As strikes on Iran continue and the Strait of Hormuz remains effectively closed, it’s clearly too early for market watchers to stop thinking about geopolitical risk. As discussed in recent commentaries but worth repeating, history shows stocks often recover quickly from wars and other military engagements, especially when economies are resilient and earnings fundamentals remain strong. Improved valuations, the strong earnings outlook, and a still-normal level of volatility suggest the risk ‑ reward backdrop for stocks is getting more favorable. That said, we don’t have market capitulation signals flashing (washed-out selling), n

LPL Research periodically conducts a detailed study that examines when and where active management has performed well. Our data includes actively-managed mutual funds across a variety of asset categories, going back 20 years. We assess active management using a variety of criteria. Here we present what we believe are two essential and complementary criteria: excess returns and batting averages. For excess returns, we take the return of each fund and subtract the returns for the benchmark we designate for that asset class. Pardon the baseball reference, but batting average simply means the percentage of funds that outperformed the benchmark de

As the first quarter comes to a close, it’s clear that equity markets have endured a difficult stretch. The strong momentum that drove a record‑setting rally early in the year faded quickly as concerns over artificial intelligence (AI) spending and disruption dampened risk appetite. The outbreak of the Iran war in late February added new challenges, as the essential closure of the Strait of Hormuz underpinned an unprecedented supply shock in oil that quickly drove prices to multi-year highs. Inflation fears promptly followed, and the market drastically repriced global monetary policy expectations to a higher-for-longer regime, with gr

Earnings drive stock prices over time, but not all the time. Clearly, we’re in an environment where stocks are moving on developments in the Mideast and related moves in oil prices and interest rates. At the risk of writing about something that markets may not care much about right now, here we share some thoughts on the upcoming earnings season and the earnings outlook for the rest of the year. 

Despite the sharp rise in oil prices and interest rates in March, our expectation is that the upcoming earnings season will be solid. While companies with business models sensitive to oil and rates may strike a more cautious t