After a tough year in the equity markets, this year is shaping up to be a better year for investors as the S&P 500 is up over 7% through Monday’s close. This is happening amid numerous recession predictions across Wall Street. The rise in the stock market this year can be attributed to the growing sentiment that the worst is over when it comes to inflation and rising interest rates. In fact, a gauge of future volatility in the U.S. bond that tracks interest-rate turbulence is now showing an increasingly encouraging trend that is supporting the optimism in the market. The ICE BofA MOVE Index is extending a slide that started in October. It has now fallen to lows not seen since March when the Fed started its aggressive interest-rate increases. The index continued to fall after the Fed’s latest meeting on Wednesday, where according to billionaire investor Jeffrey Gundlach, Fed Chair Jerome Powell “didn't fight back in his speech Wednesday against market expectations that the Fed will soften its rate policy later this year.” The Fed raised benchmark borrowing costs by only 25 basis points, the smallest increase since last March. Over the past year, the trajectory of the S&P 500 has moved inversely to the MOVE index, showing the market's sensitivity to the interest-rate outlook.

Finsum:The stock market has rebounded this year as the ICE BofA MOVE Index, which measures bond volatility, has been sliding since October.

Morgan Stanley recently announced the launch of an exchange-traded fund platform with the listing of six Calvert ETFs on NYSE Arca, including an actively managed fixed-income ETF. The Calvert Ultra-Short Investment Grade ETF (CVSB) will focus on investment-grade debt issuers. Managers Eric Jesionowski and Brian S. Ellis seek to maximize income, to the extent consistent with the preservation of capital, through investment in short-term bonds and income-producing securities. Investors will gain diversified short-term fixed-income exposure to an actively managed portfolio of high-quality bonds of issuers that Calvert believes are demonstrating effective management of key ESG risks and opportunities. The other five ETFs include four indexed ESG equity strategies and an active ESG strategy. The funds include the Calvert US Large-Cap Diversity, Equity and Inclusion Index ETF (CDEI), the Calvert US Large-Cap Core Responsible Index ETF (CVLC), the Calvert International Responsible Index ETF (CVIE), the Calvert US-Mid Cap Core Responsible Index ETF (CVMC), and the Calvert US Select Equity ETF (CVSE). As part of the announcement, Dan Simkowitz, head of Morgan Stanley Investment Management, said the following in a statement. “This launch is the first step in MSIM’s development of a robust ETF platform that supports products across our businesses, asset classes, jurisdictions, and brands.”

Finsum:Morgan Stanley announced the launch of an ETF platform and the listing of six Calvert ETFs, including an actively managed ultra-short investment grade ETF.

Last month, fixed-income ETFs saw more inflows than equity ETFs. Elisabeth Kashner, director of global fund analytics at FactSet said in a phone interview with MarketWatch that “You don’t see that every day. That’s kind of a big deal.” According to Kashner, fixed-income ETFs brought in around $23.7 billion in January, while equity ETFs raked in a total of $22.9 billion. In 2022, rates rose quickly amid sky-high inflation. Due to this, investors embraced more “targeted products” than broad fixed-income funds, according to Kashner. This continued into January as the Schwab Short-Term U.S. Treasury ETF (SCHO) and the iShares 20+ Year Treasury Bond ETF (TLT0) were among the top 10 funds for inflows. Kashner noted that the Schwab Short-Term U.S. Treasury ETF “is what you buy defensively if you want to be in high-quality” fixed income “but you don’t want too much duration exposure,” due to concern about rising rates. She also said that the “iShares 20+ Year Treasury Bond ETF, which provides duration exposure, tends to attract investors worried about a recession.” Other fixed-income ETFs that saw strong inflows last month include the iShares JP Morgan USD Emerging Markets Bond ETF (EMB) and the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), according to FactSet data.

Finsum:Fixed-income ETF inflows outpaced equity ETF inflows last month as investors continued to embrace more targeted fixed-income products amid high inflation.

According to data compiled by S&P Global Market Intelligence, ninety-nine U.S.-based publicly traded REITS announced increases to their dividend payments last year, representing about 61.5% of the entire U.S. REIT industry. The self-storage industry reported the highest percentage of dividend hikes relative to the sector's total, with 83.3% announcing dividend increases during 2022. The industrial sector placed second, with 81.8% increasing dividends. The retail industry had the biggest number of REITs that announced dividend hikes last year at 25, 80% of all retail REITs. In addition, close to 70% of U.S. REIT dividend hikes in 2022 surpass pre-COVID payouts. In fact, 68 out of 99 U.S. REITs that announced dividend hikes last year posted higher regular dividend payouts by year-end when compared to dividends in 2019. However, 27 were still paying lower dividends relative to their 2019 dividend payments. This included four hotel REITs that only reinstated their dividends last year after suspending payouts in 2020 and 2021. The remaining 4 had not started trading yet on a major exchange in 2019. In terms of the highest percentage jump in dividends, Service Properties Trust, which focuses on hotels, led all U.S. REITs with year-over-year dividend payout hikes last year. The company raised its quarterly cash dividend to 20 cents per share on Oct. 13, from a 1-cent-per-share paid during the fourth quarter of 2021. However, its current dividend is still below its pre-COVID dividend of 54 cents per share.

Finsum:Over 60% of U.S. REITs announced increases to their dividend payments in 2022, led by the self-storage industry, the industrial sector, and the retail industry.

According to a recent announcement, Raymond James Financial has nabbed a Merrill Lynch advisor managing $250 million in Miami. Daniel Laiter, who has been in the industry for 25 years, joined Raymond James’ Alex. Brown unit on January 20th. He started his career at Lehman Brothers in 1997, joined Credit Suisse by way of its Donaldson Lufkin & Jenrette Securities predecessor in 2001, and returned to Lehman for two years between 2006 and 2008 before joining Merrill. Laiter, who focuses on clients in Mexico, will report to Eric Termini, regional executive for South Florida. As part of the announcement, Termini said “Danny represents one of the top advisors in the industry.” Laiter was convinced to move in part by a “client-centric” culture and the “experienced management team” at Raymond James. In June, Raymond James folded Alex. Brown into its core employee channel, Raymond James & Associates, led by Tash Elwyn. The unit had around 150 advisors at that time, a small fraction of the roughly 3,450 advisors in the RIA division. Raymond James announced four additional hires into the unit last year, including three who joined in Miami.

Finsum:Raymond Jamesadds to its Alex. Brown unit with the recruitment of a Merrill Lynch advisor managing $250 million.