Latest news with #DarrellCronk
Yahoo
5 days ago
- Business
- Yahoo
Wells Fargo Investment Institute: It's Time to Build Resilience and Capitalize on Opportunities
Wells Fargo & Company (NYSE:WFC) is one of the 11 Best Financial Services Stocks to Buy Right Now. The 2025 Midyear Outlook from the Wells Fargo & Company (NYSE:WFC) Investment Institute (WFII), headlined 'Opportunities amid uneven terrain,' has been revealed. A team of bankers in suits, discussing the success of the company's banking products. The report discusses investment ideas for the rest of 2025 and 2026 and responds to substantial regulatory changes in early 2025. Inflation is anticipated to be 3.5% in 2025 and 2.6% in 2026, whereas WFII projects 1.0% GDP growth in 2025 and 1.8% GDP rise in 2026. The target for the S&P Index is set at 6,400-6,600 for 2026 and 5,900-6,100 by the end of the year. The anticipated range of the Fed funds rate in 2025 is 4.00% to 4.25%. Darrell Cronk, chief investment officer, observed that fresh investment opportunities have been created by market volatility after tariff-driven shocks. Wells Fargo & Company (NYSE:WFC)'s WFII forecasts a gentle economic landing, rising stock prices, and steady commodity growth despite global uncertainty. It suggests diversifying with foreign assets and alternatives to manage policy and geopolitical risks while concentrating on quality assets, exposure to AI, and income-producing investments. While we acknowledge the potential of WFC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 High-Growth EV Stocks to Invest In and 13 Best Car Stocks to Buy in 2025. Disclosure. None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
12-06-2025
- Business
- Yahoo
Americans' views on inflation are finally turning a corner
Consumers' expectations for inflation dropped in May for the first time in 2025. CPI data has been steadily improving, but sentiment readings have lagged the hard data. Improved consumer sentiment could boost markets and help prevent a recession. Americans are finally starting to feel less anxious about inflation. Consumer price index data showed inflation cooled in May. That comes alongside a brightening of inflation expectations in the latest survey data. This embedded content is not available in your region. The New York Fed's survey of consumer expectations, published on Monday, showed that consumers' forward-looking inflation outlook declined in May for the first time this year. The median one-year-ahead inflation expectation decreased, dropping from 3.6% in April to 3.2%. Three-year-ahead and five-year-ahead inflation expectations also declined, falling from 3.2% to 3.0% and from 2.7% to 2.6%, respectively. The survey marks a turning point in the gap between "soft" and "hard" economic data, with the vibes in the economy starting to more closely align with the facts on the ground. Inflation and labor market data have been looking more and more upbeat, but forward-looking gauges like inflation expectations and consumer sentiment have headed in the opposite direction. Last Friday's jobs report also showed higher-than-anticipated job creation and unemployment levels hovering near historic lows. Yet, May's University of Michigan consumer sentiment reading plunged to from 52.2 to 50.8, the second-lowest reading ever recorded. Wall Street has been more focused on the hard data. May was a strong month for markets as slowing inflation and US-China trade relations led stocks to recover their Liberation Day losses. Recession expectations have come down from 60% to as low as 30% among some forecasters. As stocks continue to gain after April's peak tariff volatility, strategists are also recalibrating their inflation expectations. While inflation could spike later this summer, as it could take three months or more for retailers to pass on tariff-related price increases to consumers, Goldman Sachs believes inflation will only see a temporary uptick from tariffs in 2025 before heading back down in 2026. Now, it seems like consumers are finally getting on the same page. In addition to the improved inflation outlook reported by the New York Fed, the Consumer Confidence Index rebounded, increasing 12.3 points in May to 98.0 — its first increase after falling for five consecutive months. Goldman Sachs said that for past event-driven recessions, soft data has usually bottomed around 60 days after a catalyst. As Liberation Day moves further into the rearview, Americans appear to be adjusting their economic outlooks. Darrell Cronk, chief investment officer of Wells Fargo, echoed this perspective. "What people forget is that sentiment is a reflection of what has happened already, not what will happen in the future," Cronk said during the bank's midyear outlook conference on Tuesday. More optimistic sentiment could be a tailwind for markets, according to Goldman Sachs. Pessimistic consumers have pulled back on spending, especially in discretionary categories like airfare and travel. With consumer spending making up roughly two-thirds of GDP, sentiment improvement could help prevent a recession and boost markets. Read the original article on Business Insider
CNBC
11-06-2025
- Business
- CNBC
Wells Fargo's top ideas to help cushion your portfolio from rocky markets
With market volatility expected to continue through the summer, investors should consider cushioning their portfolios with income-generating assets, Wells Fargo said in its mid-year outlook. In fact, income generation is one of the firm's top five portfolio ideas for the rest of 2025. While the Treasury market has been rocky lately, fixed-income assets are offering a steady stream of cash flow, said Tracie McMillion, head of Wells Fargo's global asset allocation strategy. "Cash coming into a portfolio can be very important to income investors in particular, but it provides all investors with optionality," she said during a panel discussion Tuesday on the bank's investment outlook. 'Fireworks' this summer Wells Fargo expects limited upside for stocks this year and a recovery in 2026 , with the S & P 500 reaching 6,500 by the end of 2026. However, the path from here will be choppy and will likely include a 5% to 10% pullback due to several headwinds this summer, according to the firm. "There's a lot of news events and pretty material market-moving news events that all are going to converge in the months of July and August," said Darrell Cronk, president of Wells Fargo Investment Institute and chief investment officer for Wells Fargo's wealth and management division. "That's going to lead to, no pun intended, some fireworks that we think markets are going to have to digest." Notably, the pause on most of President Donald Trump's reciprocal tariffs is due to expire in July, with China's pause lifting in August. In addition, Trump has said he wants his " big, beautiful bill " of tax cuts on his desk by July 1. The legislation, which the Congressional Budget Office estimates will add $2.4 trillion to the deficit ovet the next 10 years, was passed by the House last month and is now before the Senate. Finding income To generate cash flow, Wells Fargo prefers intermediate-term fixed income assets, since short- and long-term bonds could be hurt by both future Federal Reserve monetary policy as well as fiscal policy, McMillion said. "As the yields on shorter maturities may fall faster than on longer maturities, we believe the best opportunities are in the intermediate space (five- to seven-year maturities), offering attractive income and exposing investors to less volatility than longer-dated maturities," she wrote in the outlook. One area the bank likes is investment-grade corporate bonds. For example, iShares 5-10 Year Investment Grade Corporate Bond ETF has a 30-day SEC yield of 5.32% and an expense ratio of 0.04%. Within investment-grade corporates, it favors telecom issuers, financials and utilities. Wells Fargo also likes residential mortgage-backed securities and asset-backed securities. Municipal bonds also present a good opportunity for investors, particularly general obligation bonds and essential service revenue bonds, said Brian Rehling, head of global fixed income strategy. VTEB YTD mountain Vanguard Tax-Exempt Bond ETF year to date For one, yields are attractive, especially when their tax advantage is taken into account. Income on munis is free of federal tax and, if the bondholder lives in the same state where the bond was issued, exempt from state tax, too. For example, the Bloomberg Municipal bond index currently yields 4.05%. Assuming the highest tax-bracket of 37%, that implies a taxable equivalent yield of about 6.43%, Wells Fargo said. Plus, while there has been some concern that the muni tax exemption could be eliminated or cut back as Congress looks for ways to offset the Trump administration's proposed tax cuts, Wells Fargo believes that is "extraordinarily unlikely." "[It] actually offers an opportunity for investors to get in at a little bit more attractive valuations," Rehling said. Diversifying beyond bonds Investors may also consider diversifying into other asset classes, like dividend stocks in some of the sectors Wells Fargo favors, McMillion said. Wells Fargo's most recommended equity sector is energy, which tends to pay a lot of income. For instance, the Energy Select Sector SPDR Fund has a 30-day SEC yield of 3.31% and an expense ratio of 0.08%. Among the other sectors the firm is favorable on are utilities and financials, which also pay high dividends. XLE YTD mountain Energy Select Sector SPDR Fund year to date Within energy and utilities, midstream energy, electric utilities and independent power and renewable electric producers "can benefit from strong fundamental positioning while leveraging secular growth in power demand," Wells Fargo said in its outlook. "The leaders in these industries own and operate some of the most difficult-to-replicate assets on the planet, including long interstate pipelines and nuclear power plants," Wells Fargo said. "These companies do not have meaningful direct exposure to commodity prices, but rather, benefit from the long-term growth in energy demand from data centers, electrification and reshoring of specific industries." Lastly, direct lending, a subset of private debt, offers the most attractive yields and can be a good way to add income for qualified investors who meet financial thresholds, McMillion said. The yield on the Cliffwater Direct Lending Index , an asset-weighted index of approximately 14,800 directly originated middle-market loans, was 11% as of December 31, 2024, she noted.
Business Insider
11-06-2025
- Business
- Business Insider
Americans' views on inflation are finally turning a corner
Americans are finally starting to feel less anxious about inflation. Consumer price index data showed inflation cooled in May. That comes alongside a brightening of inflation expectations in the latest survey data. The New York Fed's survey of consumer expectations, published on Monday, showed that consumers' forward-looking inflation outlook declined in May for the first time this year. The median one-year-ahead inflation expectation decreased, dropping from 3.6% in April to 3.2%. Three-year-ahead and five-year-ahead inflation expectations also declined, falling from 3.2% to 3.0% and from 2.7% to 2.6%, respectively. The survey marks a turning point in the gap between "soft" and "hard" economic data, with the vibes in the economy starting to more closely align with the facts on the ground. Inflation and labor market data have been looking more and more upbeat, but forward-looking gauges like inflation expectations and consumer sentiment have headed in the opposite direction. Last Friday's jobs report also showed higher-than-anticipated job creation and unemployment levels hovering near historic lows. Yet, May's University of Michigan consumer sentiment reading plunged to from 52.2 to 50.8, the second-lowest reading ever recorded. Consumers are catching up to Wall Street Wall Street has been more focused on the hard data. May was a strong month for markets as slowing inflation and US-China trade relations led stocks to recover their Liberation Day losses. Recession expectations have come down from 60% to as low as 30% among some forecasters. As stocks continue to gain after April's peak tariff volatility, strategists are also recalibrating their inflation expectations. While inflation could spike later this summer, as it could take three months or more for retailers to pass on tariff-related price increases to consumers, Goldman Sachs believes inflation will only see a temporary uptick from tariffs in 2025 before heading back down in 2026. Now, it seems like consumers are finally getting on the same page. In addition to the improved inflation outlook reported by the New York Fed, the Consumer Confidence Index rebounded, increasing 12.3 points in May to 98.0 — its first increase after falling for five consecutive months. Goldman Sachs said that for past event-driven recessions, soft data has usually bottomed around 60 days after a catalyst. As Liberation Day moves further into the rearview, Americans appear to be adjusting their economic outlooks. Darrell Cronk, chief investment officer of Wells Fargo, echoed this perspective. "What people forget is that sentiment is a reflection of what has happened already, not what will happen in the future," Cronk said during the bank's midyear outlook conference on Tuesday. More optimistic sentiment could be a tailwind for markets, according to Goldman Sachs. Pessimistic consumers have pulled back on spending, especially in discretionary categories like airfare and travel.
Business Wire
11-06-2025
- Business
- Business Wire
Wells Fargo Investment Institute: It's Time to Build Resilience and Capitalize on Opportunities
SAN FRANCISCO--(BUSINESS WIRE)--Wells Fargo Investment Institute (WFII) today released its ' Midyear Outlook report: Opportunities amid uneven terrain.' The first half of 2025 delivered some of the most stunning and rapid policy changes of the past 80 years. This midyear report assesses the changes since the release of WFII's 2025 Outlook in December and highlights the potential risks and opportunities that may lie ahead. The report includes specific ideas to build portfolio diversification and resilience during the remainder of 2025 and 2026. 'The news of the day is moving with sudden speed, and investors must react quickly to anticipate and manage downstream market implications,' said Darrell Cronk, chief investment officer for Wells Fargo Wealth & Investment Management. 'This can feel jarring, but we believe that uncertainty and volatility often create the best opportunities for investors, and that this time will be no different.' Portfolio returns often take two steps forward and one step back. Markets enjoyed extraordinarily strong returns in 2023 and 2024 with subdued volatility before the changes of first half of 2025 arrived. But households and businesses have a long history of adjusting to tax increases, such as tariffs, and markets are adjusting as well. Outlook on global economy and asset groups: Global economy: Steady underlying support and looming tax policy extensions should cushion a mid-2025, tariff-induced economic slowdown and help the U.S. and international economies avoid a recession into 2026. Global equities: The economic soft landing we expect should help drive global equity prices higher through 2026. Global fixed income: Lingering policy uncertainties likely will keep U.S. Treasury yields volatile into year-end 2025, but we expect slightly higher yields in 2026. Global real assets: The modest improvement in global economic growth that we expect into 2026 should stimulate additional commodity demand and moderately higher commodity prices through 2026. Global alternative investments: We see value in alternative strategies' diversification benefits, as well as their potential ability to capitalize on opportunities during market dislocations. Top portfolio ideas for the balance of 2025: Position portfolios for policy and geopolitical uncertainties Focus on quality and diversifying assets Cushion portfolios with income-generating assets Selectively add exposure to artificial intelligence (AI) Complement U.S. exposure with international assets Highlights of WFII's forecast: The anticipated U.S. GDP (gross domestic product) growth target for 2025 year-end is 1.0%, and 1.8% for 2026. The target for U.S. consumer price inflation in 2025 is 3.5% and 2026 is 2.6%. The S&P 500 Index price target range is 5,900 – 6,100 for year-end 2025 and 6,400 – 6,600 for 2026. Federal funds rate target for 2025 is 4.00% – 4.25% and 3.75% – 4.00% in 2026. Join the WFII 2025 Midyear Outlook call today, June 11, at 4:15 p.m. Eastern Time. Dial-in: 877-601-6604; Passcode: 71-306-44 A summary of the WFII 2025 Midyear Outlook is available (PDF). Please see the full report for detailed information. Risk Disclosure Forecasts and targets are based on certain assumptions and on our current views of market and economic conditions, which are subject to change. All investing involves risks, including the possible loss of principal. There can be no assurance that any investment strategy will be successful and meet its investment objectives. Investments fluctuate with changes in market and economic conditions and in different environments due to numerous factors, some of which may be unpredictable. Asset allocation and diversification do not guarantee investment returns or eliminate risk of loss. Stock markets, especially foreign markets, are volatile. A stock's value may fluctuate in response to general economic and market conditions, the prospects of individual companies, and industry sectors. International investing has additional risks including those associated with currency fluctuation, political and economic instability, and different accounting standards. This may result in greater share price volatility. These risks are heightened in emerging and frontier markets. Investments in fixed-income securities are subject to market, interest rate, credit, liquidity, inflation, prepayment, extension, and other risks. Bond prices fluctuate inversely to changes in interest rates. Therefore, a general rise in interest rates can result in a decline in the bond's price. The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This report is not intended to be a client-specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold, or sell securities. Do not use this report as the primary basis for investment decisions. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs, and investment time horizon. About Wells Fargo Investment Institute Wells Fargo Investment Institute, Inc. is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company. About Wells Fargo Wells Fargo & Company (NYSE: WFC) is a leading financial services company that has approximately $1.9 trillion in assets. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth & Investment Management. Wells Fargo ranked No. 34 on Fortune's 2024 rankings of America's largest corporations. News, insights, and perspectives from Wells Fargo are also available at Wells Fargo Stories. PM-06042026-7408492.1.1 News Release Category: WF-ERS
