On the Markets

 

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.

Keep an eye on the situation as it unfolds with our latest news.

Nifty Fifty: The Fed Hikes Again
In this webcast, Professor Jeremy Siegel, Senior Investment Strategy Advisor to WisdomTree, Jeremy Schwartz, Global Chief Investment Officer, and Kevin Flanagan, Head of Fixed Income Strategy discuss the latest results of the May FOMC meeting and where monetary policy could be headed for the remainder of 2022.

2022 Economic and Market Outlook

2021 was a year of notable economic growth after unexpected change caused by the COVID-19 pandemic. In our Economic and Market Outlook for 2022, we lay out some of the “known unknowns” we believe could significantly affect the investing landscape and we dive into our thoughts covering:

  • Equities
  • Real assets and alternatives
  • Fixed income

 

Read the Market Outlook

Read Our Actionable Ideas

 

WisdomTree Office Hours

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.


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.

 

Read the Report

Commentaries from Our Thought Leaders

For more daily insights from our thought leaders, from macro commentary to helpful tips on trading ETFs in times of high volatility, visit our blog.

Actionable Ideas for 2022

We believe the following themes will be prevalent and there are actionable ideas to capitalize on them should you agree with our position.

U.S. Exposure
  • Rising rates poses risk to companies with negative earnings, leveraged balance sheets and/or distant cash flows.
  • An environment of elevated volatility favors stocks with solid earnings and strong margins.
  • Profitable small and mid caps are trading at the low end of their historic valuations and may be primed to stand strong in inflation.

Large Cap Investment Ideas:

Mid & Small Cap Investment Ideas:

Developed Markets Exposure
  • The forces of inflation and rising interest rates support equity screens for Quality and Value.
  • Stocks with strong profitability metrics are cheap relative to beta indexes. Though many major central banks may remain behind the curve relative to the Fed, we suspect a global rising rates regime will pose an obstacle to Developed Market stocks that have negative earnings or speculative characteristics.
  • Strong balance sheets and a sober approach to leverage seems prudent. The global energy crisis is most acute in Europe, which may be in recession already.

Actionable Investment Ideas:

Emerging Markets Exposure
  • Pay attention to campaign trail comments from both major U.S. political parties for a gauge of how a China containment strategy affects state-owned enterprises (SOEs).
  • The asset class offers cheap relative valuations, especially in the Value style box, which offers a built-in hedge to harrowing inflation via exposure to Energy and Basic Materials.
  • At 12.3, the forward P/E multiple of the MSCI Emerging Markets Index is about 7 P/E points lower than the S&P 500, near the largest discount since before the Global Financial Crisis. Some of our Value-oriented indexes trade on forward multiples in the single digits, despite profitability metrics that exceed the asset class as a whole.

Actionable Investment Ideas:

Fixed Income Exposure
  • The outlook for interest rates continues to remain poised for further upward pressure. Inflation remains at historically high levels and the Federal Reserve has only just begun the process of reversing the emergency monetary policy measures which were put in place to help offset any negative effects from the pandemic.
  • The Fed appears ready to ‘front-load’ rate hikes in the nearer-term, with 50bp moves seemingly being considered. Additional rate hikes should also be forthcoming during the second half of this year and into 2023.
  • Balance sheet run-off, or quantitative tightening ( QT), will also be utilized by the Fed to help in their fight against inflation. Based on recent comments from Fed officials, QT may occur “at a rapid pace”, which could push rates higher all along the Treasury yield curve.
  • Fixed coupon bonds, even in the short duration bucket, and inflation-linked bonds are vulnerable.
  • Treasury floating rate and zero duration strategies should be an active consideration.

  • Actionable Investment Ideas:

Basis Points Podcast with Kevin Flanagan