(New York)

Big bank Credit Suisse thinks the stock market rally will keep going. They say the big gains this year are mostly because of improved investor sentiment on the back of a more dovish Fed, weaker inflation, and the better prospects for a US-China deal. Further, the bank’s chief US equity strategist says “Our work indicates that investors have not fully re-risked portfolios following 4Q’s turbulence—despite a sharp decline in volatility and spreads—and that valuations will drift higher as they do so”.

FINSUM: We have to tentatively agree with this view. Sentiment is up, and combined with lower valuations and the fact that investors have not fully re-entered the market, there does seem to be a good runway higher.

(New York)

It is time to get out high yield. The sector has been seeing heightened fears for months, and prices have performed so well in the first two months of the year, that there is little value left. High yields returned 6.4% in January and February after the market came to a virtual standstill at the end of 2018. Part of the reason for the outperformance is that investors are demanding less spread to Treasuries, a fact that has not carried over to the investment grade market.

FINSUM: The pendulum has swung too far, and investment grade bonds now appear a much better value than high yield.

(New York)

Stocks have been doing well this year, but we are willing to bet that the sectors that have been performing best over the last 12 months are not the ones you expect. With all the fears over rate hikes in the last year, it is hard to imagine that utilities and REITs are both up nearly 20% in the last 12 months, far ahead of the S&P 500’s 4.08%. Even tech is only up about 5%.

FINSUM: The most exciting thing about this performance is that the runway for income investments looks like quite strong—the Fed is unlikely to hike, which means there seems to be little rate risk.

(New York)

Barron’s has been running a series of articles outlining the best dividend funds by different category. They have also put out a piece outlining the best performing dividend funds overall. The funds mentioned below have all provided top performance over the last half decade. The three top funds are the Vanguard Dividend Growth Fund (VDIGX), The Bishop Street Dividend Value Fund (BSLIX), and the Madison Dividend Income Fund (BHBFX). The Vanguard fund has achieved an annual 10.19% average return over the last five years, just under the S&P 500’s 10.67%. Its fees are much lower than the others at only 0.26%.

FINSUM: VDIGX is a great option for solid dividends and returns, but the field of these kinds of funds is growing and diverse.

(New York)

In a sign of just how far Bitcoin and other cryptocurrencies have fallen from their heights, the CBOE has just scrapped its plans to continue to offer Bitcoin futures. Creating mainstream products around Bitcoin was all the rage until recently, but Wall Street’s appetite for doing so has tumbled alongside cryptocurrencies’ prices. Godman Sachs’ plans to create a bitcoin trading desk, much discussed early last year, have yet to materialize.

FINSUM: Have cryptocurrencies reached their zenith? In terms of prices, things are way off (Bitcoin at $20,000 in December 2017 to $4,000 now), but what about in terms of their place in the financial system?