Year-End 2021 Review and Outlook for 2022

Stocks fell on Thursday morning on continued concerns about slowing economic growth and potentially higher corporate tax rates. The Commerce Department reported that August retail sales rose by 0.7% after a downwardly revised 1.8% drop in July. Economists were looking for a 0.7% drop, according to Bloomberg data. In other news, jobless claims rose 20,000 to 332,000. The Dow fell 0.6%, the S&P declined 0.6%, and the Nasdaq was down 0.6%. Crude oil traded near $72 per barrel, while gold fell $41 to $1754 per ounce.

Stocks rose modestly on Thursday morning following new weekly employment data. The Labor Department said that first-time claims for state unemployment benefits fell to 364,000 for the week ended June 26, down from 415,000 a week earlier and below the Bloomberg consensus of 388,000. On the earnings front, Walgreen shares fell despite stronger-than-expected fiscal 3Q results and an increase in management's full-year earnings forecast. The Dow rose 0.2%, the S&P rose 0.3%, and the Nasdaq was flat. Crude oil rose more than 2% to $75 per barrel, while gold traded near $1777 per ounce.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years as the endless speculation over the direction of rates has created market-timing headaches. Investors have endured wide swings in prices for rate-sensitive equity sectors such as utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this segment for U.S. investors.

Stocks fell on Monday morning, giving up some of their recent gains, as investors awaited earnings reports from a range of major companies. Coca-Cola shares rose after the company posted better-than-expected first-quarter sales and earnings and said that case volume had returned to 2019 levels. Tesla shares fell sharply after two people died in the crash of a vehicle that appears to have been using the company's autonomous driving software. The Dow fell 0.5%, the S&P 0.5%, and the Nasdaq 0.8%. Crude oil traded near $63 per barrel, while gold fell $7 to $1774 per ounce.

We recently raised our rating on the Communication Services sector to Over-Weight. In this barbell sector, media and entertainment companies should benefit from robust online activity and the reopening of theme parks and movie theaters. Providers of telecom services should benefit from ARPU gains as the 5G rollout gains traction. The style mix of the sector is approximately one-third value and two-thirds growth. The adjusted pro-forma beta is approximately 1.1 (like the old telecoms), while the yield is 0.9% (reflecting the impact of Google and Facebook). The smoothed growth rate is 7% and the P/E ratio is 21x. The sector accounts for 11% of the S&P 500. We think investors should consider allocating 12%-14% of diversified portfolios to the sector. Here are some of our top picks.

Stocks rose strongly on Wednesday morning ahead of the inauguration of Joseph R. Biden as the nation's 46th president. President Biden enters the White House facing the twin crises of the pandemic and a battered economy, and is expected to move quickly on new stimulus measures and other initiatives. He will also sign a wide range of executive orders reversing Trump administration policies on his first day in office. The Dow rose 0.6%, the S&P 1.1%, and the Nasdaq 1.7%. Crude oil traded near $53.50 per barrel, while gold rose $16 to $1856 per ounce.

Our rating on the Communication Services sector is Over-Weight. While existing pressures on the sector continue, including assaults by regulators on social media companies and intense competition among telecom companies, these concerns have been superseded by COVID-19. In this "barbell" sector, telco giants Verizon and AT&T are now apparent islands of relative stability and secure income. Simultaneously, internet giants Alphabet and Facebook are acting as forums for community concerns about the coronavirus. The style mix of the sector is approximately one-third "value" and two-thirds "growth." The adjusted pro-forma beta is approximately 1.0 (like the old Telecoms), while the yield is 0.9% (reflecting the impact of Google and Facebook). The smoothed growth rate is 7% and the P/E ratio is 21-times. The sector accounts for 11% of the S&P 500. We think investors should consider allocating 12%- 14% of their diversified Portfolios to the sector. Here are some of our top picks.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this segment for U.S. investors. One is a more robust selection of high-quality names. Yields also tend to be higher in overseas markets in general. And finally, valuations can be more attractive.

Stocks gave up early gains on Wednesday morning following disappointing business activity data. IHS Markit said that its U.S. Composite Purchasing Managers' Index fell to 54.4 in September from 54.6 in August, with gains in manufacturing offset by a decline in services. On the positive side, Nike posted strong fiscal 1Q earnings, driven by more than 80% growth in digital sales. Johnson & Johnson also announced the start of a Phase 3 trial of its single-dose coronavirus vaccine candidate. The Dow fell 0.4%, the S&P 0.8%, and the Nasdaq 1.3%. Crude oil traded near $40 per barrel, while gold fell $39 to $1869 per ounce.

Stocks gave up early gains on Wednesday morning following disappointing business activity data. IHS Markit said that its U.S. Composite Purchasing Managers' Index fell to 54.4 in September from 54.6 in August, with gains in manufacturing offset by a decline in services. On the positive side, Nike posted strong fiscal 1Q earnings, driven by more than 80% growth in digital sales. Johnson & Johnson also announced the start of a Phase 3 trial of its single-dose coronavirus vaccine candidate. The Dow fell 0.4%, the S&P 0.8%, and the Nasdaq 1.3%. Crude oil traded near $40 per barrel, while gold fell $39 to $1869 per ounce.

Stocks were mixed on Tuesday morning ahead of the June Federal Reserve meeting, as investors awaited the Fed's latest policy statement and economic outlook on Wednesday. Airline stocks pulled back after a strong multiday rally, while Macy's rose after the retailer said that reopened stores were performing better than expected. The Dow fell 0.8%, the S&P fell 0.6%, and the Nasdaq rose 0.3%. Crude oil traded near $38 per barrel, while gold rose $18 to $1724 per ounce.

Stocks were mixed on Tuesday morning ahead of the June Federal Reserve meeting, as investors awaited the Fed's latest policy statement and economic outlook on Wednesday. Airline stocks pulled back after a strong multiday rally, while Macy's rose after the retailer said that reopened stores were performing better than expected. The Dow fell 0.8%, the S&P fell 0.6%, and the Nasdaq rose 0.3%. Crude oil traded near $38 per barrel, while gold rose $18 to $1724 per ounce.

We recently raised our rating on the Communication Services sector to Over-Weight from Market-Weight. While existing pressures remain, including assault by regulators on social media companies and intense competition among telecom companies, these concerns have been superseded by COVID-19. In this "barbell" sector, telco giants Verizon and AT&T are now apparent islands of relative stability and secure income. Simultaneously, internet giants Alphabet & Facebook are acting as forums for community concerns around the coronavirus outbreak. Given the lack of historical performance data for the new sector, S&P Dow Jones Indices performed pro-forma back-testing over a 10-year period to determine the general characteristics of the new sector. The style mix is approximately one-third "value" and two-thirds "growth," while the predecessor Telecom sector was 100% value. The adjusted pro-forma beta is approximately 0.8 (like the old Telecoms), while the yield is 0.9% (reflecting the impact of Google and Facebook). The smoothed growth rate is 8% and the P/E ratio is 19.6x. The sector accounts for 10.6% of the S&P 500. We think investors should consider allocating 12%-14% of their diversified Portfolios to the sector.

Toward the end of the March 20 trading week, the DJIA experienced a 'death cross,' meaning the 50-day SMA fell down through the 200-day moving average. In the current millennium, when the market experiences a death cross, it is often -- though not always -- closer to the bottom than to embarking on another major new downleg.

Toward the end of the March 20 trading week, the DJIA experienced a 'death cross,' meaning the 50-day SMA fell down through the 200-day moving average. In the current millennium, when the market experiences a death cross, it is often -- though not always -- closer to the bottom than to embarking on another major new downleg.

Orange is the incumbent telephone operator in France, which accounts for about 44% of the firm's sales. French revenue is split among wireless (20%), fixed-line (53%), converged services (25%) and other services. By country, Spain (13%) and Poland (6%) are the firm’s next highest revenue generators. Consumer services in other countries account for about 20% of total revenue, while Orange Business Services also supplies 17% of sales. The firm has acquired Orange Bank as a means of expanding financial services into France and other European countries, drawing on its long experience in offering financial services in Africa.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In 2018, the Federal Reserve embarked on an aggressive campaign to raise interest rates -- causing Treasury yields to swoop and dive, resulting in a wild ride for supposedly stable U.S. high-income equities. In 2019, the Fed lowered rates, in order to restore a normal upward slope in the yield curve. And in 2020, global investors, fearing the spread of the coronavirus, have pushed rates lower still. The endless speculation over the direction of rates has created market-timing headaches for equity income investors. They have endured wide swings in prices for rate-sensitive equity classes such as utilities, REITs and MLPs -- even as generally positive industry fundamentals remained largely intact. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also many positives in this asset class for U.S. investors.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In 2018, the Federal Reserve embarked on an aggressive campaign to raise interest rates -- causing Treasury yields to swoop and dive, resulting in a wild ride for supposedly stable U.S. high-income equities. In 2019, the Fed lowered rates, in order to restore a normal upward slope in the yield curve. And in 2020, global investors, fearing the spread of the coronavirus, have pushed rates lower still. The endless speculation over the direction of rates has created market-timing headaches for equity income investors. They have endured wide swings in prices for rate-sensitive equity classes such as utilities, REITs and MLPs -- even as generally positive industry fundamentals remained largely intact. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also many positives in this asset class for U.S. investors.

Stocks gave up early gains on Wednesday morning following disappointing business activity data. IHS Markit said that its U.S. Composite Purchasing Managers' Index fell to 54.4 in September from 54.6 in August, with gains in manufacturing offset by a decline in services. On the positive side, Nike posted strong fiscal 1Q earnings, driven by more than 80% growth in digital sales. Johnson & Johnson also announced the start of a Phase 3 trial of its single-dose coronavirus vaccine candidate. The Dow fell 0.4%, the S&P 0.8%, and the Nasdaq 1.3%. Crude oil traded near $40 per barrel, while gold fell $39 to $1869 per ounce.

Stocks were mixed on Tuesday morning ahead of the June Federal Reserve meeting, as investors awaited the Fed's latest policy statement and economic outlook on Wednesday. Airline stocks pulled back after a strong multiday rally, while Macy's rose after the retailer said that reopened stores were performing better than expected. The Dow fell 0.8%, the S&P fell 0.6%, and the Nasdaq rose 0.3%. Crude oil traded near $38 per barrel, while gold rose $18 to $1724 per ounce.

Toward the end of the March 20 trading week, the DJIA experienced a 'death cross,' meaning the 50-day SMA fell down through the 200-day moving average. In the current millennium, when the market experiences a death cross, it is often -- though not always -- closer to the bottom than to embarking on another major new downleg.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In 2018, the Federal Reserve embarked on an aggressive campaign to raise interest rates -- causing Treasury yields to swoop and dive, resulting in a wild ride for supposedly stable U.S. high-income equities. In 2019, the Fed lowered rates, in order to restore a normal upward slope in the yield curve. And in 2020, global investors, fearing the spread of the coronavirus, have pushed rates lower still. The endless speculation over the direction of rates has created market-timing headaches for equity income investors. They have endured wide swings in prices for rate-sensitive equity classes such as utilities, REITs and MLPs -- even as generally positive industry fundamentals remained largely intact. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also many positives in this asset class for U.S. investors.

The major indices are up slightly at midday on Tuesday amid continued trade deal optimism after positive comments from both the U.S. and Chinese sides. On the earnings front, Best Buy shares rose more than 10% following strong fiscal 3Q results and higher full-year guidance, while Dollar Tree fell nearly 16% after below-consensus earnings and lower 4Q guidance. The Dow, the S&P, and the Nasdaq were all up about 0.2%. Crude oil rose to about $58 per barrel, while gold traded near $1459 per ounce.

The major indices are up slightly at midday on Tuesday amid continued trade deal optimism after positive comments from both the U.S. and Chinese sides. On the earnings front, Best Buy shares rose more than 10% following strong fiscal 3Q results and higher full-year guidance, while Dollar Tree fell nearly 16% after below-consensus earnings and lower 4Q guidance. The Dow, the S&P, and the Nasdaq were all up about 0.2%. Crude oil rose to about $58 per barrel, while gold traded near $1459 per ounce.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this segment for U.S. investors. One is a more robust selection of high-quality names. Yields also tend to be higher in overseas markets in general. And finally, valuations can be more attractive.

The stock market remains inexorably tied to the trade war. Of late, China's state council said it would impose tariffs ranging from 5% to 10% on an additional $75 billion in U.S. imports. The U.S. responded with fresh tariffs, a week after the White House promised to save Christmas by forgoing tariffs on popular consumer electronics. Government officials also ordered U.S. companies to look for alternative supply chains and manufacturing sites outside China. After all that, new U.S./China talks were said to be planned -- but even so, it was clear that the U.S. position on any future talks was different than that of China.

The stock market remains inexorably tied to the trade war. Of late, China's state council said it would impose tariffs ranging from 5% to 10% on an additional $75 billion in U.S. imports. The U.S. responded with fresh tariffs, a week after the White House promised to save Christmas by forgoing tariffs on popular consumer electronics. Government officials also ordered U.S. companies to look for alternative supply chains and manufacturing sites outside China. After all that, new U.S./China talks were said to be planned -- but even so, it was clear that the U.S. position on any future talks was different than that of China.

We recently raised our rating on the Communication Services sector to Over-Weight from recommended Market-Weight. Investors are becoming more comfortable with the barbell shape of the new sector, featuring slow-growth, high-yield telecoms on one end and fast-growth, no-yield internet companies on the other. On one end of the barbell, domestic telcos sell services rather than goods and have limited overseas exposure. And telcos should begin to benefit from 5G traffic across their networks in the coming year. At the other end, we see improved prospects for internet companies - also selling services, not goods - as they move beyond privacy and data misuse issues. Given the lack of historical performance data for the new sector, S&P Dow Jones Indices performed pro-forma back-testing over a 10-year period to determine the general characteristics of the new sector. The style mix is approximately one-third "value" and two-thirds "growth," while the predecessor Telecom sector was 100% value. The adjusted pro-forma beta is approximately 1.1, compared to 0.7 for Telecom Services. The yield is 0.7%, the smoothed growth rate is 9% and the P/E ratio is 18.4x. The sector accounts for 10.5% of the S&P 500. We think investors should consider allocating 12%-14% of their diversified portfolios to the sector.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. The Federal Reserve in 2018 embarked on an aggressive campaign to raise interest rates, causing Treasury yields to swoop and dive, resulting in a wild ride for supposedly stable U.S. high-income equities. The endless speculation over the timing of the Fed's rate hikes created market-timing headaches for equity income investors. They endured wide swings in prices for rate-sensitive equity classes such as utilities, REITs and MLPs - even as generally positive industry fundamentals remained largely intact. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to the Fed's head fakes on rate policy. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also lots of positives in this asset class for U.S. investors.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. The Federal Reserve in 2018 embarked on an aggressive campaign to raise interest rates, causing Treasury yields to swoop and dive, resulting in a wild ride for supposedly stable U.S. high-income equities. The endless speculation over the timing of the Fed's rate hikes created market-timing headaches for equity income investors. They endured wide swings in prices for rate-sensitive equity classes such as utilities, REITs and MLPs - even as generally positive industry fundamentals remained largely intact. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to the Fed's head fakes on rate policy. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also lots of positives in this asset class for U.S. investors.

Stocks wrapped a positive week on June 7 with a 'bad news is good news' rally. The bad news was a puny 75K gain in May nonfarm payrolls, and jobs shaved off April and March. The corollary goods news was a (perceived) increased likelihood that the Fed will reverse course and cut rates, perhaps as soon as this summer.

Stocks wrapped a positive week on June 7 with a 'bad news is good news' rally. The bad news was a puny 75K gain in May nonfarm payrolls, and jobs shaved off April and March. The corollary goods news was a (perceived) increased likelihood that the Fed will reverse course and cut rates, perhaps as soon as this summer.

Stocks were mixed on Tuesday morning amid new consumer price data that showed muted inflation. The Labor Department said that the core CPI, excluding food and energy, rose just 0.1% in February, down from 0.2% in January and below the Reuters consensus forecast of 0.2% growth. The core CPI also rose 2.1% from the prior year. The S&P and the Nasdaq rose 0.5%, while the Dow, weighed down by Boeing, fell 0.2%. Crude oil rose slightly to about $57 per barrel, while gold traded near $1298 per ounce.

Stocks were mixed on Tuesday morning amid new consumer price data that showed muted inflation. The Labor Department said that the core CPI, excluding food and energy, rose just 0.1% in February, down from 0.2% in January and below the Reuters consensus forecast of 0.2% growth. The core CPI also rose 2.1% from the prior year. The S&P and the Nasdaq rose 0.5%, while the Dow, weighed down by Boeing, fell 0.2%. Crude oil rose slightly to about $57 per barrel, while gold traded near $1298 per ounce.

The stock market remains inexorably tied to the trade war. Of late, China's state council said it would impose tariffs ranging from 5% to 10% on an additional $75 billion in U.S. imports. The U.S. responded with fresh tariffs, a week after the White House promised to save Christmas by forgoing tariffs on popular consumer electronics. Government officials also ordered U.S. companies to look for alternative supply chains and manufacturing sites outside China. After all that, new U.S./China talks were said to be planned -- but even so, it was clear that the U.S. position on any future talks was different than that of China.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. The Federal Reserve in 2018 embarked on an aggressive campaign to raise interest rates, causing Treasury yields to swoop and dive, resulting in a wild ride for supposedly stable U.S. high-income equities. The endless speculation over the timing of the Fed's rate hikes created market-timing headaches for equity income investors. They endured wide swings in prices for rate-sensitive equity classes such as utilities, REITs and MLPs - even as generally positive industry fundamentals remained largely intact. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to the Fed's head fakes on rate policy. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also lots of positives in this asset class for U.S. investors.