank and sold it to JPMorgan Chase. Eleven major banks had previously infused First Republic with $30 billion in deposits to stabilize the bank after the failures of Silicon Valley Bank, Signature Bank, and Credit Suisse. This process found new urgency over the past week when First Republic revealed that uninsured deposits at the bank fell $100 billion in the first quarter. So, this deal has been in the making for several days, with a few large banks bidding on First Republic's deposits and assets. With ongoing banking turmoil creating market and economic uncertainty, how can long-term investors navigate the months ahead?

The U.S. dollar has been in the headlines due to an anticipated pause in Fed policy and concerns over the currency's place in the global financial system. However, to borrow Mark Twain's famous line, reports of the dollar's death are greatly exaggerated. While the role of the dollar has declined by some measures over the past two decades, fears of the dollar's demise are not new among investors and economists. What does the dollar's role mean for investors going forward?

There is an old saying that happiness equals reality minus expectations, and this is particularly relevant when it comes to financial planning and investing during times of great uncertainty. For investors, having unrealistic short-term expectations of investment returns and financial outcomes, as many often do in the late stages of bull markets and during asset bubbles, can lead to discouragement. Instead, history shows that by maintaining perspective and focusing on aspects within their control, investors can set appropriate expectations and position themselves to achieve financial goals.

The banking crisis that began in the U.S. has now spread to Europe. Recent concerns over the solvency of Credit Suisse, Switzerland's second largest "global systemically important bank" (G-SIB), were due in no small part to the runs on U.S. banks. What made Credit Suisse vulnerable was that reputational and financial difficulties had plagued it over the past decade, including problems with its financial reporting, exposure to the failed companies Archegos and Greensill, and a criminal conviction over money laundering, to name a few. At the time of writing, UBS has agreed to buy Credit Suisse in a $3 billion deal brokered by regulators, hearkening back to JPMorgan's takeover of Bear Stearns in 2008. The situation is still evolving, and in the U.S., regulators continue to monitor banks for signs of contagion.

The recent failure of three U.S. banks has raised concerns over the economy and financial system. The situation is still evolving, and there is plenty of speculation about what might come next. One recent development is that government officials from the Treasury, Federal Reserve, and FDIC have announced that depositors will be made whole in an effort to backstop the system and restore confidence. This crisis has already created hardship for many companies and individuals as payrolls are disrupted and access to cash is halted. However, when it comes to investing, it's more important than ever to stay levelheaded and focus on the big picture. What should long-term investors know about these bank failures, and what do they reveal about the financial system?

The U.S. population, like those of many developed countries, is aging. According to the latest Census figures, a major shift occurred over the past two decades in which the share of the population under 50 declined, especially among those of prime working age. Even the youngest baby boomers are nearing retirement age, while the oldest are almost 80. And while millennials have come of age and now outnumber boomers, that hasn't been enough to prevent the average age in the U.S. from shifting from 35.4 in 2000 to 38.8 today. What could these trends mean for the economy and markets in the future?

Stock market volatility has once again picked up as recent economic data have led markets to reverse course after a strong start to the year. While investors have grown accustomed to daily swings, it's still important to remember that stock market fluctuations are unavoidable. After all, it's the willingness and ability to withstand pullbacks in the short run that allows investors to be rewarded in the long run. During periods of uncertainty, understanding the underlying trends driving markets can help investors to maintain perspective.