In this latest Investment Perspectives, we discuss the economic evolution of Mexico, the Fed’s many misconceptions, and whether there are new highs ahead for the S&P 500.

Oh, Mexico

Mark Luschini, Chief Investment Strategist

Famed singer and songwriter James Taylor released a tune in 1975 that invited listeners to envision the warm sun and appealing lifestyle of our North American neighbor with whom we share a southern border. While those attributes still apply, the country has evolved into much more.

Mexico has a population of almost 130 million, making it the 10th most populous in the world, and its Gross Domestic Product (GDP) ranks it the 14th largest economy. It exports more goods to the United States than any other country on earth, having recently surpassed China, and has benefited economically from its proximity to its northern neighbor.

Decoding the Fed’s Balance Sheet

Guy LeBas, Chief Fixed Income Strategist

Few areas of mainstream finance create as many misconceptions as does the Federal Reserve’s (Fed) balance sheet. Since the 2022 policy tightening cycle (tightening is code for tapping the brakes on economic growth and inflation), the Fed has been gradually reducing its holdings of bonds. But wait! In some months the Fed’s portfolio actually grew, engendering cries of “stealth QE!” And what about the reverse repo program and the money supply? In short, there are a lot of moving parts involved. We’re taking the space in this month’s Investment Perspectives to provide a bit of framework on the Fed’s balance sheet, what investors should care about, and what they should ignore as noise.

If Spring Forward Is Fall Back Instead

Gregory M. Drahuschak, Market Strategist

The February edition of Investment Perspectives highlighted that earnings are what really matter. This premise was underscored dramatically throughout the past month.

Despite already lofty expectations, Nvidia (NVDA) topped Wall Street’s earnings and revenue consensus, which ignited a 4.97% gain in the semiconductor SOX Index, a 6.83% gain in the Vaneck Semiconductor ETF, and a 105.23-point rally in the Standard & Poor’s 500 (S&P), which was its biggest one-day percentage gain since January 6, 2023.

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About the authors

Mark Luschini

Chief Investment Strategist, President and Chief Investment Officer, Janney Capital Management

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Guy LeBas

Director, Custom Fixed Income Solutions

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