See all our latest ISO updates below.

2018 Year Ahead: The Next Great Odyssey Ten Years Gone

The best thing for anyone to do in 2018 is to maintain discipline as an investor.
Christopher Hyzy
Chief Investment Officer, U.S. Trust

We're now in the second-longest bull market in stocks in history—and there's growing speculation it could be running out of steam. But if the earnings for companies in the S&P 500 expand in 2018, and if interest rates don't rise too much and stay near their historic lows, we think the equity market can continue to advance.

Corporate earnings have been a lot stronger than the market anticipated, and we believe they can remain strong as we move into 2018. The anticipated tax cuts only increase the likelihood that earnings will rise.

Another powerful force supporting further gains is technology. Today we're in a new digital era, and that has launched technology into a leadership position in the stock market. And what we're seeing now is very different than what happened in 2000, when tech stocks were about to fall. The excitement then was about the early hints of what advances in innovation might do. Now, we feel technology's impact constantly—it's woven into our daily lives and it's improving how businesses operate, so technology should help the bull market continue.

We also expect other cyclical sectors, including industrials and materials, to benefit from the strength in the global economy, along with any large-scale infrastructure spending here in the U.S.

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2017 Mid-Year ISO: The Tortoise and the Hare Cycle

As the cycle advances we still believe a 'grind it out' atmosphere prevails with both longer-dated yields and equity prices grinding higher.
Christopher Hyzy
Chief Investment Officer, U.S. Trust

As we close out the first half of 2017, global equity markets are hovering around record highs, long-term bond yields have been stuck in a low range, the dollar is currently stable to slightly weaker than expected, inflation is now below the target rate, asset price volatility has been tame, geopolitical risk is still elevated at this time and economic growth is following a traditional late-cycle pattern by trending upward from its mid-cycle slowdown.

The initial move up in risk assets was dominated by a solid profits cycle powered by the resurgence of Emerging Markets growth and the end of their bear markets. The global profit cycle benefits from a stable if not slightly weaker dollar, benign financial conditions and strong business and consumer confidence (a goldilocks environment that is not too hot and not too cold). We don't see this dynamic changing in the second half of the year. We expect risk assets to maintain their uptrend in Q3 and Q4 as the global synchronized economic expansion could continue.

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March 2017 ISO: Too Much Growling and Howling

Buffaloes Stampede Bears
We still anticipate better-than-expected earnings growth, even without additional stimulus in 2017.
Christopher Hyzy
Chief Investment Officer, U.S. Trust

Can you hear the bears growl? Have you heard the wolves howl? Both have recently drowned out the subtle grunts of the bulls or—as we have been known to call their less attractive family members—the buffaloes.

The latest, overly short-term, investment headlines have centered on the potential start to a 5% or more correction. Many are discussing the notions that the so-called Trump rally is over, equity valuations are too rich, and the "reflation trade" and bank stocks have had their day in the sun, given that long-term yields have exhaled recently.

In our opinion, this is more of a pause than a wholesale switch in positioning. We don't think it makes sense to get caught up in the daily headlines and noise that populate the airwaves and can be disproportionately based on pure speculation rather than on sound, specific analysis.

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AR-ARDXRSTB-EXP-2018.12.15

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