There’s a lot of talk about market efficiency — the theory that prices at any point in time fully reflect all available information. This notion forms the foundation of passive investing.

• In the news,
• investment outlook,
• Market Commentary

For the first half of the third quarter, stocks in developed markets were in a leisurely sideways trend, prompting some investors to wonder what it would take to invigorate equities and get them moving forward again.

• equities,
• In the news,
• managed portfolios

One of the reasons for the current upswing in market volatility is uncertainty about the Federal Reserve’s timeline for raising short-term interest rates. We would argue that a bigger concern is widening credit spreads in the corporate bond market, which suggest more economic trouble may lie ahead.

A Federal Reserve decision to not raise interest rates is generally greeted as good news by U.S. equity investors. Not this time around, however. Since last Thursday, when the Fed voted to stand pat on rates, the Standard & Poor’s 500 is off nearly 4%.

• Federal Reserve,
• In the news,
• interest rates

The Federal Reserve met market expectations at its September meeting by holding interest rates near zero. The rationale of its 9-1 vote: elevated concern about global growth that in recent weeks has pushed down inflation and injected greater volatility into asset markets.

• Federal Reserve,
• In the news,
• Inflation