What Investors Should Know About This Year’s Russell Reconstitution
Every year, FTSE Russell reconstitutes its U.S.-focused family of indices to more accurately reflect current market conditions. Although initial public offerings can be added to these indices on a quarterly basis, this annual refresh is a much more comprehensive effort with significantly greater impact on the market. Changes in market capitalization, sector weightings, and style […]
The Fed Speaks: ‘A Mid-Cycle Adjustment to Policy’
The U.S. economy continued its now-record expansion in the second quarter with a 2.1% gain in GDP, slower than the robust 3.1% in the first quarter but well ahead of expectations. Consumer spending rose 4.3% in the quarter, supported by solid gains in the job market and disposable income growth of 5% in each of […]
Quarterly Results for Institutional Investors Reflect the Initial Impact of the Pandemic
Four of the primary types of institutional investors (public and corporate defined benefit (DB) plans; nonprofits; and Taft-Hartley plans) experienced sharp declines in the first quarter and smaller drops for the 12 months ending March 31. A quarterly rebalanced 60% S&P 500/40% Bloomberg Barclays Aggregate portfolio declined 10.9% during the quarter and 0.4% over the […]
Why Bankruptcies by States Are Unlikely
Senate Majority Leader Mitch McConnell’s comments that he would favor allowing states to declare bankruptcy rather than receive aid from the federal government led to questions about the impact on state finances and the municipal bond market. Based on input from managers, this is an unlikely scenario. Here’s a brief summary of the important points […]
Toughest Quarter Since GFC for Real Assets
Real asset returns were significantly challenged during the first quarter of 2020, March in particular, as almost the entire space (except gold and TIPS) experienced performance not seen since the Global Financial Crisis. The MLP space (Alerian MLP Index: -57%) and energy-related stocks (S&P 1200 Energy Index: -44%) were among the worst hit as Russia […]
Fed Sends Strong Message, but More Needed
On Sunday, the U.S. Federal Reserve announced several measures intended to provide liquidity and restore confidence in the markets: An emergency rate cut: Fed Funds Rate was cut 100 bps to 0.00% to 0.25%. The Fed is committed to keeping rates at the zero lower bound until “it is confident that the economy has weathered […]
Behind Our 2020-2029 Capital Market Assumptions
Callan develops long-term capital market assumptions at the start of each year, detailing our expectations for return, volatility, and correlation for broad asset classes. These projections represent our best thinking regarding a longer-term outlook and are critical for strategic planning as our investor clients set investment expectations over five-year, ten-year, and longer time horizons. Our […]
Impact of the Coronavirus on Markets: The Long-Term View
Markets continue to be roiled by the worsening news of the coronavirus outbreak around the world. The steep decline of the past week occurred more than a month after news of the virus first surfaced, as investors initially priced-in virus containment to China. But new reports of the virus spreading to 48 countries dimmed hopes […]
Assessing the Impact of the Coronavirus for Institutional Investors
The fast-moving coronavirus outbreak and the even faster-moving equity market response to the uncertainty present a significant downside risk to the global economic outlook. Callan does not have anything to say about the epidemic itself, and a lot of great research has already come out from the asset management community. What we can offer is […]
The Most Anticipated Recession in History Fails to Materialize
View PDF Real GDP grew at 2.1% for the fourth quarter of 2019, capping off a year pretty much no one anticipated for growth or the capital markets. GDP growth for the year came in at 2.3%, unemployment fell to yet another generational low, wages and incomes continued to show robust gains, and yet inflation […]