Kaewta Suphan/iStock via Getty Images By Snezhana Otto & Itay Moshenberg, CFA Fears of an inflation spike bolster the case for adding equity income exposure to allocations. Conflict in the Middle East has raised the specter of inflation again. As the energy price shock threatens to spread through the economy, it’s a good time to search for assets that can provide inflation resilience in portfolios...
Kaewta Suphan/iStock via Getty Images By Snezhana Otto & Itay Moshenberg, CFA Fears of an inflation spike bolster the case for adding equity income exposure to allocations. Conflict in the Middle East has raised the specter of inflation again. As the energy price shock threatens to spread through the economy, it’s a good time to search for assets that can provide inflation resilience in portfolios. Dividend-paying stocks offer an effective hedge against inflation—as well as solid long-term return potential in other environments when actively sourced from the right parts of the market. Rising oil and gas prices are classic mechanisms for a surge in inflation . Much will depend on the duration of the war and how long the Strait of Hormuz, a vital choke point through which a fifth of the world’s oil flows, stays shut. However, the situation may evolve, recent events have clearly reminded investors that inflation risks are far from extinguished . Inflation had been on a declining slope since the consumer price index peaked at 9.0% in mid-2022 because of pandemic-related effects. Now, the risk of rising prices is again threatening growth, corporate earnings and equity returns, adding challenges to an investment playbook . So how can investors find assets that are likely to perform well in this changing environment but will also do well when inflation recedes? Classic Inflation Hedges Are Flawed Some investors might turn to “classic” inflation hedges, such as commodities. History suggests that these assets tend to perform well in inflationary eras. But when inflation retreats, investors might be left in the cold. Assets held for inflation protection, such as commodity stocks or gold, are not reliable sources of long-term returns. On the other hand, high-dividend stocks have delivered stronger risk-adjusted returns over time ( Display ). High-Dividend Payers: Attractive Long-Term Return Potential, Correlated with Inflation "Past performance does not guarantee future result...
Prediction markets are booming. Wagers on everything from the return of Jesus Christ to who will win the World Cup have driven weekly volumes on platforms like Polymarket and Kalshi into the billions of dollars. Even as some Wall Street players have taken the first steps into this sort of event betting, many big trading firms, including Citadel Securities , IMC Trading and Hudson River Trading hav...
Prediction markets are booming. Wagers on everything from the return of Jesus Christ to who will win the World Cup have driven weekly volumes on platforms like Polymarket and Kalshi into the billions of dollars. Even as some Wall Street players have taken the first steps into this sort of event betting, many big trading firms, including Citadel Securities , IMC Trading and Hudson River Trading have stayed away so far. There are numerous reasons why institutional traders have not joined in, including the lack of regulatory clarity and the relatively light volumes compared with the other areas where they operate. But a new academic paper points to another potential reason: Some of the basic tools that sophisticated traders use to manage risk in other markets aren’t available in event-based bets. At the most basic level, most market makers offset their risk in one type of trading by hedging with other related assets — for options markets, they can do this in the underlying stock market. That is much less easy when the bet is on a celebrity wedding or an election, according to the paper published by Nick Palumbo, a former product manager at the sports betting site DraftKings Inc. “Unlike options or futures markets, event contracts do not reference an underlying spot asset that permits mechanical hedging,” Palumbo wrote in his paper. Representatives for Citadel and IMC confirmed that they are not involved in prediction markets, but declined to offer comment on their reasons. HRT did not respond to a request for comment. Read More: Iran Bets Expose Limits of Prediction Markets for Wall Street The lack of an underlying asset is not a total deal killer. Proprietary trading firms take a variety of approaches to dealing with the directional risks involved in the assets they buy and sell. Many market makers opt to stay as risk neutral as possible, through hedging. Others, like Jane Street, are more willing to take directional risk to make money. For Palumbo, trying to compare ...
neilkendall/iStock Editorial via Getty Images Sometimes you go into companies at a price that you later end up regretting quite a bit. Not because it's a bad company, per se, but because everything you do as a value investor depends on the value of the thing you're buying when you buy it. This is a relevant discussion because the company I am speaking of here, Eastman Chemicals ( EMN ), is not a b...
neilkendall/iStock Editorial via Getty Images Sometimes you go into companies at a price that you later end up regretting quite a bit. Not because it's a bad company, per se, but because everything you do as a value investor depends on the value of the thing you're buying when you buy it. This is a relevant discussion because the company I am speaking of here, Eastman Chemicals ( EMN ), is not a bad company. It's just a company that's been under recent strain and pressure due to results and macro, which, unfortunately, has led it to underperform the market. I bought shares in accordance with my latest recommendation, rating, and article for the business, which you can find here. Seeking Alpha Eastman Chemical RoR Eastman Chemicals is an attractive business from a fundamental perspective. A business could be little else when it has a BBB, IG-rated credit, and a dividend yield of about 4.5% that, by all appearances, is well-covered even during an earnings slump (which the company in 2025-2026 seems to be going through). So let's see what the company offers us, what we might do here. EMN is a specialty chemicals company - not a commodity chemicals company. That means that the company's end-markets and producers focus on high-value and low-volume products (or formulations, in chemical vernacular) for highly specific applications. It insulates the company from broader commodity cycles but also increases the volatility when the specific specialties the company works with are in lower demand. An example of a specialty chemical is something for pharma or an additive. An example of a commodity chemical, for comparison, is sulfuric acid. One is produced in bulk, the other in much lower quantities. Eastman Chemical - Upside is Now Better, but Growth is Moderated The drivers and what makes a company profitable in one versus the other are two entirely different things - in a commodity, it's all about scale and cost leadership, such as BASF ( BASFY ). I like commodity players as ...
asbe/iStock via Getty Images US large-cap banks kick off first quarter earnings season on Tuesday, April 14, with JPMorgan Chase & Co. ( JPM ), Citigroup Inc. ( C ), and Wells Fargo & Co. ( WFC ) reporting first, followed by Bank of America Corp. ( BAC ) on Wednesday. The big four entered 2026 with strong momentum following a record 2025, supported by resilient economic activity, moderating inflat...
asbe/iStock via Getty Images US large-cap banks kick off first quarter earnings season on Tuesday, April 14, with JPMorgan Chase & Co. ( JPM ), Citigroup Inc. ( C ), and Wells Fargo & Co. ( WFC ) reporting first, followed by Bank of America Corp. ( BAC ) on Wednesday. The big four entered 2026 with strong momentum following a record 2025, supported by resilient economic activity, moderating inflation, and still-elevated interest rates. Markets have remained constructive but volatile, with rate-cut expectations shifting and capital markets activity gradually improving from late-2025 lows. Against this backdrop, Visible Alpha consensus expectations point to steady top-line growth, modest profitability gains, and early signs of normalization in credit costs. Across the group, revenues are expected to grow in the mid-to-high single digits year-over-year, led by JPMorgan (+7.3%), Citi (+8.3%), Wells Fargo (+7.5%), and Bank of America (+5.7%). This growth is driven by continued strength in trading and investment banking pipelines, which began recovering in Q4 2025, stable loan growth, particularly in consumer and commercial segments, and elevated (though plateauing) net interest income (NII) levels. Profitability is expected to improve, with EPS growth ranging from 7% at JPMorgan to over 30% at Citi, the latter benefiting from restructuring progress and operating leverage. ROE trends are expected to be mixed, improving at JPMorgan, Bank of America, and Citi, but declining at Wells Fargo. While efficiency ratios show improvement at JPMorgan and Bank of America and deterioration at Citi and Wells Fargo, reflecting ongoing investment spend and restructuring costs. Net interest margins face incremental pressure Despite solid revenue growth, net interest margins (NIMs) are expected to show mixed-to-declining trends. Bank of America, Citi, and Wells Fargo are all expected to see sequential NIM compression, while JPMorgan stands out with a modest NIM uptick. Banks have flagged t...
For many Americans, claiming Social Security is a long-awaited milestone -- the moment when decades of hard work and loads of taxes finally translate into a steady retirement paycheck. But before you start counting your monthly benefits , there's something important you should know. Social Security benefits are not exempt from taxes. You'd think they would be, since the whole reason you're eligibl...
For many Americans, claiming Social Security is a long-awaited milestone -- the moment when decades of hard work and loads of taxes finally translate into a steady retirement paycheck. But before you start counting your monthly benefits , there's something important you should know. Social Security benefits are not exempt from taxes. You'd think they would be, since the whole reason you're eligible for them is that you paid taxes on your wages throughout your career. Image source: Getty Images. Continue reading
Heavy use of a joss paper burner led to a fire at a Hong Kong columbarium that sent ashes flying, injuring at least two people on Sunday. Police said that they received a report at 11.37am that a fire had broken out at Diamond Hill Columbarium. A preliminary investigation found that the fire was caused by an overheated exhaust fan connected to a joss paper burner, the force said. Firefighters arri...
Heavy use of a joss paper burner led to a fire at a Hong Kong columbarium that sent ashes flying, injuring at least two people on Sunday. Police said that they received a report at 11.37am that a fire had broken out at Diamond Hill Columbarium. A preliminary investigation found that the fire was caused by an overheated exhaust fan connected to a joss paper burner, the force said. Firefighters arrived and put out the flames, which were classified as a No 1 alarm fire, the lowest in Hong Kong’s...
The United States and Iran failed to reach an agreement after a day of highly anticipated face-to-face peace talks, Washington's lead negotiator Vice President J.D. Vance announced on Sunday. (Image credit: Jacquelyn Martin)
The United States and Iran failed to reach an agreement after a day of highly anticipated face-to-face peace talks, Washington's lead negotiator Vice President J.D. Vance announced on Sunday. (Image credit: Jacquelyn Martin)