A Stock-Pickers Comeback? Not So Fast!
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Your Money Briefing Money and Market Stories from The Wall Street Journal. I'm J.R. Whalen in New York. Active fund managers on Wall Street have seen glory days the past several months, but all of a sudden, the tables are turning. We'll have details in just a moment. First, these money items you should know. A recent uptick in mortgage interest rates is increasing costs for buyers already grappling with rising prices. The average monthly mortgage payment is up nearly 13% nationally over the past year. That's an increase of $168 per month. For luxury homes, the top 10% of the market, owners are paying an average of $241 more per month. And mortgage interest rates are about a half a percentage point higher than they were at the beginning of the year.
The Mortgage Bankers Association says the average rate on a 30-year fixed-rate conforming mortgage was 4.69% in the week ending March 23rd. The average rate for a 30-year fixed-rate jumbo was 4.6 percent. The Wall Street Journal real-time economics desk cites a University of Chicago study that indicates that trade barriers aimed at protecting U.S. factories could boost manufacturing output, but they're unlikely to bring back many blue-collar jobs. The U.S. shed about 5.5 million manufacturing jobs between 2000 and 2017. That's more than twice as many as lost between 1980 and 2000. and those job losses were more highly concentrated among lower-skilled positions, often filled by men with less education.
This is your Money Briefing from The Wall Street Journal. Welcome back, everybody. 2018 has been a good year for active mutual fund managers, also known as stock pickers. That is, if the year ended on March 31st. But this year's market volatility appears to be turning the tables. And Wall Street Journal markets reporter Chelsea Delaney is here to explain. So, Chelsea, these active fund managers had a tough go of it in recent years, but then really excelled in the past 12 months.
Yeah. So, I mean, before last year, stock pickers had sort of been left for dead. There was a lot of research basically showing that, you know, it wasn't worth the fees that they charge because you could just put all your money in a low-cost index fund and get a better return. So they had had a really hard time. And that sort of started to change last year, in part because these fund managers had really ramped up their exposure to tech and So they had bet a lot of money on Amazon and Facebook and just generally like the FANG stocks. They had a lot of exposure to that. So when those stocks started to take off, they did really well.
FANG stocks being Facebook, Amazon, Netflix, Google.
Yes.
And so I guess what the tech sector giveth, the tech sector taketh away?
Definitely. So tech stocks in general have been under a lot of pressure since March. That comes as there's a lot of questions over their use of user data, over if they're going to face tighter regulation. So a lot of those stocks that had been doing so well and had been doing really well for active managers had started to turn around on them. So the report that I referenced in my article was a report from Bank of America. And it showed that, you know, After a really strong January and an OK February, active managers had a not great March. And so we're in April now. There's still a lot of pressure on tech stocks. So they probably are facing some headwinds right now.
It really does show you the degree to which the volatility has changed things up for the active managers because they were riding high. They had great, great numbers. And it's just taken really, what, three or four weeks of all this upheaval and it's totally changed things for them?
It has. And I think, you know, people had been gotten really optimistic on on stock picking again. You know, they were like stock picking is back that it sort of started to change the narrative. But, you know, the two things that they had really been benefiting from was stock was tech exposure and market correlations had been pretty low.
You know, you mentioned stocks becoming more tightly correlated in your story.
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