WisdomTree continues to listen closely to the advisor community and create new resources for advisors as well as all investors to provide the guidance they need to maneuver the daily market changes.
2023 Mid-Year Economic and Market Outlook
The economic and market landscapes continue to evolve, and we expect some significant changes as we make our way through the remainder of 2023. In our Mid-Year Economic and Market Outlook for 2023, we lay out some of the “known unknowns” we believe could significantly affect the investing landscape and dive into our thoughts covering:
- Real assets and alternatives
The Global Edge
Shaken, Not Stirred: The Impact from the Recent Banking Turmoil
What began as regional banking fear in the U.S. quickly spread to Europe. Two months later, the markets are still dealing with the fallout from bank runs and “walks,” whereby deposits flow out in search of better yields, not because of fear. In this edition of The Global Edge, our team of thought leaders explore the question of: how long can investors expect to see the potential ill effects from these developments as we move into the second half of the year?
Read the latest report
Watch the Office Hours Replay: June 6, 2023
Fed Watch: Can I See the Finish Line?
September 20, 2023
- Results of the September FOMC meeting.
- An in-depth overview of the Fed’s policy statement, updated projections, and Powell’s Presser.
- What investors should be expecting from US monetary policy for Q4.
Fixed Income Masterclass Highlight
In partnership with Asset TV, Kevin Flanagan participated on a Fixed Income Masterclass to discuss the current economic landscape in the money and bond markets. Watch this event highlight as Kevin discusses the evolving risks and opportunities impacting fixed-income investors today.
Click here to access the full on-demand replay, available for CE Credit through Asset TV.
Advisors can now join our thought leaders as they discuss current markets and actionable investment solutions. This small-setting format allows for advisors to ask questions and enter into a dialogue, leveraging our thought leadership to navigate the market uncertainty. The schedule is updated weekly.
3:00pm ET*Not available for CE Credit
1:00pm ET*Not available for CE Credit
1:00pm ET*Not available for CE Credit
1:00pm ET*Not available for CE Credit
2:00pm ET*Not available for CE Credit
4:00pm ET*Not available for CE Credit
1:00pm ET*Available for 1hr of CE Credit
2:00pm ET*Not Available for CE Credit
3:00pm ET*Not Available for CE Credit
4:00pm ET*Not Available for CE Credit
1:00pm ET*Not Available for CE Credit
The What’s Now Behind What’s Next:
Minds on the Markets
Week in and week out, our investment strategists Jeff Weniger and Kevin Flanagan, who live and breathe the market, translate the latest headlines, dissect the minutia of meeting minutes and break down the jargon to help inform your evolving investment decisions.
Actionable Ideas for 2023
The Decade of Dividends: U.S. Equities
Outlook: Our primary concern with regard to the S&P 500’s earnings outlook for 2023 is that banks are indicating a buttoning up of their lending standards, an occurrence that sometimes indicates corporate profit trouble. Nevertheless, the “bank walk,” whereby deposits flow out of banks due to sub-1% yields, has been more of a “bank crawl."
Stocks with exposure to AI have been dominating in 2023, but this may subside as the market digests the excitement. We believe a Value cycle kicked off during the 2022 broad market sell-off.
- What We Like: The market has been rallying since October 2022, yet valuations are more reasonable than they were before the market peaked in last year’s opening sessions. Still, we are concerned that some parts of the market are trading on hype, which may be fine in a zero percent bond market world…but not so much when overnight money yields 5%. Fortunately, skepticism abounds; memories of 2022’s wounds are still fresh, aiding a “wall of worry” thesis.
- What Could Go Wrong: The value cycle turns out to be just a value trade—a shorter term run for dividend concepts that ended last autumn. Additionally, continued levitation from zero-yielding Silicon Valley giants would be troublesome. This year has been horrible for value-oriented mandates, along with most everything that was not mega cap growth. Stocks that can demonstrate durable profitability and reasonable valuations were the type that held up during the 2022 sell-off; we suspect they are opportune in 2023’s second half.
The Decade of Dividends: International Developed Equities
Outlook: Like others, we are concerned that the war in Ukraine may not find resolution anytime soon. Nevertheless, we have eyes on two major components of developed market equity baskets—Britain and Japan—both of which are showing valuation appeal and potentially some newfound competitiveness because of the multi-year collapses in the British pound (GBP) and Japanese yen (JPY).
- What We Like: Many single-digit price-to-earnings multiples pervade across numerous developed nations. In terms of diversification, developed markets’ lighter exposure to Tech may round out a more even keel approach than allocations that are U.S.-heavy. Not yet appreciated by the market is the opening up of a large wage arbitrage between developed markets and the U.S. Americans find themselves with notably uncompetitive compensation dynamics relative to peers in Europe and developed Asia.
- What Could Go Wrong: An acceleration of the war in Eastern Europe, and/or the U.S.- and Swiss-centric bank headlines become more global. The Japanese bond market remains at risk amid continued central bank tightening elsewhere. Additionally, stickier inflation in Europe than in the US could upset visions of a quick resolution to that issue.
The Decade of Dividends: Emerging Markets Equities
Outlook: We continue to believe China is investable, though the central government’s further concentration of political power breeds risk in equities. However, there’s significant inefficiency in the market’s pricing of China risk; overreactions to both good and bad news are common. We continue to assess very low risk of U.S.-China conflict over Taiwan.
- What We Like: Many deep value and even quality-oriented value mandates have dividend yields that are near double digits. Emerging Markets Value is also contrarian play, owing to years of historical underperformance.
- What Could Go Wrong: China cozies up closer to Russia, Taiwan headline risk rattles markets, firm-specific risk in companies that have close ties to the Chinese Communist Party grab more attention and a possible continuing of tightening credit conditions.
Fixed Income: A Return to Normalcy
Outlook: During the first half of this year, fixed income markets have posted a moderate rebound from arguably their worst year on record in 2022. The era of negative and ‘zero’ interest rates appears to finally be a thing of the past. We expect rates to be ‘higher for longer’, with volatility continuing to remain a part of the broader bond market investment landscape.
This development has created an interesting phenomenon: there’s “income back in fixed income.”
- What We Like: Yields have risen to (normal) levels that a generation of advisors and investors have never seen before, returning fixed income to its more traditional role in portfolios.
- What Could Go Wrong: We could see no recession, with inflation remaining ‘sticky’. As a result, the Fed (global central banks) either continue to raise rates more than expected, or don’t cut them until mid to late 2024. Or we could see a deep recession where the U.S. economy (labor market) rolls over and the Fed cuts rates sooner than expected. Other concerns include geopolitical developments (such as Ukraine or a China/Taiwan escalation).