More on Related Themes
2015-11-24 00:00:00 S&P 500 Snapshot: A Fractional Gain by Doug Short (Article)
Pre-market futures reflected the global jitters following the exogenous shock of the Russian jet shot down by Turkey near the Syrian border. The S&P 500 sold off at the open despite the 8:30 upward revision of Q3 GDP from 1.5% in the Advance Estimate to 2.1% in today's Second Estimate. The selloff accelerated with 10AM release of the highly disappointing November Consumer Confidence report, the lowest reading in 15 months and an unwelcome bit of news at the threshold of the holiday spending season.
2015-11-23 00:00:00 Asian Market Update by (Article)
China’s evolving economic conditions may affect Asian market CEF strategies, says Rennie McConnochie of Aberdeen Asset Management.
2015-11-21 00:00:00 What We’re Paying Attention to Following the Paris Attacks by Frank Holmes of U.S. Global Investors
A week ago today, 129 lives were brutally cut short when assailants affiliated with the terrorist group ISIS, also known as the Islamic State, stormed Paris in a series of coordinated attacks. Along with the rest of the world, we were shocked and saddened as the tragic news unfolded, worsening as the night progressed. Our thoughts are with the victims’ families and friends.
2015-11-21 00:00:00 Lessons from Australia and New Zealand on Debt, Immigration, and Food by Carl Tannenbaum of Northern Trust
The arc traced by Australian and New Zealand home prices is a source of broad concern. Property values in Sydney, in particular, have risen by 50% over the past 5 years. Observers from near and far fret that the line between fair value and market excess was crossed some time ago.
2015-11-20 00:00:00 ECRI Weekly Leading Index: "Multiple Jobholders Boost 'Full-time' Employment" by Jill Mislinski (Article)
ECRI's latest weekly data point shows a slight increase from the previous week's number and their latest feature commentary published earlier this week points out the flaws in the recent increase in jobs.
2015-11-20 00:00:00 South Korea 2.0 by Michael Oh of Matthews Asia
Some key differences between Korea’s older companies and its newer “2.0 firms.” include their target demographics, regional reach and branding tied to rising interests in Korean pop culture, or K-pop. Whereas the products of Korea’s more traditional and longer-standing exporters were geared toward developed economies, its newer cultural exports are a hit with more developing countries. This month Asia Insight explores such cultural exports, including those from industries as travel & leisure and entertainment, which are growing even faster than Korea’s overall export growth.
2015-11-19 00:00:00 Political Turmoil in Portugal by Kaisa Stucke of Confluence Investment Management
Portugal held parliamentary elections in which the incumbent center-right Social Democratic Party received the most votes but fell short of an outright majority. The president tasked the party with forming a government. However, the center-left opposition party and some far-left parties have formed a coalition, together garnering a majority of votes and currently awaiting presidential approval to form a government and take control from the center-right party. This week, we look at Portugal’s current political environment, election results, change in coalition powers and path going forward.
2015-11-19 00:00:00 Global Economic Perspective: November by Franklin Templeton Fixed Income Group of Franklin Templeton Investments
While China’s manufacturing sector—which drove China’s rise to its place as the world’s second-largest economy—has been losing steam, it is being supplanted by a domestic, consumer-led economy propelled by a rising middle class with growing income. Other Asian countries are on a similar trajectory.
2015-11-18 00:00:00 Reform: The Comeback Catalyst for International Equities by Jeff Everett, Dale Winner, Venk Lal of Wells Fargo Asset Management
In the U.S., we see other countries’ economic developments play out in news snapshots or opinion pieces—often focusing on short-term data or what’s perceived to be wrong. But here’s what the headlines may not be telling you: Non-U.S. regions from Asia to Europe are home to economic comebacks and companies that are growing their earnings. Let’s take a closer look at developments in Japan and Italy and then contrast the risk/reward dynamic with the current market environment in the U.S.
2015-11-17 00:00:00 Gundlach – The Psychology of a Rate Hike by Robert Huebscher (Article)
The consensus is building for a Fed rate hike in December. But how the market will react is far less certain. According to Jeffrey Gundlach, that will depend on the context in which the Fed takes action.
2015-11-17 00:00:00 Gasoline and Coffee Fuel Our Daily Lives. Can Commodities Also Fuel Our Investment Portfolios? by Bransby Whitton, Klaus Thuerbach, Kate Botting of PIMCO
Commodities are a tangible part of our daily lives. They are the food we eat, the energy that powers our cars and heats our homes, the metals that go into our electrical wiring and our jewelry. Yet investing in commodities can seem elusive.
2015-11-16 00:00:00 Volatility Takes Center Stage in 2015 by Clas Olsson of Invesco Blog
Looking back over the last three to four years, global market performance has been driven mainly by quantitative easing, with little to no profit growth internationally. This, in turn, has led to significant multiple expansion. Market leadership has been driven by defensive stocks, such as consumer staples, as pricing power and emerging market demand for products and services helped them sustain growth.
2015-11-16 00:00:00 Are Emerging Markets Turning a Corner? by Mark Mobius of Franklin Templeton Investments
We consider many of the factors driving recent volatility in emerging markets to be temporary in nature and compounded by typically low summer liquidity—thus we believe we have grounds to be optimistic longer term.
2015-11-13 00:00:00 The Bullish Case for Aussie Gold by Frank Holmes of U.S. Global Investors
There’s a gold bear market here in North America, where the yellow metal has plunged to a six-year low of $1,083 per ounce on the strong U.S. dollar. But when priced in the weaker Aussie dollar, the precious metal is sitting at $1,520. As recently as last month, it touched $1,642.
2015-11-13 00:00:00 Gasoline and Coffee Fuel Our Daily Lives. Can Commodities Also Fuel Our Investment Portfolios? by Bransby Whitton, Klaus Thuerbach, Kate Botting of PIMCO
Commodities are a tangible part of our daily lives. They are the food we eat, the energy that powers our cars and heats our homes, the metals that go into our electrical wiring and our jewelry. Yet investing in commodities can seem elusive.
2015-11-09 00:00:00 Emerging Markets Winners and Losers: Q3 2015 by Jackie Lafferty of Loomis Sayles
Investor risk aversion battered emerging market (EM) assets during the third quarter. Local currency and hard currency markets both posted negative gains and EM equities posted double digit losses.
2015-11-07 00:00:00 Get Ready for Commodity Liftoff: Global Manufacturing Just Made a HUGE Move! by Frank Holmes of U.S. Global Investors
As Donald Trump might say: This is going to be huge.
2015-11-07 00:00:00 Crime in the Jobs Report by John Mauldin of Mauldin Economics
In today’s letter, we are going to look briefly at the latest employment numbers. Then we’ll explore some of the deeper, less understood facets of the employment data. For some of you this may be a lot of detail, but for those of us who think about employment (and you should, as it is THE ultimate driver for your business and investments), understanding how the numbers work and what they mean is important.
2015-11-06 00:00:00 A Step in China's Economic Journey by Robert Horrocks of Matthews Asia
We emerge from the recent Chinese Communist Party Plenum with sketches of a new “five-year-plan.” Hurrah! There is always much fanfare around these events—not least in the investment community. We will no doubt hear the sentiment that China is a policy-driven stock market and so all the short-term traders are keen to see which sectors and industries are in favor. Then begins the game of who might get a subsidy, a contract or beneficial regulation.
2015-11-03 00:00:00 El Niño: Winds of Change for Commodity Prices? by Andrea DiCenso of Loomis Sayles
An endless number of factors can influence commodity prices. The headlines this year are focused on the global weather pattern known as El Niño and its potential to impact all areas of the commodity complex.
2015-11-02 00:00:00 Chuck Royce on the Current State of the Small-Cap Market by (Article)
The small-cap market finished 3Q15 with a double-digit decline, in many ways similar to the correction investors saw around this same time last year. CEO Chuck Royce sits down with Co-CIO Francis Gannon to discuss why he believes corrections are a sign of healthy market behavior, the importance of risk management in the small-cap space, and why he thinks a new market cycle will favor companies with earnings.
2015-11-02 00:00:00 Small Stars Can Shine Bright by Mark Mobius of Franklin Templeton Investments
We have found that as an asset class, emerging-market small cap is one of the most widely misunderstood and underutilized among investors. It is often perceived to be a place to avoid in times of uncertainty, but we see things differently.
2015-11-02 00:00:00 In China and Brazil, Macro Headwinds Reveal Stock Opportunities by Mark Jason of Invesco Blog
The third quarter was one of the most difficult quarters I can remember for Asia and Latin America, as stocks and currencies tumbled. However, markets can change quickly, and the Invesco International and Global Growth team believes the fall in valuations has made our markets more attractive for long-term investors now than they were just three months ago.
2015-10-30 00:00:00 Have Commodities Reached an Inflection Point? by Frank Holmes of U.S. Global Investors
This week the Federal Reserve announced that it would delay the interest rate liftoff yet again, but while everyone seems concerned about nominal rates—the federal funds rate, in this case—real rates have already risen about 5 percent since August 2011. This “invisible” rate hike is much more impactful to commodity prices and emerging markets than a nominal rate hike, which is simply the “tip of the iceberg.”
2015-10-30 00:00:00 Currency Risk, still an Afterthought? by Anton An of Matthews Asia
Foreign exchange concerns were once an afterthought for equity investors. But the recent slowdown in emerging markets, and the potential for the U.S. Federal Reserve to raise interest rates, makes it even more critical for investors to examine currency exposure throughout corporate financial statements.
2015-10-29 00:00:00 It's Darkest Before the Dawn – but Is the Time Now 1am or 5am? by Tim Guinness, Will Riley, Jonathan Waghorn of Guinness Atkinson Asset Management
It has been a pretty brutal summer for the energy markets. Brent oil fell from $65 in May to below $40, and the MSCI World Energy Index was down around 25% over the same period, leaving energy as the worst performing sector year-to-date and the most out-of-favour among all the portfolio manager surveys that we see. Long-dated Brent oil has also fallen; having started the year at $78 and traded in a fairly tight $75-$80 range until the end of June, it fell to a low point of just over $60, over 40% off its highs last year.
2015-10-29 00:00:00 Emerging Markets Equity Commentary: September 2015 by Team of Thomas White International
Emerging market equity prices declined further in September, as fears about slower global economic growth persisted. External trade data from China was weaker than expected and accentuated investor concerns that the world’s second largest economy could miss current growth targets. Nevertheless, retail sales in China continued to expand at a healthy pace in August as the central bank’s interest rate cuts and other policy measures lifted domestic consumer sentiment.
2015-10-28 00:00:00 4Q 2015 Outlook: Key Issues Have Not Changed Much This Year by Michael Avery, Cynthia Prince-Fox, Chace Brundige of Ivy Investment Management Company
As the final quarter of 2015 begins, we are reminded of several topics of focus from the start of the year: concerns that global central bankers are stuck with their current monetary policies because the global economy now depends on them; market acceptance that higher U.S. interest rates are inevitable, even if they rise only slightly; and favorable prospects for U.S. consumers, who benefit from a stronger labor market and lower energy prices. If the topics sound familiar now, it is because little has changed in these areas while global risks have increased for several reasons.
2015-10-28 00:00:00 The Obama Doctrine: Moneyball America by Bill O’Grady of Confluence Investment Management
Over the past three years, we have witnessed what appears to be a steady erosion of American power. In this report, we will examine President Obama’s foreign policy, using the construct of Ian Bremmer’s recent book, Superpower. After discussing President Obama’s foreign policy and the potential effects, we will examine how the next president may shift from the current policy. As always, we will conclude with potential market ramifications.
2015-10-27 00:00:00 The Fed's Dilemma by Scott Minerd of Guggenheim Partners
The U.S. Federal Reserve’s rate rise history reveals a familiar dilemma—previous delays led to inflated asset prices and recessions.
2015-10-26 00:00:00 Why Inflation Is Lower Than You Think by Robert Huebscher (Article)
Financial pundits routinely claim that inflation is much higher than the reported statistics. We hear, for example, that food prices have risen much faster than the roughly 1.5% increase in the CPI over the past several years. Viewed over the longer term, however, inflation is far lower than reflected in the published data.
2015-10-26 00:00:00 Dan Fuss: Rates Will Rise (and so will taxes) by Robert Huebscher (Article)
If there truly were a “bond king,” it would not be Bill Gross or Jeffrey Gundlach. It would be Dan Fuss, whose tenure in the fixed-income markets has spanned more than half a century. In a talk last week, Fuss warned investors to expect higher interest rates along with higher taxes.
2015-10-26 00:00:00 Digital India by Sudarshan Murthy of Matthews Asia
During Indian Prime Minister Narendra Modi’s recent visit to Silicon Valley, he promoted his “Digital India” project, which aspires to provide easy access to a digital infrastructure for all of India. This is no small feat considering about 40% of the population still lacks access to proper sanitation. How feasible are these goals?
2015-10-23 00:00:00 The Seven Biggest Lies Told (and Believed) about Gold by Guy Christopher of Money Metals Exchange
It’s hard to say which lie about gold is the biggest whopper. Many widely held beliefs about gold are lies – propaganda hammered home to have us believe the only true measure of wealth is government-issued debt.
2015-10-23 00:00:00 Global Economic Perspective: October by Franklin Templeton Fixed Income Group of Franklin Templeton Investments
Overall, while there are plenty of ‘problem children’ in the emerging-market space, there are undoubtedly assets and currencies being beaten down by broad-brush assessments of economic prospects that merit renewed attention.
2015-10-23 00:00:00 Follow the Leaders: Learning from ETFs, BCA and the New PM by Frank Holmes of U.S. Global Investors
Yesterday I had the pleasure of attending an intensive daylong ETF conference in Austin, just up the road from our office in San Antonio. Hosted by Cantor Fitzgerald, the conference was designed for institutional investors.
2015-10-21 00:00:00 The TPP by Bill O’Grady of Confluence Investment Management
On October 6, trade negotiators announced a final agreement for the Trans-Pacific Partnership (TPP), a multilateral trade deal between 12 Pacific Rim nations in both the eastern and western hemispheres. In this report, we will begin by discussing the nations involved. We will examine some of the details of the treaty. An analysis of the geopolitics will follow along with a look at specific political factors surrounding the treaty. As always, we will conclude with potential market ramifications.
2015-10-21 00:00:00 An Important Rebalancing Milestone by Andy Rothman of Matthews Asia
Third quarter macroeconomic data shows that Chinese consumers shrugged off the A-share market fall, with a small acceleration in spending. While many headlines may declare that China’s 6.9% GDP growth was the slowest since 2009, it should be noted that this pace of growth was on a base that is about 300% bigger than it was a decade ago (when GDP growth was 10%), meaning that the incremental expansion in China’s economy this year is about 60% bigger than it was back in the day.
2015-10-21 00:00:00 With Stocks on Shaky Ground, a Promising Ballast in Bonds by Russ Koesterich of BlackRock
BlackRock Global Chief Investment Strategist Russ Koesterich discusses the emergence of the return of longer-duration bonds as a potential hedge to equities.
2015-10-19 00:00:00 Weighing the Week Ahead: Can Strong Housing Data Give An "All Clear" Signal for the U.S. Economy? by Jeff Miller of NewArc Investments, Inc.
It is a very unusual week for data, with many of the major housing reports on tap and not much else. China’s GDP will be a big story over the weekend, and important earnings news will continue. Despite this, pundits will turn their attention to housing, asking: Can a housing rebound signal “all clear” for the U.S. economy?
2015-10-17 00:00:00 Asia Lens on Global ESG by Vivek Tanneeru of Matthews Asia
For Asia’s vast, newly minted middle classes, quality of life issues are increasingly becoming front and center. Governments and regulators are increasingly tackling Environmental, Social and Governance (ESG) issues and taking these problems more seriously. For investors looking to make investment decisions based upon ESG factors, Asia represents one of the best opportunities to gain exposure to companies that can make a long-term difference to the region and the world.
2015-10-17 00:00:00 Will Gold Finish 2015 with a Gain? by Frank Holmes of U.S. Global Investors
After its stellar performance this week, gold might do something it hasn’t done since 2012—that is, end the year in positive territory. You can see past returns for yourself in our perennially popular Periodic Table of Commodities Return.
2015-10-16 00:00:00 How NOT to Wipe Out with Momentum by Chris Brightman, Vitali Kalesnik, Engin Kose of Research Affiliates
Momentum investors are like the surfers we watch from beaches along the Pacific coast. Both must catch a wave. Both attempt to ride it as it breaks. But the ability to glide away smoothly before being caught inside the inevitable crash(ing wave) that follows is what determines success.
2015-10-16 00:00:00 Why There’s a Disconnect Between Economic Data and Performance by Russ Koesterich of BlackRock
Recent weak economic data have confirmed everyone’s worst fears: The global economy is indeed decelerating. Yet risky assets have been advancing. Russ explains why and whether this can continue.
2015-10-14 00:00:00 Emerging Market Debt: An End to the Agony? by Jim Cielinski of Columbia Threadneedle Investments
Capitulation by many EMD investors has created opportunities in many of the more resilient countries. We favor countries moving down the reform path and where there is significant impetus to reign in excessive government spending. Valuations have reached the extremes that allow a selective approach to EM to now represent a key part of an income-oriented portfolio.
2015-10-14 00:00:00 Upcoming Debt Ceiling Fight Could Get Really Ugly by Gary Halbert of Halbert Wealth Management
Here we go again – another debt ceiling battle will play out between now and November 5 when the Treasury says it will run out of “extraordinary measures” to fund the government without exceeding the current debt limit of just over $18 trillion. If the debt ceiling is not increased, the US government will default on its debt.
2015-10-12 00:00:00 Despite Recent Downturn, Healthcare is the Investment of the Decade by Andrew Stotz of A. Stotz Investment Research
World equity markets are trading at a high 2015E* 15 times price-to-earnings (PE), led by highly priced United States (US) stocks at about 2015E* 17 times PE. However, uncertainty has risen after recent shocks in Asia, particularly in China.
2015-10-10 00:00:00 How these 12 TPP Nations Could Forever Change Global Growth by Frank Holmes of U.S. Global Investors
The current members include Canada, the United States, Mexico, Peru, Chile, Japan, Vietnam, Malaysia, Brunei, Singapore, Australia and New Zealand.After nearly seven years of negotiations, the TPP promises to deliver unprecedented free and fair global trade among the 12 participant nations.
2015-10-10 00:00:00 Not Making it in India by Siddharth Bhargava of Matthews Asia
Despite all the lip service Indian authorities give to policy reform, some smaller textile manufacturers in India still find the country’s business challenges not worth the effort. Lured by the speed and ease of setting up business abroad in countries like Bangladesh and Vietnam, their incentive to stay has diminished.
2015-10-09 00:00:00 Hasenstab Sees Once-in-a-Multi-Decade Opportunities by Michael Hasenstab of Franklin Templeton Investments
There are a handful of countries that are being caught up in the current market turmoil that we think are the diamonds in the rough—multi-decade opportunities, once-in-the-history of some of these countries—opportunities.
2015-10-09 00:00:00 Investing versus Flipping by Chris Brightman of Research Affiliates
Newport Beach may be known as home to PIMCO (and, of course, Research Affiliates). Locally, however, the business of Newport Beach is real estate finance. Many of my local friends have made a bundle in recent years flipping houses in Orange County (the OC). I have also purchased some houses over recent years, but as an investment rather than as a flip. In this article, I explain the difference between investing and speculating by sharing my personal experience investing in residential real estate.
2015-10-06 00:00:00 Under Pressure: Earnings Recession Warning; Economic Recession Watch by Liz Ann Sonders of Charles Schwab
Many of the questions I’ve been getting recently at client events are around earnings, and whether the expected move into negative territory for earnings growth is a signal of a pending economic recession.
2015-10-05 00:00:00 An All-Market Approach to Investing in China by William Yuen of Invesco Blog
As China transitions from a manufacturing-driven economy to a consumer-led one, the Chinese investment universe has expanded. Historically, global investors have chosen to invest in Chinese equities via Hong Kong stock exchanges. But with China gradually opening its capital markets to global investors, and more Chinese enterprises successfully listing overseas, the investment options and opportunities have increased significantly. In this changing investment landscape, we are seeing a growing trend toward investors adopting an all-market approach to investing in China.
2015-10-05 00:00:00 Green Shoots in China? by Nick Niziolek of Calamos Investments
Over the next weeks, there will be a great deal more data for us to evaluate, including foreign reserves data on October 6. Signs of stabilization in foreign reserves and savings deposits would point to a reduced risk of capital flight, which would give us more confidence in a gradual depreciation of the renminbi. We’ll also be watching for mid-month data on imports. If these green shoots begin to take hold and the markets can become comfortable that a hard landing is off the table for the near term, we wouldn’t rule out a fourth quarter rally in Chinese and global equity markets.
2015-10-03 00:00:00 The 10 Most Competitive Countries in the World by Frank Holmes of U.S. Global Investors
No new countries have entered or exited this exalted list, and there was very little rank-shuffling. For the seventh consecutive year, Switzerland is the most competitive country. For the fifth straight year, Singapore is number two. The U.S. comes in at number three for the second year. And so on.
2015-10-02 00:00:00 World CPI Proxy Breaks Below 1% by Eric Bush of GaveKal Capital
There’s been a lot of of deflationary data recently (see here, here and here). The plunge in our simple World CPI proxy to the lowest level since October 2009 doesn’t really catch us off guard. The fact that one third of the 33 countries in our proxy are currently are seeing year-over-year declines in consumer prices is a bit eye-opening, however. Switzerland is leading the deflationary wave as Swiss consumer prices are down -1.4% year-over-year, more than they were at any point during the financial crisis. The year-over-year decline is the largest on record since 1959 for Switzerland.
2015-10-02 00:00:00 Postcard from Huallywood by Sharat Shroff of Matthews Asia
First came Hollywood, then India’s Bollywood. Now, China’s Jiangsu province is hoping Huallywood will be the next film production site to make international waves. As a prime example of the China’s steady migration toward services-led growth, Wuxi studios—developed on the site of a former iron and steel factory—is trying to attract college students and independent artists.
2015-10-01 00:00:00 A Fragile Transition Supported by (Further) Policy Accommodation by Adam Bowe, Isaac Meng, Tadashi Kakuchi of PIMCO
n the following interview, Portfolio Managers Adam Bowe, Isaac Meng and Tadashi Kakuchi discuss conclusions from PIMCO’s quarterly Cyclical Forum, in which the company’s investment professionals debated the outlook for global economies and markets. They share our views on economies and investment implications across the Asia-Pacific region over the next 12 months.
2015-09-30 00:00:00 El Niño Update by Kaisa Stucke of Confluence Investment Management
Meteorologists have been calling for an El Niño event since last year. Current forecasts place the likelihood of an El Niño this winter at over 90%. Water temperatures in the Pacific, one of the first signs of a looming El Niño, have measured much higher than normal. In fact, water temperatures have been on par with the most severe El Niño event from the past 30 years. This report looks at how an El Niño develops and its possible climate, economic and geopolitical effects on the global economy. As always, we outline the potential investment implications of this event.
2015-09-28 00:00:00 Staley Cates on Why Active Management Wins in the Long Term by Robert Huebscher (Article)
Staley Cates is president and chief investment officer of Southeastern Asset Management, manager of the Longleaf funds. In this interview, he says, “the passive movement is not just a big trend. It is a bubble.” He explains why passive investing has made it hard for value investors to outperform.
2015-09-25 00:00:00 How NOT to Wipe Out with Momentum by Chris Brightman, Vitali Kalesnik, Engin Kose of Research Affiliates
Enabled by modern technology, investors can now enhance a pure value strategy by using momentum to improve timing, measuring quality to avoid value traps, and diversifying active bets into less efficiently priced small stocks.
2015-09-25 00:00:00 Visit to Cradle of Innovation and Entrepreneurship by Rahul Gupta of Matthews Asia
There is a lot of optimism around Indian Prime Minister Narendra Modi’s visit to the San Francisco Bay Area, and rightly so. India is expected to add more than 100 million employable workforce to the global labor pool in the next decade. The country needs to find many engines of growth to provide employment opportunities to its population. Mr. Modi understands this very well—hence his slogan “Make in India.” The Prime Minister shown his acumen in understanding productivity the technology industry can unleash, and his upcoming visit to Silicon Valley’s cradle of innovation and entrepr
2015-09-25 00:00:00 How Will These Leaders of 4 Billion People Change the World? by Frank Holmes of U.S. Global Investors
This week the U.S. played host to three prominent and illustrious leaders to billions of people: Chinese President Xi Jinping, Indian Prime Minister Narendra Modi and Pope Francis. Among them, they lead—either politically or spiritually—nearly 4 billion people worldwide, more than half of everyone living on the planet right now.
2015-09-25 00:00:00 The Case for Credit by Mark Kiesel of PIMCO
Three reasons why the outlook for developed credit markets remains constructive.
2015-09-25 00:00:00 China, Commodities, and Crisis: What’s Next for Emerging Markets by Zachary Karabell of Envestnet
China’s growth story fueled global markets for years, and the recent market rout raises concerns that the spigot may be tapping out. But is it really? Emerging markets, currently out of favor with investors, are showing signs of domestic economic growth driven by an expanding middle class. Could these economies, along with China, re-emerge as bright spots in the global markets?
2015-09-23 00:00:00 Balancing Risks and Opportunities in the Multi-Speed World by Richard Clarida, Andrew Balls of PIMCO
Read our global economic outlook for the near term and implications for asset classes.
2015-09-19 00:00:00 Here Are Two Ways Investors Can Take Advantage of the Fed's Uncertainty by Frank Holmes of U.S. Global Investors
Although interest rates could still be hiked in one of the two remaining times the Federal Open Market Committee (FOMC) meets this year, I’m inclined to think they’ll stay near zero until at least 2016. The decision is a welcome one for both gold demand and new home purchases. When rates rise, gold becomes less attractive for some investors, who are encouraged to exchange their no-yielding gold for income-producing assets.
2015-09-18 00:00:00 Are “Chinese Whispers” Distorting Your View? by Stuart Rae, John Lin, Hayden Briscoe, Anthony Chan of AllianceBernstein
Renewed anxiety about China’s economic performance appears to be at odds with the fact that the country’s growth has been declining for years. How much of the recent nervousness is based on an outdated view of China’s policy direction?
2015-09-18 00:00:00 Japan Then and Now by Kenichi Amaki of Matthews Asia
Late in 2006, Matthews Asia was wrapping up a special report titled “Japan Reawakens.” The timing of that AsiaNow publication, just ahead of the Global Financial Crisis, was unfortunate to say the least. With the ensuing economic turmoil, Japan fell asleep again, sliding off the radar screens of many investors. But as interest in Japan has more recently re-emerged, I thought it would be important for us to take a look back and consider what we previously published. Has Japan evolved the way we had envisioned? What’s changed and what hasn’t?
2015-09-18 00:00:00 The Fed Holds by Carl Tannenbaum of Northern Trust
The Federal Open Market Committee (FOMC) concluded its meeting today with no change in interest rates.
2015-09-17 00:00:00 More Volatility on U.S. Horizon Has Sights Turning to Asia by Russ Koesterich of BlackRock
After weeks of struggling, global equities stabilized last week. In the U.S., the S&P 500 Index rose 2.08% to 1,961, the Dow Jones Industrial Average climbed 2.05% to 16,433, and the tech-heavy Nasdaq Composite Index advanced an even stronger 2.97% to end the week at 4,822. Meanwhile, the yield on the 10-year Treasury rose from 2.13% to 2.19%, as its price correspondingly fell.
2015-09-16 00:00:00 Correlations Have Spiked In The US, Less So Around The World by Eric Bush of GaveKal Capital
The correlation between US stocks and the MSCI World Index has once again spiked as volatility has increased. In the chart below, we show 20-day, 65-day, and 200-day rolling correlation between US stocks and the MSCI World Index. The 20-day correlation has increased to 0.82 which is the highest level since 9/7/2011 and it surpasses any level hit during the financial crisis.
2015-09-16 00:00:00 New Study: We're Nowhere Near Peak Coal Use in China and India by Frank Holmes of U.S. Global Investors
Resource investors, take note: By 2025, just 10 years from now, energy consumption in Asia will increase a whopping 31 percent. A whole two-thirds of that demand, driven largely by China and India, will be for fossil fuels, most notably coal.
2015-09-16 00:00:00 Don’t Submit to Market Distortions by Sharon Fay of AllianceBernstein
After years of steadily rising markets, distortions have become embedded in the landscape. We believe there are several large market imbalances that investors may be exposed to in passive portfolios today.
2015-09-16 00:00:00 The Fed's Dilemma by Scott Minerd of Guggenheim Partners
The U.S. Federal Reserve’s rate rise history reveals a familiar dilemma—previous delays led to inflated asset prices and recessions.
2015-09-15 00:00:00 China: Double, Double Toil and Trouble/Fire Burn, and Cauldron Bubble? by Andy Rothman of Matthews Asia
Many argue that China’s economy is descending into policy chaos and a witches’ brew, otherwise known as a hard landing. But perhaps tellingly, even during the recent A-share fall, Chinese consumers seemed to shrug off the drama and continued to spend. China’s recent economic developments can be seen as stumbles along the path toward growth rates that are continuing to decelerate (but are still quite fast) from an economy that is increasingly “rebalanced.” This latest issue of Sinology explores the thinking behind this non-consensus conclusion.
2015-09-11 00:00:00 An Expert’s Guide to Market Volatility by Russ Koesterich of BlackRock
Russ shares three themes that have emerged from his conversations with numerous clients following the market drama in recent weeks.
2015-09-11 00:00:00 Global Economic Perspective: September by Franklin Templeton Fixed Income Group of Franklin Templeton Investments
While the [US] Fed is facing an extremely delicate task ... it is still our belief that the US economy remains sufficiently strong to be able to bear a gradual increase in short-term rates in the coming months.
2015-09-11 00:00:00 Protecting Against Inflation In a Deflationary World by Steven Malin Ph.D. of Allianz Global Investors
Powerful global deflationary forces will continue to put downward pressure on the prices of inputs and outputs for months, if not years, to come. Even if the US Federal Reserve and the Bank of England raise policy interest rates over the months ahead, inflation risk premiums built into market interest rates will remain small. In the absence of strong wage increases, unprecedented global growth in the supply of resources and outputs relative to demand will linger—and inflation will remain constrained.
2015-09-08 00:00:00 Making Sense of Market Volatility by Sponsored Content from Invesco (Article)
• On Aug. 21, the Dow Jones Industrial Average entered a correction and reminded investors what volatility looks like. • Several Invesco senior investment leaders discuss their views of market volatility. • They share how it affects, or doesn’t affect, the opportunities they see.
2015-09-08 00:00:00 Largest Driver of Performance Over the Last Month? Beta by Jennifer Thomson of GaveKal Capital
As part of our treasure trove of data and tables, we rely on our factor scoring model to tell us the most important elements that have affected performance over various time periods and in different regions. For developed markets (DM), the most influential factor over the last week and month (coming in 2nd over the last year and 5th over the last three months) has been beta.
2015-09-05 00:00:00 Meet QT; QE's Evil Twin by Peter Schiff of Euro Pacific Capital
There is a growing sense across the financial spectrum that the world is about to turn some type of economic page. Unfortunately no one in the mainstream is too sure what the last chapter was about, and fewer still have any clue as to what the next chapter will bring. There is some agreement however, that the age of ever easing monetary policy in the U.S. will be ending at the same time that the Chinese economy (that had powered the commodity and emerging market booms) will be finally running out of gas.
2015-09-04 00:00:00 Here’s Your Guide to What the Influencers Are Saying about Commodities by Frank Holmes of U.S. Global Investors
A few legendary influencers in investing are making huge bets right now on commodities, an area that’s faced—and continues to face—some pretty strong headwinds. What are we to make of this?
2015-09-04 00:00:00 Will Unsettled Markets Unsettle the Federal Reserve? by Carl Tannenbaum of Northern Trust
The question of how events in the Far East will affect the Fed has come up frequently in recent conversations. At the outset, it should be noted that central banks do not center their policies on the levels of asset markets or the level of volatility.
2015-09-04 00:00:00 Unfazed by the Turmoil by Byron Wien of Blackstone
Overall, my sense of this year’s lunches is that the participants were still basically optimistic, as they generally are. I wonder if there were something big and negative brewing out there, whether the group would be able to anticipate it.
2015-09-04 00:00:00 China Sets its Sights on Life Sciences by Jerry C. Shih of Matthews Asia
China is a market too large to be ignored—this has long been a saying among those considering doing business in the country. But increasingly, multinational corporations see China as a hub of nascent innovation. China’s evolving pharmaceutical landscape and the government’s pro-innovation policies are driving indigenous innovation in its life sciences. Asia Insight explores China’s path in this arena.
2015-09-03 00:00:00 12 Questions for a 12% Correction by Burt White of LPL Financial
The recent market downdraft and related uncertainty in China have led to many investor questions. The strong 6.5% rebound in the S&P 500 over the last three trading sessions (August 26, 27, 28, 2015) has cut the S&P 500’s losses from the 2015 peak (2130 on May 21, 2015) to 6.7%. In response to the S&P 500’s recent 12% correction?—?the first decline of more than 10% since 2011?—?we answer 12 investor questions. Bottom line, we do not expect the latest correction and China uncertainty to lead to the end of the U.S. economic expansion or the end of the six-and-a-half-year old bull
2015-09-03 00:00:00 Searching for Sustainable Growth in Malaysia by Dilip Badlani of The Royce Funds
As an active manager with a value orientation, Portfolio Manager Dilip Badlani seeks to locate inexpensive companies helmed by management teams that have demonstrated an ability to consistently execute plans to grow their business irrespective of economic conditions. Though not without its challenges, Malaysia's history of perseverance makes it an attractive market for disciplined and patient investors.
2015-09-03 00:00:00 Vietnam-EU Agreement: A Good Deal for Southeast Asia by Mark Mobius of Franklin Templeton Investments
As investors in Vietnamese stocks, the primary constraint we face is one of liquidity and limited choices in which to invest, but we are hopeful that will soon change. Vietnam has had a fast-growing economy, and we have found good companies there, including some that are state-owned.
2015-09-02 00:00:00 Bremmer’s Choices by Bill O'Grady of Confluence Investment Management
Last week, we wrote our first formal book review as a Weekly Geopolitical Report. The book, Superpower: Three Choices for America’s Role in the World, is a recently published book by Ian Bremmer in which he discusses three models for American foreign policy. In our closing comments last week, we promised to take a deeper look at Bremmer’s foreign policy models to examine their costs and benefits. In this report, we analyze his three models of exercising the superpower role, Indispensable America, Independent America and Moneyball America, and discuss which model is the most likely choice.
2015-09-02 00:00:00 Market Reset, Not Recession by John Calamos of Calamos Investments
In our view: Neither the U.S. or global economy is headed for recession; instead, we are seeing a market reset that is not entirely unexpected. Markets are likely to be extremely choppy over these next months, and we may see additional corrections. Over the near term, energy and commodity prices will remain volatile, with global interest rates and currency turmoil adding to the headwinds. Market dislocations are providing us with select opportunities to establish and build positions in fundamentally strong companies, worldwide—including in emerging markets.
2015-09-02 00:00:00 Is "New Normal" Enough to Grow China's Economy? by Jerry Zhang of Wells Fargo Asset Management
Jerry Zhang, Ph.D., CFA, explores the economic underpinnings that can spark growth in China—and, in turn, present investing opportunities for growth seekers.
2015-09-01 00:00:00 Investors Should Not "Buy the Dip" Because Macro and Market Risks Remain Elevated by Don Schreiber, Jr. of WBI Shares
The global market meltdown is turning into a rout as investors who ignored the warning signs of overvaluation, weakening earnings/revenue trends, and deteriorating internal market dynamics may now be heading for the exits. As advisors and investors try to rationalize asset allocation and equity market exposure, they may deem it appropriate to stick with investments in countries with the strongest economies. Reasoning, stronger eco-markets should behave better than markets in countries with economies under pressure.
2015-08-31 00:00:00 Making Sense of Market Volatility by Karen Dunn Kelley of Invesco Blog
On Aug. 21, the Dow Jones Industrial Average entered a correction, falling 10% from its most recent peak, and reminded investors what volatility looks like after almost four correction-free years. While volatility exposes weaknesses in the market, in my opinion it also reveals the strength of high conviction managers who are skillfully navigating the market. Active management and smart beta strategies seek to surpass the “market averages” offered by traditional benchmarks, providing the potential not only for higher returns, but also for a smoother ride.
2015-08-31 00:00:00 Stay Calm and Carry On by Kenneth Kim of EQIS Capital
As most everyone is aware, the markets have been highly volatile, and mostly down, during these past few days. Everyone seems to be pointing fingers at China’s slowing economy as the cause. Before joining EQIS, I was a professor of finance at Renmin University in Beijing, China for many years. Recognized as one of the top 15 economists* in China, and a frequent economic commentator on the Chinese economy on China’s only English-language national television station, I can speak about, and address, this current market condition that places blame on China.
2015-08-28 00:00:00 Don't Panic: Putting Market Turbulence in Context by Tom Fahey of Loomis Sayles
Sharp declines in China’s equity markets have heightened fears about the country’s economic prognosis and what it might mean for global growth. While concerns center on the emerging markets, the tumult has spilled across global financial markets. Our advice: don’t panic.
2015-08-28 00:00:00 On Market Corrections, and Keeping a Calm Head by Mark Mobius of Franklin Templeton Investments
Despite recent market volatility, we consider the long-term outlook for China’s market and economy to be good. We don’t view this recent correction as the start of any sort of economic or market collapse underway, and it doesn’t change our view on investing there.
2015-08-28 00:00:00 12 Attractive Fast-Growing Dividend Growth Stocks for High Total Return by Chuck Carnevale of F.A.S.T. Graphs
The current market environment is presenting many challenges to the conservative retired investor in need of current income. Interest rates are near all-time lows and the valuations of many blue-chip dividend growth stocks have become extended. Consequently, it is becoming very difficult to find quality investment opportunities that can provide safety through sound valuation, attractive yield and the potential to fight inflation.
2015-08-28 00:00:00 Times Like This by Robert Horrocks of Matthews Asia
Times like this in the markets can be unsettling. We are accustomed to dealing with risk, or at least familiar with “normal” market swings from year to year. But when there is a sudden abrupt fall in markets, investors are often left to wonder “What is going on?” Are we seeing a repeat of 1997? 2013? Matthews Asia’s Chief Investment Officer Robert Horrocks, PhD, offers his views on recent developments, drawing from historical context but also noting the instances in which history can be misleading.
2015-08-28 00:00:00 China’s Economy Is Undergoing a Huge Transformation That No One’s Talking About by Frank Holmes of U.S. Global Investors
Misconception and exaggeration are circling China’s economy right now like a flock of hungry buzzards. If you listen only to the popular media, you might believe that the Asian giant is teetering on the brink of economic disaster, with the Shanghai Composite Index’s recent correction and devaluation of the renminbi held up as “proof.”
2015-08-26 00:00:00 A Macro View of Recent Market Volatility by Michael Hasenstab and Sonal Desai of Franklin Templeton Investments
When we look at how much market panic there has been, you’d be under the impression China is headed full-speed into full-blown recession. That is not our call. We expect moderation in China’s growth and continue to see it as healthy.
2015-08-26 00:00:00 China Commentary by John Calamos: Market Reset, Not Recession by John Calamos Sr. of Calamos Investments
The global market selloff of these past days has tested the mettle of many investors—particularly as the turmoil has followed an unusual period earlier this year, where equities delivered healthy advances with very little volatility. While we’ve gone on record saying that we expected volatility to persist (including in our most recent Outlook), we have been surprised by how severe the downturn has been. However, experience teaches that there can be many opportunities in volatile markets.
2015-08-26 00:00:00 As Market Fears Grow, Stay Focused on the Long Term by Brad McMillan of Commonwealth Financial Network
One bad day doesn’t make a bear market. Two bad days, however, and the prospect of more to come, may well signal one.
2015-08-26 00:00:00 Markets Crashing, Gold Rising by Clint Siegner of Money Metals Exchange
U.S. Investors are on edge following last week’s and today’s sell-off in stocks around the globe. The carnage impacted equity markets in Asia, Europe, and the U.S. Interestingly, the U.S. dollar also weakened. And bonds and gold are getting most of the safe-haven buying.
2015-08-25 00:00:00 On My Radar: An Optimist Sees The Opportunity In Every Difficulty by Steve Blumenthal of CMG Capital Management Group
“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” – Winston Churchill
2015-08-21 00:00:00 Developed Asia Pacific: Economy Trends Update July 2015 by Team of Thomas White International
After a slump in consumer spending had raised concerns of an economic slowdown in Japan recently, there was a welcome uptick in indicators such as manufacturing activity and exports. However, slowing growth in China, a major trading partner, is widely expected to have a bearing on the economy in the near future. Meanwhile, the Reserve Bank of Australia left interest rates unchanged in its recent review as expected, thanks to subdued inflation, a stabilizing job market, and early signs of a pick-up in business investment.
2015-08-21 00:00:00 Gold Glimmers as Global Market Fear Grips Investors by Frank Holmes of U.S. Global Investors
Gold this week broke above its 50-day moving average as a fresh round of negative news from around the globe rekindled investors’ interest in the yellow metal as a safe haven. The Fear Trade, it seems, is in full force.
2015-08-21 00:00:00 Is a Stronger U.S. Dollar Really Bad News? Three Myths about Emerging Markets by Michele Mazzoleni of Research Affiliates
A strengthening U.S. dollar threatens emerging market economies—owes its plausibility to three myths. Let’s examine them.
2015-08-21 00:00:00 Pressure Mounts on China to Act by Scott Minerd of Guggenheim Partners
Weak manufacturing data out of China indicate that its policymakers will have to act drastically to reverse its decline.
2015-08-20 00:00:00 Unattractive ‘Glamour Stocks’ Lead the Way in Asia Pacific by Brent Bates of Invesco Blog
Economic growth continues to decelerate across the Asia Pacific region. Domestic economies have not been robust enough to offset weakness in commodities and exports, and both revenue and earnings expectations were adjusted downward by 1% during the second quarter. Because growth is scarce, investors have been crowding into the highest-growth and highest-quality stocks; within Asia and Japan, this group of stocks is now trading at the highest premium to the rest of the market that we’ve seen in the past 20 years.
2015-08-19 00:00:00 Global Economic Overview: July 2015 by Team of Thomas White International
While some of the emerging economies continue to face slow growth from lower commodity exports, the outlook for most developed economies has brightened in recent months. The U.S. slowdown during the first half of this year was not as bad as thought earlier, while economic trends from the Eurozone remain stable. Helped by sustained labor market gains, U.S. consumer sentiment is picking up again and should help aggregate growth during the second half of the year.
2015-08-19 00:00:00 One man’s weed... by Jerry Wagner of Flexible Plan Investments
I spent time at the Woodward Dream Cruise this week in my brother Charlie’s 1985 Ford Mustang convertible (his first new car which he bought and has maintained since that year). I think the Cruise is the largest annual assemblage of classic cars on the planet. What a great time for anyone who enjoys historical vehicles and the memories they bring back, especially here in the Motor City.
2015-08-19 00:00:00 Why the Yuan Devaluation Does Not Erode China’s Long-Term Investment Potential by Nick Niziolek of Calamos Investments
In his blog post, titled “Why the Yuan Devaluation Does Not Erode China’s Long-Term Investment Potential,” SVP and Senior Co-Portfolio Manager Nick Niziolek discusses the opportunities the Calamos team sees in China.
2015-08-18 00:00:00 International Equity Commentary: July 2015 by Team of Thomas White International
International equity prices were mostly unchanged during the month of July as gains in Europe were offset by losses in Asia and select other markets such as Canada. Further improvement in economic trends from the Euro-zone and the tentative agreement to provide additional financial support to Greece brightened investor sentiment in the region.
2015-08-17 00:00:00 Chinese Yuan Depreciates Further: What is the Endgame? by Rob Waldner of Invesco Blog
After China’s surprise devaluation of the yuan by 1.9% last Tuesday, the Chinese currency was devalued by another 1.6% on Wednesday. Policymakers appear to be following a pattern of setting the daily fix, which sets the center point for trading during that day, with reference to the market price at the close of the previous day. Invesco Fixed Income believes that further devaluations are likely as the People’s Bank of China (PBoC), the country’s central bank, acquiesces to market pressure and price movements over time.
2015-08-14 00:00:00 Your Economics (and Market Structure) Summer Reading List by Jeff Hussey of Russell Investments
Global CIO Jeff Hussey offers an economics summer reading list (plus one book on market structure).
2015-08-14 00:00:00 The Shot Not Heard Around the World by Peter Schiff of Euro Pacific Capital
China’s recent move to devalue the yuan has sent shock waves through the global financial markets and has convinced most observers that a new front in the global currency wars has begun. The move has caused...
2015-08-14 00:00:00 China Not Immune to Contagious Quantitative Easing and Massive Printing of Cheap Money by Frank Holmes of U.S. Global Investors
First it was the U.S. Federal Reserve. Then, in 2013, Japan launched what became known as Abenomics. The European Central Bank (ECB) followed suit in 2014. And now the People’s Bank of China has joined the parade. All of them in some way stimulated economic growth by initiating monetary quantitative easing (QE) programs.
2015-08-14 00:00:00 China Breaks into a New Range by Carl Tannenbaum of Northern Trust
For some time, analysts have suspected that China’s economic performance was trending well below targeted levels. The equity market correction that began earlier this summer seemed to confirm these concerns; only a substantial amount of official intervention prevented an outright crash. Now we can add exchange-rate uncertainty to the list of things that China will have to manage very carefully.
2015-08-14 00:00:00 China Currency Devaluation Update by Teresa Kong of Matthews Asia
What are the factors that prompted Chinese authorities to recently devalue the renminbi? Matthews Asia Portfolio Manager Teresa Kong, CFA, examines the lead up and implications of this development.
2015-08-13 00:00:00 3 Things: Freight, Deflation, No Hike by Lance Roberts of Streettalk Live
We often look at broad measures of the economy to determine its current state. However, we can often receive clues about where the economy may be headed by looking at data that feeds into the broader measures. Exports, imports, wage growth, commodity prices, etc. all have very important ties to the health of the consumer which is critical to an economy that is nearly 70% driven by their consumption.
2015-08-12 00:00:00 Emerging Markets Winners and Losers: Q2 2015 by Jackie Lafferty of Loomis Sayles
Following positive performance in the first quarter, emerging markets (EM) came under pressure from macroeconomic factors in the second quarter, resulting in mixed returns for the asset class.
2015-08-12 00:00:00 Turkey’s Predicament by Bill O’Grady of Confluence Investment Management
It is our view that over the next few decades Turkey is well positioned to return to its status as a dominant regional power; however, the situation is much less clear in the near term. Turkey has been trying to run a foreign policy of having “no problems” with its neighbors. This stance has become impossible to maintain. Unfortunately for President Erdogan, Turkey is encircled by instability and is struggling to develop a response.
2015-08-10 00:00:00 The Emerging Markets Best Positioned to Withstand a Fed Hike by Russ Koesterich of BlackRock
Russ explains why not all emerging markets are created equal when it comes to weathering capital outflows associated with higher U.S. interest rates.
2015-08-07 00:00:00 Gold Holds Its Own Against These Media Darlings by Frank Holmes of U.S. Global Investors
A recent Bloomberg article points out that the gold rout has cost China and Russia $5.4 billion, an amount that would sound colossal were it not for the fact that U.S. media companies such as Disney and Viacom collectively lost over $60 billion for shareholders in as little as two days this week. Below are the weekly losses for just a handful of those companies. Compared to many other asset classes, gold has held up well, even after factoring in its price decline.
2015-08-06 00:00:00 Global Growth Forecast - Q3 (Infographic) by Rick Harrell of Loomis Sayles
Every quarter, we update our forecast map. What's different this time? We have shaved our US GDP forecast down to 2.3% from 2.9%, mostly on account of weaker exports, a strong dollar and the decline in oil prices. In emerging markets, we still believe Asia Pacific is currently a bright spot - but we expect China to slow further as easing measures fail to gain traction.
2015-08-05 00:00:00 Reflections on the Iran Deal by Bill O’Grady of Confluence Investment Management
Last month, the P5+1 and Iran concluded negotiations on a nuclear deal. In this report, we will offer some reflections on the agreement, including why it occurred, and the major reason why the U.S. negotiated this agreement and the underlying issues. As always, we will conclude with market ramifications.
2015-08-02 00:00:00 Is Now the Time to be Bearish on China? by Andy Rothman of Matthews Asia
One of the world’s largest hedge funds has turned bearish on China, arguing that the recent stock market correction means ‘‘there are now no safe places to invest’’ in that country. I disagree. I respect Bridgewater as an investment house and their views require serious attention. But I think it worthwhile to explain some areas where my views differ.
2015-08-02 00:00:00 More Evidence of China Slowing Permeating Asia – 7/31/2015 by Bryce Coward of GaveKal Capital
In today’s edition we highlight just a few data points: the South Korea Business Survey Index making a new low, Japan consumption expenditure having a very weak month, and Japan CPI headed back toward zero. The slowing of the biggest economy in Asia is really having a noticeable impact on the region.
2015-08-01 00:00:00 Gold on Sale, Says the Rational Investor by Frank Holmes of U.S. Global Investors
The leveraged gold futures derivatives market is knocking down the precious metal, yet in massive contrast, this drop has ignited a shopping frenzy according to gold coin dealers. I spoke with several friends and industry experts this week who confirmed the record sales numbers for the month. In fact, American Gold Eagle sales reached 161,500 ounces in July, the highest monthly figure since April 2013. What gives?
2015-07-30 00:00:00 A Midyear Look at Global Real Estate by Ivy Global Real Estate Team of Ivy Investment Management Company
There are many drivers of recent short-term price changes for publicly traded real estate companies in the current market environment. These include changes in the market’s outlook for economic growth, for interest rate movements, for central bank actions and even the issues surrounding Greece and Ukraine.
2015-07-29 00:00:00 Ten Quick Topics to Ruin Your Summer by Jeremy Grantham of GMO
Chief investment strategist Jeremy Grantham reviews "10 topics that really matter, at least in my opinion. They can all be viewed as problems: potential threats to our well-being"
2015-07-26 00:00:00 Chugging Along by John Osterweis, Matt Berler of Osterweis Capital Management
Sitting down to write this quarter’s Outlook we feel a bit sheepish. Despite all the headlines and drama around the world (e.g., Greece, Mid-East turmoil, China stock market bubble), not much has changed in our outlook for the U.S. economy or the U.S. financial markets. The U.S. economy appears to have rebounded in the second quarter from the first quarter swoon.
2015-07-25 00:00:00 International Economic Week in Review: IMF Lowers Growth Projections, Edition by Hale Stewart of Hale Stewart
At the macro level, the IMF lowered their global growth outlook. The first quarter slowdown in the developed world (largely the US but to a lesser extent Canada) led to decreased 2H15 projections, while the commodity slowdown will negatively impact the developing world. As further evidence of this, note that Latin American currencies are broadly selling off. Low inflation gives central banks plenty of policy room. The wild cards continue to be the cumulative impact of the Chinese slowdown along with certain geopolitical factors such as the Middle East turmoil and Greek situation.
2015-07-25 00:00:00 3 Reasons Why Gold Isn’t Behaving Like Gold Right Now by Frank Holmes of U.S. Global Investors
The last time the metal descended this quickly was 18 months ago, on January 6, 2014, when someone brought a massive gold sell order on the market before retracting it in a high-frequency trading tactic called “quote stuffing.”
2015-07-25 00:00:00 Asia Insight: Online to Offline—The Great Technology Migration by Michael Oh of Matthews Asia
Asia has demonstrated an uncanny ability to leapfrog certain technological developments, making much quicker transitions to new technologies than Western countries: jumping from fixed line to wireless communications and moving away from desktop devices to mobile devices. Now, the latest interesting instance of technology leapfrogging that is happening in Asia is dubbed “Online-to-Offline,” commerce, or O2—an e-commerce model that combines offline opportunities with online platforms. Asia Insight explores.
2015-07-23 00:00:00 Mid-Year Outlook: Global Economy Likely to Withstand China, Greece by John Calamos, Sr. of Calamos Investments
The global markets and economy should be able to move higher for the remainder of the year, with accommodative monetary policy and well-contained inflation providing tailwinds. The U.S. looks set to extend its not-too-hot, not-too-cold recovery, while Japan is benefiting from stimulus and pro-market reforms. Although economic conditions in Europe remain fragile and uneven, growth looks to be accelerating overall, and we believe the European Union has the tools to prevent a broader Europe contagion should the Greek bailout resolution fall apart.
2015-07-22 00:00:00 The BOJ’s Policy: What’s Next, More Easing? Or Something Else? by Tomoya Masanao of PIMCO
Investors are now debating what the next step will be for the Bank of Japan. It is a dramatic turn, isn’t it? Earlier this year, the consensus view was that the BOJ would move forward with additional easing – the question was ‘when’, not ‘if’.
2015-07-22 00:00:00 Currencies Depend on Faith, Gold Doesn’t by Peter Schiff of Euro Pacific Capital
In his July 17th Blog, Let's Get Real About Gold, author and Wall Street Journal columnist Jason Zweig likened investor interest in gold with the "Pet Rock" craze of the 1970's, when consumers became convinced that a rock in a box would provide continuous companionship, elevate their social standing, and give them something hip to talk about at parties. Zweig asserts that investor faith in gold, which he argues is just another inert mineral with good marketing, is similarly irrational, and has kept people from putting money in the much more lucrative stock market.
2015-07-21 00:00:00 Secular Outlook: Implications for Asia-Pacific Investors? by Eric Mogelof, Alan Isenberg of PIMCO
We hope you have had the opportunity to review the summary from our secular forum in May: “The New Neutral Revisited,” written by PIMCO’s Group CIO Dan Ivascyn, Global Fixed Income CIO Andrew Balls an?d Global Strategic Advisor Rich Clarida. In this analysis, the authors identify the six key themes that emerged from our discussion, as well as six risks.
2015-07-19 00:00:00 Imperial Germany by Bill O’Grady of Confluence Investment Management
Last week, we analyzed the Greek/Eurozone negotiations using game theory as an explanatory tool. In this report, we will review the basic geopolitics of Europe, the political response and the evolution of the Eurozone. Using this background, we will examine Germany’s actions in the most recent Greek crisis. As always, we will conclude with market ramifications.
2015-07-17 00:00:00 More Evidence of China Slowing Permeating Asia – 7/16/2015 by Bryce Coward of GaveKal Capital
Yesterday saw a few more weaker data points out of Australia and South Korea that are worthy of mention. Namely, Australian consumer confidence dropped again to around the lowest it’s been since 2009 and South Korea unemployment remained at its cycle highs. No matter what the top line China GDP number was, there is no doubt that China is on a structurally slower growth trajectory and this is most definitely affecting its closest neighbors.
2015-07-17 00:00:00 Crude Oil Is the Best-Performing Commodity of 2015 So Far by Frank Holmes of U.S. Global Investors
The widest expansion this year was made by none other than crude oil, the worst-performing commodity of 2014. As of June 30, oil posted gains of over 11 percent, rising to $59.47 per barrel. After falling more than 50 percent since last summer, though, it had little else to go but up. That oil claimed the top spot just highlights the reality that commodities are in a depressed state right now.
2015-07-17 00:00:00 Northern Trust Perspective by Jim McDonald of Northern Trust
Last month we said that the odds favored some sort of “kick the can down the road” agreement between Greece and its creditors, and it looks like that may be coming to pass. While there’s still much work to be done, the tone of the current agreement seems focused on avoiding a euro exit and debt write-downs, while ignoring growth-oriented policies. With the hard decisions yet again put off for another day, this should be euro-weakening, all else equal.
2015-07-17 00:00:00 China's Rebalancing Continues by Andy Rothman of Matthews Asia
The rebalancing of China’s economy continued in the second quarter of this year, as services and consumer spending drove more growth than industry and construction. The inevitable deceleration of most year-on-year (YoY) growth rates also continued, but a booming stock market provided a temporary lift to headline GDP growth.
2015-07-16 00:00:00 China: Searching for a New Equilibrium by Michael Hasenstab of Franklin Templeton Investments
Overall, based on our detailed analysis, we believe China will remain on course … while the economy shifts toward consumption, services and higher value-added manufacturing. This could have important implications for the global economy.
2015-07-16 00:00:00 Navigating Market Signals in Multi-Asset Portfolios by Rob Balkema of Russell Investments
Russell Investments’ Rob Balkema provides insights on how a portfolio manager looking at Japan might use market signals to manage multi-asset class funds.
2015-07-14 00:00:00 An Update on China from Charlie Awdry by (Article)
Charlie Awdry, Investment Manager in Henderson’s Asia ex Japan equities team, discusses the recent volatility we are seeing in Chinese equity markets. With shares being suspended from trading and further government action expected, this downturn in Chinese equities is causing nervousness among investors in the retail investor dominated Chinese markets.
2015-07-14 00:00:00 Correlation Among Stocks, Especially In Europe, Have Shot Higher by Eric Bush of GaveKal Capital
Over the past several weeks, correlations among stocks have been increasing which makes it increasingly difficult for stock pickers to outperform. The most dramatic example of this is happening in Europe.
2015-07-14 00:00:00 Perspectives on China by Nick Niziolek of Calamos Investments
There are considerable opportunities in China for disciplined, fundamentally driven investors. China’s medium- and longer-term secular tailwinds remain intact. Our team continues to encourage investors to look past the short-term noise and remain focused on the longer-term potential. The economic transition that China is attempting is incredibly challenging. Right now, Chinese regulators have taken a kitchen-sink approach. While it hasn’t achieved the desired effect, it affirms the depth of China’s commitment to stabilize its markets.
2015-07-13 00:00:00 On My Radar: High Probability of a Global Recession by Steve Blumenthal of CMG Capital Management Group
Economists have a number of different ways to measure over and under valuation. Most measures currently show an overvalued equity market. Let’s just say the market is expensively priced.
2015-07-11 00:00:00 Global Investors: You Should Be Paying Attention to this Economic Indicator by Frank Holmes of U.S. Global Investors
In addition to our own macro models, BCA Research , a highly respected independent research company, pointed out that PMIs in developing economies have plunged to new lows. The International Monetary Fund also revised downward its global growth forecast for 2015. On this account, bad news is good news, as central bankers are scrambling to stimulate economic growth.
2015-07-11 00:00:00 China Market Update by Andy Rothman of Matthews Asia
China’s equity markets have steadily declined for weeks, raising a torrent of questions and concerns. Given that China accounts for more global growth than the U.S., Europe and Japan combined, this week Andy Rothman, Investment Strategist at Matthews Asia, answers some of your most pressing questions.
2015-07-10 00:00:00 More Evidence of China Slowing Permeating Asia by Bryce Coward of GaveKal Capital
Yesterday and today were host to a few more macro data points all signaling basically the same thing – a synchronized slowdown in Asia which appears to be driven by China. In the five charts below we show that Chinese CPI remains anemic while PPI just made a new cycle low, Australian unemployment ticked up, Japanese bank loans appear to be topping/rolling over, the Japanese economy watchers survey is rolling over, and Japanese machinery orders excluding ships keeps weakening.
2015-07-10 00:00:00 China Market Update by Andy Rothman of Matthews Asia
China’s equity markets have been in steady decline for several weeks, raising a lot of questions about the potential impact on the world’s second-largest economy. Given that China accounts for more global growth than the U.S., Europe and Japan combined, this is an important topic for investors.
2015-07-09 00:00:00 While Attention Has Been On China, EM Latin America Keeps Taking It On The Chin by Eric Bush of GaveKal Capital
EM Latin America stocks are by far the worst performing stocks in the world this year. So even though all eyes are on China at the moment, as Bryce recently pointed out, the Chinese stock market doesn’t matter much for non-Chinese investors.
2015-07-07 00:00:00 A First-Half Letter to Clients: Robert Shiller on the Valuation Quandary by Dan Richards (Article)
Since 2008, I have posted a template for a client letter each quarter as a starting point for advisors who want to send clients an overview of the period that just ended and some thoughts looking forward. This quarter’s letter addresses one of today’s most taxing questions for advisors and investors alike: How to deal with the quandary presented by today’s valuation levels on U.S. stocks.
2015-07-07 00:00:00 Asia Better Positioned to Handle a Hike by Sponsored Content from Invesco (Article)
It’s no surprise investors are concerned about whether a Fed rate hike will cause a replay of 2013’s taper tantrum meltdown in Asia. In our view, Asian markets are better positioned today to withstand short-term deterioration in global sentiment when the Fed decides to hike rates.
2015-07-07 00:00:00 Emerging-Market Stocks: Back on the Map by Milton Ezrati of Lord Abbett
After the volatility of the past few years, conditions once again appear favorable for this asset class.
2015-07-06 00:00:00 Exporting the “Bacon Genie” and Other Reasons to Be Bullish by Brooks Ritchey of Franklin Templeton Investments
From “Bacon Genies” to “Snuggies,” there’s little doubting Americans have a thirst for consumer goods, even those that don’t always appear to serve much practical purpose. Brooks Ritchey, Senior Managing Director at K2 Advisors®, Franklin Templeton Solutions®, explores how an evolving consumer culture is spreading throughout the globe, and how he and his team are positioning their portfolios with these types of macro considerations in mind.
2015-07-06 00:00:00 US Equity and Economic Review For the Week of June 29-July3; Some Weakness Technical Emerging by Hale Stewart of Hale Stewart
The biggest news last week was the employment report, which contained a headline number (223,000) a bit weaker than we’ve gotten used to. But, there is a very reasonable explanation.
2015-07-02 00:00:00 Home of the Free, Land of the Entrepreneur by Frank Holmes of U.S. Global Investors
Where else but in America can a startup such as Uber be valued at $50 billion, higher than 80 percent of the companies in the S&P 500 Index, only six years after its founding? Where else but in America can someone reach billionaire status by inventing a new type of hosiery, as Sara Blakely did with Spanx? Before her now-ubiquitous undergarments were worn by women—and now men—all over the globe, Blakely was so broke that she had to write her own patent without the help of an attorney.
2015-07-01 00:00:00 The Smartest Man is Wild about Innovation by Byron Wien of Blackstone
For the past fifteen years I have written annually about a person I have come to call “The Smartest Man in Europe.” For new readers, he is a finance person in his 80’s who has built his reputation by identifying important trend changes early and putting serious money behind his conclusions. Descended from a mercantile family that operated canteens selling food and weather protection along the Silk Route, he was educated in Europe, trained in New York and returned home to take advantage of the wealth-creating opportunities resulting from the post-war recovery.
2015-07-01 00:00:00 The 2015 Mid-Year Geopolitical Outlook by Bill O’Grady of Confluence Investment Management
As is our custom, at mid-year, we update our geopolitical outlook for the rest of the year. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international situation into year’s end. It is not designed to be exhaustive; instead, it focuses on the “big picture” conditions that we believe will affect policy and markets going forward. They are listed in order of importance.
2015-07-01 00:00:00 Growth Matters by Mark Mobius of Franklin Templeton Investments
We have found that companies in the consumer or retail space with a high market share can benefit from rising consumption and GDP per capita. These investments are particularly attractive if profit margins can be improved.
2015-06-27 00:00:00 $8 Trillion Alternative Energy Boom Is a Win for Copper by Frank Holmes of U.S. Global Investors
As the world’s population continues to grow, and as more people in developing and emerging countries gain access to electricity, the role alternative energy sources such as wind, solar and geothermal play should skyrocket. Between now and 2040, a massive $8 trillion will be spent globally on renewables, about two thirds of all energy spending, according to Bloomberg New Energy Finance. Solar power alone is expected to draw $3.7 trillion.
2015-06-26 00:00:00 India's Structural Challenges by Sudarshan Murthy of Matthews Asia
India is in need of sweeping reforms in order to realize the full power of its entrepreneurial talent and to ensure social improvements for its poor and middle class. Despite some encouraging efforts, the Modi government may need significant time to carry out such reforms, as its many public institutions are still a far cry from being considered inclusive—meaning they lack such attributes as well-defined property ownership rights, flexible labor policies and all-encompassing political representation.
2015-06-24 00:00:00 Handicapping Bubbles and Shocks by Kristina Hooper of Allianz Global Investors
Kristina Hooper, US Investment Strategist for Allianz Global Investors, explains the results of the 2015 Allianz Global Investors RiskMonitor Survey, a global study of prevailing views on portfolio construction, asset allocation and risk among a cross-section of institutional investors.
2015-06-23 00:00:00 How Small Mistakes Can Boost Your Credibility by Dan Richards (Article)
An advisor struggled to convert meetings with prospects into clients. Then he began describing how he’d helped existing clients in a way that made him more credible and sincere.
2015-06-23 00:00:00 Cyber Security and Terrorism: Case Studies by Kaisa Stucke of Confluence Investment Management
This week we will look at two case studies of cyber attacks aimed at sovereign nations, the Estonian cyber attacks in 2007 that spanned three weeks and the multi-faceted attacks in Georgia in 2008. We will then look at the current state of international cyber attack research, readiness and cooperation. We have had the pleasure of talking to the NATO Cooperative Cyber Defence Center of Excellence about their work and will communicate their vision and challenges.
2015-06-22 00:00:00 A Chinese Swap Meet by Andy Rothman of Matthews Asia
The new local bond swap program of China’s Communist Party is its latest effort to manage debt. It aims both to make the amount and structure of local government debt more transparent, and to reduce the financing burden of local government debt. Could this be considered a version of quantitative easing or a bailout? Could it lead to local government defaults?
2015-06-22 00:00:00 Global Review and Equity Commentary: May 2015 by Team of Thomas White International
The decline in U.S. economic activity during the first quarter was more than earlier estimates, and appears to have weakened business sentiment in other parts of the world. Most of the fall in U.S. aggregate output was due to temporary factors such as adverse weather and port disruptions that led to delayed export shipments. The stronger dollar also reduced the earnings growth of large U.S. corporations with a global footprint.
2015-06-19 00:00:00 Global Economic Perspective: June by Team of Franklin Templeton Investments
In spite of lingering concerns about Greece’s fate, the European economy would appear to have hit a sweet spot marked by steadily improving growth and inflation figures along with declining unemployment.
2015-06-19 00:00:00 Northern Trust Perspective by Jim McDonald of Northern Trust
While we expect U.S. growth to see some improvement from the slow start to the year, we think optimists are likely to be disappointed at the overall pace of growth. The U.S. economy has averaged 2.2% growth since the financial crisis, and we don't see a material acceleration during the near-to-intermediate term. The prospect of a pending increase in the Fed funds rate has contributed to a rise in interest rates and strengthening of the dollar, both of which serve as a constraint on growth. We also don't see much upside to the U.S. economy through materially better growth outside the U.S.
2015-06-18 00:00:00 Picking U.S. Energy, Housing and Other Credit Sectors for the Long Haul by Mark Kiesel of PIMCO
Persistent trends in economies around the world are providing opportunities for focused, long-term investors in the credit markets. Mark Kiesel, Chief Investment Officer Global Credit, discusses promising themes PIMCO sees over the next three to five years, including the U.S. energy revolution, the rising Asian consumer, the ramifications of global banking regulation and latent demand in the U.S. housing market. PIMCO’s global investment professionals gathered in May at our annual Secular Forum to discuss our long-term, or secular, views of economies and markets around the world.
2015-06-17 00:00:00 Weighing the Week Ahead: A Market Message for the Fed? by Jeffrey Miller of NewArc Investments, Inc.
While few expect a change in Fed policy at this week’s FOMC meeting, it will still be the center of attention. With last week’s interest rate jump, I expect the theme to be: Is the market sending the Fed a message?
2015-06-15 00:00:00 Luxury Spending in China by Winnie Chwang of Matthews Asia
Over the past decade, conspicuous consumption has been seen across China and Hong Kong, emerging as a natural by-product of an economy experiencing rapidly rising levels of affluence. Across China, there have been stories of unbelievable extravagance, from diamond-studded smartphone cases to gold-plated sport cars and replicas of homes that resemble the White House. However, these days of excessive spending in China may already have waned. Asia Weekly explores.
2015-06-12 00:00:00 Luxury Spending in China by Winnie Chwang of Matthews Asia
Over the past decade, conspicuous consumption has been seen across China and Hong Kong, emerging as a natural by-product of an economy experiencing rapidly rising levels of affluence. Across China, there have been stories of unbelievable extravagance, from diamond-studded smartphone cases to gold-plated sport cars and replicas of homes that resemble the White House. However, these days of excessive spending in China may already have waned. Asia Weekly explores.
2015-06-10 00:00:00 Low Valuations Tough to Come By, Wherever You Look by Jennifer Thomson of GaveKal Capital
It is no secret that, whichever way we look at valuations, we think stocks are expensive. One of the more unique methodologies we employ to get a sense of where equity valuations are is to look at them grouped according to ‘buckets’ designated by pertinent levels.
2015-06-09 00:00:00 China’s Roaring Market by Edmund Harriss of Guinness Atkinson Asset Management
Chinese stock markets have roared in the past year, since May 2014. The Chinese government has announced a $40 billion “Silk Road” fund to build a network of railways and air links to bring China and Central Asia closer together; China launched the Asia Infrastructure Investment Bank in October 2014, and since then there has been a rush to join, not only from China’s neighbors, but also five of the G7 leading economies.
2015-06-08 00:00:00 Emerging Asia Pacific: Economy Trends Update -- April 2015 by Team of Thomas White International
During the first quarter, news from emerging Asia was dominated by the deep slowdown in China and its adverse impact on a host of other Asian economies, such as South Korea, Malaysia, Thailand, and Taiwan. In other developments, India grew faster than China, Korea saw a large decline in its exports, and Indonesia struggled to jumpstart its economy.
2015-06-07 00:00:00 US Equity and Economic Review For the Week of June 1-5; Are the Weekly Charts Topping Out? Edition by Hale Stewart of Hale Stewart
The Federal Reserve released the latest Beige Book, which offered the following overview of the economy.
2015-06-06 00:00:00 Thoughts from the Frontline: Cleaning Out the Attic by John Mauldin of Mauldin Economics
My goal is to present a simple outline of the policies we need to pursue as a country in order to get us back to 3–4% annual GDP growth.
2015-06-05 00:00:00 Recovery Rallies, Is Six Years Enough by Craig Callahan of ICON Advisers, Inc.
Contrary to the bearish headlines, we at ICON believe that we are in the midst of a long-term recovery. With our valuation methodology as our guide, we believe there is enough value in the market to sustain a continued recovery. Furthermore, as we saw with the post 1987 market recovery, bull markets can last longer than 6 years. We believe there is still room for market growth in the current environment.
2015-06-05 00:00:00 Billions and Billions Pour into India and China by Frank Holmes of U.S. Global Investors
It’s been a little over a year since Narendra Modi took office in India, and so far the results have been mostly positive for the South Asian country and the surrounding region. Among other achievements, Modi’s government has managed to enact important policy reforms, increase public investments in infrastructure, lower food inflation and generally open India up to business on a global scale.
2015-06-04 00:00:00 Emerging-Market Stocks for Flywheel Fashionistas by Sammy Suzuki of AllianceBernstein
The passion for gym-to-street fashion has gone global, and shows no sign of losing vitality. It’s also keeping business humming for a network of yarn spinners, fabric mills and sneaker makers across emerging Asia.
2015-06-02 00:00:00 State of Emerging Markets: All About Those [Central] Banks by Mark Mobius of Franklin Templeton Investments
Moving into the second quarter of 2015 and beyond, we believe a complex global background appears broadly favorable for emerging markets.
2015-06-02 00:00:00 Are Bond Investors Crying Wolf? by Niels Jensen of Absolute Return Partners
Since we last wrote to you there has been quite a dramatic increase in interest rates in most markets and in Germany in particular. In this letter we look into whether this is the beginning of something much bigger. For those of you with too little time on your hands we conclude that it is NOT. Economic growth will stay low for many years to come, and central banks have no intention of suddenly flooding the bond market with sell orders.
2015-06-01 00:00:00 Stocks Still Have Some Room to Grow by Vadim Zlotnikov of AllianceBernstein
Stocks have been on a pretty strong run in recent years, and some investors are nervous that the market could run out of steam. We think there’s still more upside potential.
2015-05-31 00:00:00 Reflections From a Whirlwind Tour of Asia by Carl Tannenbaum of Northern Trust
Reflections From a Whirlwind Tour of Asia; Roads and Ports are Pathways to U.S. Prosperity
2015-05-29 00:00:00 Can China Handle Political Satire? by Patricia Huang of Matthews Asia
Comic entertainment in China is taking some turns. But exactly what topics one can poke fun at is still a bit murky in this authoritarian state. Is China ready for political satire? Asia Weekly explores.
2015-05-28 00:00:00 World War D—Deflation by John Mauldin of Mauldin Economics
Everywhere I go I’m asked, “Will there be inflation or deflation? Are we in a bull or bear market? Is the bond bulk market over and will interest rates rise?" The flippant answer to all those questions is “Yes.” And that can be the correct answer as well, but it depends on what your time frame is and what tools you use to measure the markets and inflation.
2015-05-27 00:00:00 European And Asian Stocks Are Approaching Overbought Levels by Team of GaveKal Capital
Unlike the majority of this six year old bull market, European and Asian stocks are outperforming North American stocks in 2015 (yes even measured in USD). Asian stocks are nearly 12% higher, European stocks are nearly 10% higher and North America stocks are just about 3%. This surge in Asia and European are starting to hit overbought levels judging by the the % of stocks above its 100-day and 200-day moving average.
2015-05-27 00:00:00 Global Economic Perspective: May by Team of Franklin Templeton Investments
Having come through 2015’s first quarter with virtually no growth, the US economy is generally expected to pick up during the rest of this year. Indeed, as we move into a new quarter and shake off the effects of a significant West Coast dock strike and severe winter weather, forward indicators have pointed toward better growth.
2015-05-27 00:00:00 What America Can Learn from China’s Infrastructure by Frank Holmes of U.S. Global Investors
As one of the greatest nations on the planet, the United States excels in a number of areas, innovation and entrepreneurship foremost among them. But something you might be hard-pressed to find at the top of anyone’s best-of list is infrastructure—specifically roads, rail and mass transit.
2015-05-23 00:00:00 Northern Trust Perspective by Jim McDonald of Northern Trust
Our monthly Perspective newsletter keeps you apprised of current market and economic conditions across an array of topics including: US, European and Asian markets, global real estate and commodities.
2015-05-21 00:00:00 Global Review and Equity Commentary: April 2015 by Team of Thomas White International
As expected, the global economy slowed during the first quarter but should gain momentum in the coming months. The U.S. economy almost came to a standstill during the first three months of the year as adverse winter weather limited activity. Consumer spending moderated and construction activity slowed, while lower oil prices discouraged businesses in that sector from capital investments. The stronger dollar and labor disputes at some of the seaports limited export gains, and led to a widening of the U.S. trade deficit.
2015-05-21 00:00:00 Factoring in Politics when Investing by Robert Harvey of Matthews Asia
Factoring in political backdrops typically makes investment decisions more complex. What should investors consider in trying to mitigate political risk?
2015-05-21 00:00:00 Slow Growth: A Tale of Two Theories by Shane Shepherd of Research Affiliates
Global demand is dragging. Savings far exceeds investment. The combination is a surefire recipe for long-term low to negative growth in the developed markets—and core U.S. asset returns of 1% or lower over the next decade.
2015-05-21 00:00:00 China Bonds Still Offer Opportunities by Hayden Briscoe of AllianceBernstein
As more corporate bond issuers in China run into financial trouble, investor anxiety about the possibility of a broader market collapse has understandably increased. We don’t think it’s time to man the lifeboats, however; on the contrary, we believe that Chinese bonds still offer good opportunities for research-driven investors.
2015-05-18 00:00:00 Investor Sentiment Around the World by Mark Mobius of Franklin Templeton Investments
We certainly don’t want to jump to any conclusions about potential market performance based on investor sentiment (or any one indicator for that matter), but it reminds me of the late Sir John Templeton’s famous words: ‘Bull markets are born on pessimism, grow on skepticism and die on euphoria.
2015-05-16 00:00:00 Secular Versus Cyclical: Notes from SIC 2015 by John Mauldin of Mauldin Economics
The consensus I’m hearing and reading from the 500+ attendees at the recent Strategic Investment Conference is that this was the best ever. It was certainly intense, with more divergent views presented this year than at previous conferences. Plus, the range of topics was rather dramatic. This year I was able to listen to all but one of the presentations, and I want to share with you my notes and takeaway thoughts.
2015-05-15 00:00:00 “Wrestling with Something Else”: Why this Gold Bear Market Is Different by Frank Holmes of U.S. Global Investors
Earlier this week, I had the pleasure to appear on Jim Puplava’s Financial Sense Newshour radio program and discuss the state of the gold market. Along with my peers John Doody of the Gold Stock Analyst and Ross Hansen of Northwest Territorial Mint, I shared my thoughts on how we arrived in the current bear market, what factors might help us get out of it and the role real interest rates play in prices.
2015-05-15 00:00:00 Diagnosing China's Debt Disease by Andy Rothman of Matthews Asia
China suffers from a serious case of “debt disease,” but the treatment and side effects may not be as severe as some expect, and dramatic credit tightening is very unlikely. Debt is concentrated among state-owned firms, while the private firms that generate most of China’s new jobs and investment have already deleveraged. The biggest risk is the high level of debt among real estate developers.
2015-05-14 00:00:00 Developed Asia Pacific: Economy Trends Update April 2015 by Team of Thomas White International
Though Japanese exports exceeded imports in March 2015, weak domestic spending appears to have impacted the country’s nascent economic recovery. Wage growth needs to trickle down to workers employed in smaller Japanese firms, which would also push up inflation. Thankfully, the Bank of Japan has said it will hold its stimulus program in place until economic growth picks up pace.
2015-05-12 00:00:00 Louis-Vincent Gave: The World's Most Crowded Trade by Robert Huebscher (Article)
Investors are paid to adapt, not to forecast, according to Louis-Vincent Gave, and three changes are occurring globally that all portfolios must accommodate. One of them is a position that is missing from virtually every investor's allocation.
2015-05-12 00:00:00 Time to look at South Korea by Richard Bernstein of Richard Bernstein Advisors
Our global investments continue to focus on the secondary effects of the deflating global credit bubble. The bubble’s deflation has left the world awash in capacity, and we expect countries to fight for market share as a result of that overcapacity.
2015-05-12 00:00:00 Korea's Booming Health Care Sector by Soo Chang Lee of Matthews Asia
Korea’s health care companies have long faced challenges competing with global players that have secured patents and intellectual property for products. But is Korean pharma finally prepared to move beyond generics?
2015-05-11 00:00:00 On My Radar: Life is Great! by Steve Blumenthal of CMG Capital Management Group
The primary need of investors is shifting and the risk dynamics has changed. Gone are those wonderful defined benefit plans. This is the first generation of retirees retiring with control of their financial assets. That’s good news for your advisory business, yet, with zero bond rates and 10-year forward returns for equities in the 2% to 4% range, the challenges loom large.
2015-05-08 00:00:00 Inequality, Immigration, and Hypocrisy by Kenneth Rogoff of Project Syndicate
Europe’s migration crisis exposes a fundamental flaw, if not towering hypocrisy, in the ongoing debate about economic inequality. Wouldn’t a true progressive support equal opportunity for all people on the planet, rather than just for those of us lucky enough to have been born and raised in rich countries?
2015-05-08 00:00:00 Global Economic Overview and Equity Commentaries: March 2015 by Team of Thomas White International
The global economy is facing subdued growth in the short term, as adverse weather and a stronger currency have slowed the pace of U.S. expansion. Unusually severe winter weather on the U.S. East coast restricted business and consumer activity during the first three months of the year.
2015-05-07 00:00:00 Emerging Markets May Make a Good Draft Pick to Add to Portfolios by Burt White of LPL Financial
The evaluation process NFL football teams go through to prepare for the NFL draft, which took place this past weekend, is not unlike the investment decision-making process.
2015-05-07 00:00:00 Region Insights – Europe – Investment Opportunity in Europe is Compelling by Derrick Tzau of Rainier Funds
While Europe abounds in world-class companies, macro concerns in 2014 obscured compelling opportunities for price appreciation and earnings power that we believe will surprise to the upside in 2015. Investors have woken up to the opportunity in the first two months of 2015 and many European exchanges are off to a fast start. We think more gains are ahead, particularly in small- to mid-size companies in Europe.
2015-05-06 00:00:00 Can Assad Survive? by Bill O’Grady of Confluence Investment Management
Rebels in Syria have been making steady gains against forces loyal to the Assad regime and these gains have recently accelerated. The recent rebel victories are raising questions about the Assad regime’s ability to survive. In this report, we recap the problems the Syrian government faces, including internal dissent and military losses. We discuss the growing evidence of a Turkey-Saudi axis that may be aiding the rebels to weaken or eliminate Assad and pressure Iran. From there, we examine the potential Iranian and American responses to the rebel gains and support from Riyadh and Ankara.
2015-05-05 00:00:00 Too Late to Invest in EM? by Heidi Richardson of BlackRock
While emerging market stocks have had a good 2015 so far, this may still be an attractive time to invest for invest for investors who have been sitting on the EM sidelines.
2015-05-04 00:00:00 The Long Reach of Technology in Taiwan by Jim Harvey, Dilip Badlani of The Royce Funds
Taiwan is one of the high-tech epicenters of the world, and while it headquarters some of the industry's most dominant players, the country is also home to a large and diverse group of smaller companies that provide a vital supporting role to the growing demands of the global markets.
2015-05-02 00:00:00 Asia Weekly China's Coming IPO Reform by Hardy Zhu of Matthews Asia
As China continues shifting toward a more market-based economy, what government powers are really being relinquished? Asia Weekly takes a look at changes in the IPO process.
2015-05-01 00:00:00 After the Market Crisis: Does Diversification Still Work? by Russ Koesterich of BlackRock
Diversification may not have worked during the last market crisis, but this isn’t an argument for skipping exposure to international stocks.
2015-04-29 00:00:00 Risk Marches On by Burt White of LPL Financial
The latest data releases pointing to weak U.S. new home sales and manufacturing Purchasing Managers’ Index (PMI) have investors guessing about the possible messaging coming out of this week’s Federal Open Market Committee (FOMC) meeting.
2015-04-28 00:00:00 As Milestones Are Crossed, Be Selective by Russ Koesterich of BlackRock Investment Management
Stocks around the world rewrote the record books last week. In the United States, the Nasdaq Composite Index eclipsed its 2000 peak, advancing 3.26% to close the week at 5,092. In Japan, the Nikkei Index climbed above 20,000 for the first time in 15 years, while China's equity market continues to defy gravity.
2015-04-24 00:00:00 Asian Markets Host Potential for Long Term Growth by (Article)
In this latest video update, Sanjeev Lakhani, CFA, Co-Portfolio Manager of the International Select Equity Fund, highlights a recent trip to Asia and discusses why India, Indonesia, China and Japan offer long term growth. Historically, China has been a difficult market to invest in, however, there do appear to be signs that it is changing. India and Indonesia both have reform-minded leaders who plan to invest in their countries infrastructure. India has reduced its account deficient and has benefited from low oil prices.
2015-04-24 00:00:00 China's First SOE Default: More to Come? by Teresa Kong of Matthews Asia
A power equipment maker just became China’s first state-owned company to default on domestic debt. Is this a strategic move by the central government to further liberalize its capital markets, and to reform its state-owned enterprises?
2015-04-21 00:00:00 The AIIB by Bill O’Grady of Confluence Investment Management
China has founded the Asian Infrastructure Investment Bank (AIIB) to compete with the World Bank and the Asian Development Bank. The U.S. has opposed the creation of this bank but, despite administration opposition, 57 nations have joined. A chorus of commentators have suggested that the founding of this bank may mark the end of U.S. hegemony. In this report, we describe the AIIB, including its members and capitalization. Next, we cover the conventional wisdom surrounding the bank, and follow up with our analysis of the real impact of the bank. We conclude with potential market ramifications.
2015-04-21 00:00:00 Something To Keep In Mind During Earnings Season... by Team of GaveKal Capital
As we enter the heart of the S&P 500 1Q earnings season, and the CNBCs of the world focus on the number of companies that (surprise) beat earnings expectations once again, remember this fact: earnings expectations have been beaten down over the past six months. Let's take a quick tour of the developed world to illustrate this point.
2015-04-20 00:00:00 Pockets of Value in the Stock Market by Russ Koesterich of BlackRock
Given the headwinds facing U.S. stocks, investors may want to consider tilting their stock portfolios toward these sectors and geographies offering relative value.
2015-04-17 00:00:00 Irrational Expectations by Andy Rothman of Matthews Asia
Do we have irrational expectations for the Chinese economy? On the one hand, we asked China to restructure and rebalance its economy, and it has delivered. It shrunk its state sector, and privately owned firms now account for more than 80% of employment and almost all new job creation. Almost all prices are set by the market. Investment growth is slowing and consumption is now the engine of economic expansion. China’s service sector is now larger than its manufacturing and construction sectors.
2015-04-16 00:00:00 Global Business Cycle Deceleration and US Conundrum by Alexander Giryavets of Dynamika Capital L.L.C.
The Global Business Cycle is decelerating while the regional Asian and European Subcycles are recovering. This poses the US between a hammer and a hard place as it gets hurt by each single one of them. Will it get crushed or stand strong in this global interplay?
2015-04-16 00:00:00 Three Portfolio Moves to Consider Now by Russ Koesterich of BlackRock
While the first quarter largely played to script, there were a few surprises. Russ explains, noting three portfolio moves to consider as the second quarter kicks off.
2015-04-16 00:00:00 Finding Value in Declining Commodity Prices by Frank Holmes of U.S. Global Investors
I’m going to begin with a bit of good news. Below is our China Region Fund (USCOX). As you can see, not only has it broken above its 50- and 200-day moving averages, but it’s also trading at four-year highs. And since this chart was created early last week, the fund has climbed even higher, to $9.53 as of this writing.
2015-04-16 00:00:00 Implications of a Fed Funds Rate Hike on Asian Securities by Gerald Hwang of Matthews Asia
The prospect of a higher U.S. federal funds rate can make U.S. cash and short duration Treasurys look more attractive vs. risky assets. The effect of higher U.S. short rates is felt across all asset classes, regardless of the pattern of cash flows or currency of denomination. We can expect some market reallocation out of risky assets and into risk-free assets. But why does the market seem to fear a wholesale shift out of risky assets and why might that view be unjustified? In the second installment of a two-part series, Matthews Asia Portfolio Manager Gerald Hwang, CFA, examines the ways in wh
2015-04-14 00:00:00 Expect Further Divergence in Emerging Market Economies by Michael Gomez, Lupin Rahman of PIMCO
Each quarter, PIMCO investment professionals from around the world gather in Newport Beach to discuss the firm’s outlook for the global economy and financial markets. In the following interview, portfolio managers Michael Gomez and Lupin Rahman discuss PIMCO’s cyclical outlook for the emerging markets (EM).
2015-04-14 00:00:00 China: New Year, New Opportunity? by Burt White of LPL Financial
China will release its first quarter 2015 gross domestic product (GDP) report this week on April 14, 2015, with the market expecting a 7% year-over-year increase. Regardless of whether China hits that target, its stock market has already been positive so far this year. In this year of the goat in 2015, global investors have not been sheepish about buying Chinese stocks, powering the Shanghai Composite 25% higher so far in 2015 amid prospects for more monetary stimulus and policy reforms.
2015-04-14 00:00:00 The Iran Framework by Bill O'Grady of Confluence Investment Management
On April 2, the P5+1 and Iran announced a framework to deal with Iran’s nuclear program. The framework is a roadmap to establishing a final agreement in June and could be a major step toward delaying Iran’s entry into the “nuclear club.” This report begins with a short history of Iran’s nuclear program. Next, we review the details of the framework and address the broader policy issues surrounding Iran’s nuclear program. An analysis of the real issue, regional hegemony, follows along with a review of the political factors of the deal. We conclude with the potential market effects.
2015-04-13 00:00:00 Asia’s Multilateralism by Joseph Stiglitz of Project Syndicate
In March, the United Kingdom, Germany, France, and Italy joined more than 30 other countries as founding members of the new Asian Infrastructure Investment Bank, which will do what existing institutional arrangements cannot: help Asia meet its massive infrastructure needs. So why has the US sought to undermine the effort?
2015-04-11 00:00:00 Finding Value in Declining Commodity Prices by Frank Holmes of U.S. Global Investors
So what’s the deal with Chinese equities right now? After all, China’s economic growth for the first quarter of the year cooled to a six-year low of 7 percent. The market surge is mostly attributable to monetary easing and government policy changes such as housing stimulus and modernization of the country’s financial structure. But there’s more at work.
2015-04-11 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust
Today’s Oil Retreat Is at Odds with Long-Term Trends; A New Bank Creates Controversy in Asia; Solving the U.S. Wage Conundrum
2015-04-10 00:00:00 China for Sale? by Robert Horrocks of Matthews Asia
In recent years, some China watchers have been wondering where the “smart money” is going? How telling are the real estate transactions of the region’s tycoons? And do concerns still exist over the growth in loans to the corporate sector? Matthews Asia’s CIO Robert Horrocks, PhD, explores.
2015-04-10 00:00:00 Where Positive Economic Surprises Are (And Aren't) Happening by Team of GaveKal Capital
There is a geographic disparity amongst the Citi Economic Surprise Index. Economies, both developed and emerging, are surprising to the upside in Asia and Europe while economies in the western hemisphere are not doing as well (at least in terms of meeting and exceeding expectations). Below we show some of the more interesting charts.
2015-04-08 00:00:00 Policy Paranoia by Robert Stimpson of Oak Associates
The present version of policy paranoia encompasses concerns over impending interest rate hikes, the rapid appreciation of the US dollar, a bloated US government balance sheet, weak international economies and increased probability of a crisis in certain Latin American countries. While legitimate, we do not believe the current ghosts are any more imminently destructive today than over the past six years.
2015-04-08 00:00:00 Will a Weak Jobs Report and Poor Productivity Give the Fed Pause? by Jeremy Schwartz, of WisdomTree
Last Friday, Professor Jeremy Siegel and Jeremy Schwartz sat down with Sam Chandan, founder and chief economist at Chandan Economics, to discuss the unexpectedly weak jobs report, productivity, low interest rates and implications for the housing market.
2015-04-07 00:00:00 The New World Order: Part IV by Bill O'Grady of Confluence Investment Management
The final installment of our series examines how, in light of winning the Cold War, policymakers have been unable to settle on a set of key priorities and offers glimpses of a new policy emerging. The US never wanted to be a superpower; its founding story is one of wresting independence away from a colonial power. Now that the existential threat of communism is over, the political class has struggled to create a foreign policy that can simultaneously provide the required hegemonic global public goods and create a working economic policy and political coalition that will build domestic harmony.
2015-04-06 00:00:00 Brobdingnagian Top? by Jeffrey Saut of Raymond James
According to Wikipedia, “Brobdingnag is a fictional land in Jonathan Swift's satirical novel about Gulliver's Travels whose land is occupied by giants. Lemuel Gulliver visits the land after the ship he is travelling on is blown off course and he is separated from a party exploring the unknown land.” I thought of Brobdingnag as I stared at a chart of the D-J Transportation Average ($TRAN/8605.31) last week, which looks like it is making what a technical analyst would term a giant broadening top, or in my terms a “Brobdingnagian Top?”
2015-04-01 00:00:00 The Coming Chinese Crackup? by Andy Rothman of Matthews Asia
Prominent China scholar David Shambaugh has turned bearish on the Middle Kingdom, which offers us the chance to review our own thinking about China’s prospects. As head of the China Policy Program at The George Washington University, Shambaugh is a respected analyst of Chinese Communist Party affairs, so his WSJ op-ed, “The Coming Chinese Crackup,” has received much attention. This issue of Sinology explores how Shambaugh’s view now is an about face from his prior analyses, and why his current arguments may be flawed.
2015-04-01 00:00:00 China to Take the Reins in Funding Regional Infrastructure Projects by Frank Holmes of U.S. Global Investors
This Tuesday marked the last day that countries could submit their applications to become founding members of the new China-led Asian Infrastructure Investment Bank (AIIB). As of this writing, a little over 40 nations have either already been approved or have applied for membership, including strong U.S. allies such as Britain, Germany and Australia.
2015-04-01 00:00:00 Small Korean Companies Punch Above Their Weight by Liliana Castillo Dearth of AllianceBernstein
South Korea’s cultural exports are spreading around the globe. While the country’s corporate landscape is dominated by huge conglomerates, we think small-cap companies stand to benefit most from the world’s growing fascination with all things Korean. It might be time for investors to take a closer look.
2015-04-01 00:00:00 For Canadian Pension Funds, It’s Time to Go Global by Erin Bigley of AllianceBernstein
Pension funds in Canada have long relied on a simple fixed-income strategy: buy Canadian. And for a long time, this worked wonders. But times are changing, and our research suggests that swapping a Canada-only approach for a more globalized portfolio will provide better risk-adjusted returns in the future.
2015-03-31 00:00:00 U.S. Isolated in Opposition to Chinese Bank by John Browne of Euro Pacific Capital
Over the past few decades while the economic power of the Chinese has grown exponentially, many observers have been surprised by the relative willingness of China to operate within the financial and economic framework established by the dominant Western order. But it should now be blatantly clear that Beijing prefers to act slowly, deliberately and quietly to advance its agenda.
2015-03-31 00:00:00 Exploring Four Myths by Byron Wien of Blackstone
In talking with investors, I find four concepts prevail among the consensus that I believe may be wrong. In the interest of full disclosure, it is fair to say that at various points in time I have subscribed to each of these ideas. They are: 1. American Exceptionalism is a thing of the past. 2. The price of oil is likely to stay low for a long time. 3. Europe’s economy is in a slow growth deflationary trap. 4. Abenomics is not working, and Japan is in danger of falling back into a recession. I decided to explore each of these
2015-03-31 00:00:00 Fit & Focused by Mark R. Kiesel of PIMCO
Many powerful forces are driving markets and asset prices; chief among them are global monetary policy, technicals and fundamentals. We use rigorous top-down and bottom-up analysis to identify the best sectors and companies around the world. We see opportunities in the U.S. (cyclical consumer and housing sectors), Europe (equities, bank capital securities, high yield bonds and corporate hybrids), China (property, technology and Macau) and Japan (cyclical industries, exporters and financials).
2015-03-30 00:00:00 Dividend Value Investing: No Time for Suspension of Disbelief, Part 2 by Meggan Walsh of Invesco Blog
While investors may be riveted by Hollywood’s surprise endings and cliffhangers, they generally aren’t fond of unexpected plot twists in the market. So here’s a spoiler alert. The operating results of companies in the current cycle have been quite strong, and many investors expect this to continue. But we’ve seen enough plot twists over time to know this can be a risky assumption.
2015-03-28 00:00:00 International Equity Commentary: February 2015 by Team of Thomas White International
International equity prices gained during February on expectations that the central banks in Europe and Japan would continue their quantitative easing programs, while the U.S. Federal Reserve could possibly delay its interest rate hikes. At the same time, economic trends from most major economies remained relatively stable. After two quarters of robust gains, the U.S. economy expanded at a slower pace during the fourth quarter of 2014, as expected.
2015-03-27 00:00:00 Emerging Markets Equity Commentary: February 2015 by Team of Thomas White International
Emerging Market Equities Emerging market equity prices advanced during the month of February on signs of improvement in global economic trends as well as expectations about quantitative easing in Europe and Japan. Encouraged by reduced inflation risks after the oil price decline, some of the emerging market central banks have also lowered interest rates in recent months.
2015-03-27 00:00:00 Enjoying the Shade by Patricia Huang and The Matthews Asia Investment Team of Matthews Asia
As commentator Cherian George has said: “The legacy passed down to today’s Singaporeans isn’t one of random opportunism…There is nothing accidental about it.” Singapore’s first prime minister, Lee Kuan Yew, took charge of the city-state, transformed and drove it forward in the span of just a few decades. This week Matthews Asia pays tribute to this “giant of history.”
2015-03-27 00:00:00 In a Challenging Environment, Policy Easing Sweeps Through Asia by Adam Bowe, Tomoya Masanao, Isaac Meng of PIMCO
The key change to our cyclical outlook for Asia: We have further downgraded our growth forecast for China to the low-6% range as real borrowing rates remain elevated. In Japan, we expect growth to recover from last year's technical recession, following the delay in the next value-added tax (VAT) hike and the increase in the Bank of Japan's easing program.
2015-03-27 00:00:00 REITs in a Rising Interest-Rate Environment by Wilson Magee of Franklin Templeton Investments
Wilson Magee, director of global real estate and infrastructure securities, Franklin Real Asset Advisors®, believes this environment is causing many investors to search for alternative investments that can add an income-oriented asset to their portfolio as well as gain exposure to global economic growth potential. He outlines why he thinks it’s an opportune time for many investors to consider diversifying into global real estate through an actively managed investment vehicle.
2015-03-27 00:00:00 Deglobalization Redraws the Investment Map by Hayden Briscoe and Vincent Tsui of AllianceBernstein
Divergence between economies and financial markets has been a key macroeconomic trend over the last few years, and reflects in part the deglobalization of the worldwide supply chain. We expect the big winners to be countries and regions with large internal markets; the losers will be smaller countries which have yet to move up the export value chain.
2015-03-26 00:00:00 Latin America Is Blowing Up Your EM ETF Performance by Team of GaveKal Capital
On an equal-weighted, USD basis, the MSCI Emerging Markets Index is up just 0.99% YTD compared to MSCI World Index which is up 5.65%. So is this just a simple continuation of the trend of emerging market underperformance that has been in place over the last 4 years ? Yes, but with a caveat.
2015-03-25 00:00:00 US Economy Badly Disappoints Analysts' Expectations by Gary Halbert of Halbert Wealth Management
Today we will talk about an economic indicator that I have not written about before, which is compiled and reported monthly by CitiGroup, the American multinational banking and financial services corporation headquartered in Manhattan.
2015-03-24 00:00:00 The New World Order: Part II by Bill O'Grady of Confluence Investment Management
In the second installment of our four-part series we focus on two themes. First, we examine the global public goods the superpower provides, and second, we analyze how the U.S. has done so. The global hegemon often faces tensions between the desires of domestic constituencies and its foreign obligations. Every superpower negotiates these pressures and each tends to have its own ways of meeting both objectives. However, no superpower can subjugate the goals and aspirations of its citizens indefinitely. If the cost of hegemony becomes too high, a nation may be unable to maintain the position.
2015-03-20 00:00:00 Northern Trust Perspective by Team of Northern Trust
The long-telegraphed launch of quantitative easing by the European Central Bank (ECB) has added some accelerant to financial market trends in place so far this year. European stocks, which had been strong performers in local currencies, have continued their strong performance while European bond yields have declined even further.
2015-03-20 00:00:00 Key Questions for China Investors in 2015—Part III by Andy Rothman of Matthews Asia
In this final installment of a three-part Sinology series, Andy Rothman, Matthews Asia Investment Strategist, answers the question: is China’s property market heading for a crash? He also discusses what he believes are the biggest long-term risks to growth and stability—an absence of the rule of law and trusted institutions.
2015-03-18 00:00:00 Global Economic Perspective: March by Franklin Templeton Fixed Income Group® of Franklin Templeton Investments
IN THIS ISSUE: United States Prepares for Interest-Rate Hikes; But Much of the World Is Still in Monetary Easing Mode; European Outlook
2015-03-17 00:00:00 Japan: Why Stagnation Is the "Abe Normal" by Milton Ezrati of Lord Abbett
Until the prime minister draws the "third arrow"—structural reform—from his quiver, Japan's economic and investment prospects will remain limited.
2015-03-13 00:00:00 Prospect of U.S. Fed Hike & its Effect on Asian Assets, Part I by Gerald Hwang of Matthews Asia
How close are we to a U.S. Federal Reserve (Fed) rate hike? How would a hike affect Asian securities? These are the questions we explore in this two-part series of Asia Insight.
2015-03-13 00:00:00 Charting The Winners And Losers Of The Latest Surge In The USD by Team of GaveKal Capital
On March 4th we wrote in The Dollar Is Breaking Out Again And What It Means For Stocks that "for a variety of cyclical and structural reasons...stocks in North America tend to be the relative beneficiary of USD strength while stocks in other regions generally, but not always, tend to underperform. The negative correlation is especially strong for European stocks." Well, since then the USD has surged another 6% so we thought we'd review how things have played out.
2015-03-10 00:00:00 America's China Codependency by Michael Edesess (Article)
The massive Chinese investment in Treasury securities helps keep interest rates extremely low. This hugely increases the incentive for Americans to borrow. All that is needed is "collateral," and Americans will go out and borrow to their hearts' content and buy Chinese goods.
2015-03-10 00:00:00 On My Radar: Rut Ro Rastro by Steve Blumenthal of CMG Capital Management Group
At the beginning of each month, I like to look at a series of valuation metrics: Median PE, Price to Sales and Price to Operating Earnings. Let’s look at them today. The logic, of course, is simple. When expensively priced, reduce exposure and reduce return expectations. When inexpensively priced, overweight exposure and increase return expectations. Let’s also take a look at what has been driving the market higher. Some argue that individual investors are still on the sidelines. I don’t think so and I show evidence that they are almost as fully invested as they were at the 2000 and
2015-03-10 00:00:00 The 6th Anniversary of 676 by David Edwards of Heron Financial Group
On March 9th, 2009, the S&P 500 made an intra-day and 20 year low at 676.53. Millions of Americans drew a straight line from the mid-September 2008 failure of Lehman Brothers through that March low and projected that the S&P 500 would be zero by June. Armed with that projection, average investors liquidated hundreds of billions of dollars in stock investments, never to return. Those investors will never be able to retire.
2015-03-06 00:00:00 Opportunities in Global Financial Disintermediation by Dave Gallagher of Calamos Investments
Increasing financial disintermediation is a strong secular theme providing tailwinds in several financial industries, but a likely arduous and complicated process warrants the need for a disciplined focus on both risk and reward. The financial system essentially performs one basic function—the direct or indirect movement of funds from savers to borrowers or investors. Although financial disintermediation is formally defined as the shifting of funds from indirect to direct financing, the term is more commonly used to describe the increasing role of non-bank intermediaries.
2015-03-06 00:00:00 Malaysia: Too Indebted to Spend? by Satya Patel of Matthews Asia
Many Asian households are dependent on debt. Malaysia has been working to reshape its economy while addressing the risk of high household debt levels. Asia Weekly examines this issue.
2015-03-06 00:00:00 China’s Reforms: Will They Work? by Hayden Briscoe of AllianceBernstein
The internationalization of China’s currency is proceeding hand in hand with the liberalization of the country’s capital markets. If China can surmount its short-term challenges, the impact of these reforms on global economies and markets should be profound.
2015-03-05 00:00:00 The Dollar Is Breaking Out Again And What That Means For Stocks by Team of GaveKal Capital
The ICE US dollar index looks to have broken out of what has been a rather short-lived consolidation after the massive move since the middle of 2014. If this is in fact the start of another round of dollar strength, then stock investors should carefully consider where in the world to deploy cash into stocks. For a variety of cyclical and structural reasons, certain regions of the world tend to outperform in periods of USD strength and others lag. We'll try to shed some light on that with the below charts.
2015-03-05 00:00:00 India the Best-Performing Emerging Market by Frank Holmes of U.S. Global Investors
India had an incredible banner year. The world’s largest democracy, home to 1.25 billion people, was the best-performing emerging market in 2014, delivering over 29 percent. It was followed by the Philippines in second place and Indonesia in third.
2015-03-03 00:00:00 Dan Fuss - The New Factor in the Bond Markets by Robert Huebscher (Article)
Dan Fuss' career in the bond market has spanned over 50 years. During that time, Fuss has spoken regularly at CFA luncheons. Last week in Boston, he began by warning that what he had to say would be markedly different from any of his previous talks.
2015-02-27 00:00:00 Could Apple Buy a Third of the World’s Gold? by Frank Holmes of U.S. Global Investors
So what’s Apple’s next trick? How about moving the world’s gold market?
2015-02-27 00:00:00 China’s New Generation of Entrepreneurs II by Beini Zhou of Matthews Asia
China has long been perceived to be a breeding ground for business copycats, and has struggled with rampant intellectual piracy. Many businesses there have indeed been founded based on business models that originated in the U.S. or Europe. But what’s been overlooked in recent years is China’s rising “innovation machine.” More favorable government policies toward R&D have helped. This month, Asia Insight takes a look at developments in China’s grassroots-level entrepreneurship.
2015-02-27 00:00:00 Rhyming…but not Repeating. by Liz Ann Sonders, Brad Sorensen & Jeffrey Kleintop of Charles Schwab
Stocks have recovered their January losses and have continued to move higher. While economic growth remains solid and we remain secular bulls, investors should be prepared for increased volatility and the potential for a near-term correction. Also, European stocks may be due for at least a pause and we suggest looking to add exposure to emerging market positions if needed. Staying well diversified and keeping an eye on rebalancing is the recommended strategy.
2015-02-26 00:00:00 Family-Owned Businesses: One More Reason Not to Neglect Emerging Markets by David Ruff of Forward Investing
At the end of a year in which the U.S. handily led the world’s equity markets, many dividend investors find it hard to rouse any interest in emerging markets at all. “Why even bother?” seems to be the prevailing sentiment.
2015-02-26 00:00:00 Investing in Volatility: Is Asian Volatility Poised to Rise? by David Jubb of Invesco Blog
Volatility is cheap these days. That may sound strange at first. But, the Invesco Multi Asset team views volatility as an investable asset type that can be included in our investment strategy. Why might this make sense? We believe volatility can provide additional diversification and return benefits when combined with our portfolio’s other asset exposures. For example, when volatility is low, markets may benefit. But when it rises, markets can come under pressure.
2015-02-25 00:00:00 China Levels the Global Playing Field by Hayden Briscoe of AllianceBernstein
It’s a powerful vision for the world’s future. The US and China: two growth powerhouses; two major currencies.
2015-02-24 00:00:00 Debt Be Not Proud by John Mauldin of Mauldin Economics
Some things never change. Here is Eugen von Böhm-Bawerk, one of the founding intellectuals of the Austrian school of economics, writing in January 1914, lambasting politicians for their complicity in the corruption of monetary policy.
2015-02-21 00:00:00 International Equity Commentary: January 2015 by Team of Thomas White International
International equity prices were mostly unchanged during January as gains in both developed and emerging Asian markets were offset by weakness in Canada and select markets in Europe. Investors turned more cautious after the International Monetary Fund and the World Bank lowered their global growth forecasts for the current year, contrary to expectations.
2015-02-21 00:00:00 Global Economic Overview: January 2015 by Team of Thomas White International
Concerns about the sharp fall in capital investments and earnings growth in select sectors resulting from lower oil prices continue to cloud the global economic outlook. While the decline in fuel prices is revitalizing consumer spending across all the major countries, the energy and mining sectors have already started curtailing their capital outlays.
2015-02-20 00:00:00 Developed Asia Pacific: Economy Trends Update January 2015 by Team of Thomas White International
Japan, the biggest of the developed economies in the region, stands to benefit from cheaper oil as it should boost domestic demand and help some of the country’s key industries reduce costs. Still, the bigger advantage for the country seems to be the re-election of Prime Minister Abe, which has ensured continuity of the fiscal and monetary policies pursued by the government for the last two years.
2015-02-17 00:00:00 Search for Strength: EM Downturn Puts Focus on Fundamentals by Sponsored Content by Invesco (Article)
- Corporate earnings deterioration and a decline in return on capital have held back emerging market performance.
- Reversing weak performance depends on a return to stronger corporate earnings.
- Downside risks could lead to disappointing earnings growth, but positive fundamentals are unfolding.
2015-02-17 00:00:00 The Question that Quadrupled Response Rates by Dan Richards (Article)
Last week, my article described how an advisor uses case studies on tax saving strategies to get in front of prospects. Today, I will discuss the tactic that quadrupled participation in a Red Cross blood drive, and how this technique could increase your success when talking to existing and prospective clients.
2015-02-13 00:00:00 Global Airline Stocks Soaring, and Not Just Because of Low Oil Prices by Frank Holmes of U.S. Global Investors
The airline industry is notoriously competitive. There’s even an old joke: If you want to make a million dollars in the airline business, you need to start with two million.
2015-02-13 00:00:00 One Cheer for India: Hip, Hip but no Hooray? by Sudarshan Murthy of Matthews Asia
There has been a sense of optimism lately over India’s place in the world, and its markets demonstrated some enthusiasm over the seemingly good chemistry between U.S. President Barack Obama and Prime Minister Narendra Modi. But should investors beware of chasing price momentum?
2015-02-11 00:00:00 Positive Economic Surprises in Europe, Negative in the U.S. by Team of GaveKal Capital
The Citi Economic Surprise index is a quick way to get a high-level look at the condition of economic data around the world. Calculated as a diffusion index, values generally range between 100 and -100 for the overall index, which is currently right in the middle of that range.
2015-02-11 00:00:00 China Just Crossed a Landmark Threshold by Frank Holmes of U.S. Global Investors
Back in July 2013, the think tank Heritage Foundation predicted that China’s outbound investment “could very well exceed $80 billion [by the end of the year] and is on course to breach $100 billion by about 2016.”
2015-02-07 00:00:00 The Power of Lower Oil Prices by Byron Wien of Blackstone
The Ten Surprises of 2015 have two prevailing themes. The more dominant is that the decline in the price of oil is generally a positive for the world. It puts money in the pockets of consumers everywhere and it is likely to force Iran and Russia to be more conciliatory in geopolitical negotiations because both countries are suffering not only from the drop in the oil price, but also from the sanctions imposed on them. The second theme is that in spite of notable economic problems in Europe, China and Japan, the United States equity market will have another good year.
2015-02-06 00:00:00 Key Questions for China Investors in 2015 by Andy Rothman of Matthews Asia
China raises many questions for investors. Last year, for example, GDP growth slowed to 7.4% from 7.7%, but China still accounted for almost one-third of global growth. Is this a healthy economy or an impending disaster? In the first of a three-part Sinology series, Andy Rothman, Matthews Asia Investment Strategist, addresses some key investor concerns.
2015-02-06 00:00:00 China’s Millennials: Have Money, Will Travel by Sammy Suzuki of AllianceBernstein
China’s millennials are better educated and more affluent than their elders. They also have a serious case of travel fever. Their favored destinations, and shopping habits abroad, could have far-reaching implications for a wide range of global companies.
2015-02-03 00:00:00 Facing Reality by Questioning Some Common Beliefs by Ron Surz (Article)
I've decided to do something different in this quarterly commentary. I begin as usual with a review of first quarter market performance. Then I turn my attention to some commonly held beliefs that I regard as mistaken, as shown in the figure below.
2015-02-03 00:00:00 A Greek Morality Tale by Joseph E. Stiglitz of Project Syndicate
When the euro crisis began a half-decade ago, Keynesian economists predicted that the austerity imposed on Greece and the other crisis countries would fail. Now that it has, what is needed is not structural reform in Greece so much as a fundamental reform of the eurozone's design and policy frameworks.
2015-02-03 00:00:00 Deflation: Consternation Not Elation by Matt Lloyd of Advisors Asset Management
Deflation has been around ever since there was an excess supply of something or when demand had plummeted. The term “deflation” has now become mainstream in the general public’s lexicon, though the understanding of the declining economic growth that corresponds with it is often disregarded until it wreaks havoc on the consumer’s paycheck. When we see deflation permeating global economics, market movements and NFL games, the general public will become acutely aware of the other major impact from deflation, the increasing symbiotic nature of all the global economies.
2015-02-02 00:00:00 Portfolio Strategies 2015: Investing in an Age of Divergence by John Mauldin of Mauldin Economics
Everyone is worried about being blindsided by a significant downdraft in the markets when maybe we should be thinking about making sure we don’t miss a bull market somewhere. These and several dozen other topics were on the table when the Mauldin Economics writing team gathered here in Dallas for 3½ days of intensive talk, interviews, and planning. Today we’ll go over a few of the highlights of this last week, and I’ll share a few reasons to be optimistic about 2015.
2015-01-30 00:00:00 Is Dividend Investing Passe? by Yu Zhang of Matthews Asia
Dividends can be used as a lens through which we attempt to identify high-quality, financially healthy companies with prudent capital allocation policies.
2015-01-30 00:00:00 Reforms in Asia Bring Big Potential for Small Companies by Team of Franklin Templeton Investments
At Templeton Emerging Markets Group, we believe Asia’s combination of rapid economic growth, generally strong national finances and economic fundamentals has created an attractive landscape for equity investors. Seismic changes have been taking place in Asia’s political arena over the past couple of years, including major elections, leadership transitions and even a military coup. These political shifts have economic reform implications as well.
2015-01-29 00:00:00 Municipal Market Update: What's Ahead in 2015 by Joseph Deane, Julie Callahan, Sean McCarthy of PIMCO
Municipal bonds ended 2014 as one of the best-performing asset classes - buoyed by investors’ search for yield in a low interest-rate environment. For 2015, we are positioned cautiously for greater volatility in the fixed income markets. We currently prefer revenue-backed bonds over most general obligation (GO) debt, as these sectors typically benefit from dedicated revenue streams and do not have the pension challenges that many state and local governments face.
2015-01-28 00:00:00 European Central Bank Embraces QE, For Better Or Worse by Gary Halbert of Halbert Wealth Management
Last Thursday, European Central Bank (ECB) President Mario Draghi announced the much-anticipated launch of a sovereign bond buying program at the rate of ?60 billion ($70 billion) per month known as ?quantitative easing.? The amount of the monthly purchases was slightly higher than had been expected.
2015-01-26 00:00:00 How Global Interest Rates Deceive Markets by John Mauldin of Mauldin Economics
When it comes to interpreting what current interest rates are telling us about the markets in various countries, I have to say that I do not think they mean what the market seems to think they mean. In fact, buried in that list of bond yields is ?false information? ? information so distorted and yet so readily misunderstood that it leads to wrong conclusions and decisions ? and to bad investments.
2015-01-25 00:00:00 Is Your China Glass Half Empty or Half Full? by Andy Rothman of Matthews Asia
It's been well-noted that China's 2014 GDP growth was the slowest in 24 years. But following 7.7% growth for the prior two years, 7.4% doesn't feel like a huge slump. And because the base was so much bigger, the incremental increase in the size of China's economy last year was 100% bigger than the increase at a much faster growth rate a decade ago. What are other important perspectives on China these days? Andy Rothman, Matthews Asia Investment Strategist, explores in this issue of Sinology.
2015-01-25 00:00:00 Connecting to China?s New Equity Plays by Stuart Rae and John Lin of AllianceBernstein
Despite a slow start following its launch in November, the Shanghai-Hong Kong Stock Connect share trading scheme has significantly increased foreign access to China equities and created new investment opportunities. Two subsectors are particularly noteworthy for global investors.
2015-01-23 00:00:00 U.S. Lodging: The Recovery Checks In for an Extended Stay by Ray Huang, Amit Arora of PIMCO
Relatively high occupancy levels should drive room rate growth in the hotel sector over the next several years, despite some supply entering the market. We see opportunities in certain segments, such as premium hotels and C-corporations, due to high barriers to entry and pricing power.
2015-01-21 00:00:00 What We Are Hearing From Asia-Pacific Investors: Five Themes for 2015 by Eric Mogelof of PIMCO
Amid lower forward-looking returns, investors are focusing on multi-asset solutions, enhanced beta, income and alternatives in Asia-Pacific. PIMCO is prepared to address these themes, drawing upon our time-tested investment process that combines high-level macroeconomic views with thorough on-the-ground research.
2015-01-21 00:00:00 European Head Fake? by Burt White of LPL Financial
The much anticipated European Central Bank (ECB) policy meeting this week may include a quantitative easing (QE) program announcement. Although we would view a potentially bold QE program from the ECB as an incremental positive, the ongoing growth and deflation challenges in Europe leave us still with a strong preference for the U.S.
2015-01-21 00:00:00 Tocqueville Gold Strategy Investor Letter: Year End 2014 by John Hathaway of Tocqueville Asset Management
John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), looks back at the performance of gold over 2014, noting that: "in dollar terms gold declined 1.7 percent, but?it posted solid gains against all other currencies," and that "the dollar?s strength relative to other currencies has camouflaged the strength of gold."
2015-01-20 00:00:00 A Year-End Letter to Clients: How the World's Wealthiest Families Invest by Dan Richards (Article)
Here are the components of the year-end letter for 2014: An overview of 2014 performance; Some context on market valuations and how wealthy families are investing today; and brief thoughts for the period ahead.
2015-01-20 00:00:00 Navigating the Oil Slick by Team of Calamos Investments
GDP growth for 2015 is likely to be 2.0%-2.5% globally and 2.5%-3.0% in the U.S. Oil prices may fall further but are likely to stabilize over the next several months. The ECB is likely to ramp up QE in the first quarter. These next months are likely to be volatile, but equities have more room to run. Low corporate borrowing costs and high dividend yields should encourage continued M&A and buyback activity, providing support to equity valuations. With the U.S. in the middle innings of the recovery, the case for secular and cyclical growth companies remains strong.
2015-01-18 00:00:00 QE and the ECB: "Authorize" is a Slippery Word by John Hussman of Hussman Funds
The ECB will authorize a large QE program this week, but my impression is that the details will leave the ECB itself responsible for executing only a fraction of the announced program, with the remaining majority of the program (perhaps 60-75%) being nothing more than the option for each national central bank to purchase its own country?s government bonds, at its own discretion, and its own risk. Moreover, that option is likely to be limited to something on the order of 25% of the outstanding government debt of each respective country.
2015-01-17 00:00:00 Palladium Was the Winner in 2014 by Frank Holmes of U.S. Global Investors
Palladium, 2014?s top commodity, performed relatively according to script. For the year it was up 11.35 percent, compared to its 10-year annualized returns of 14 percent. Much like nickel, palladium was spurred by extenuating circumstances. Between January and June, a labor strike in South Africa, the world?s second-largest producer of the metal following Russia, halted production, which depleted reserves and sent palladium to a three-year high of $850 an ounce.
2015-01-17 00:00:00 Occupy Wall Street in Qing Dynasty, China by Gerald Hwang of Matthews Asia
What if a banker's family could be taken as slaves to repay losses arising from the banker's malfeasance? This may seem extreme now but it was part of a system that existed 200 years ago in a China's desolate Shanxi region near Mongolia. This week, Gerald Hwang, CFA, writes about this surprising birthplace for a banking system that served elite citizens and the treasury of the Qing dynasty.
2015-01-16 00:00:00 The Swiss National Bank?s Unpleasant Experience of Sleeping Next to an Elephant by Sachin Gupta, Thomas Kressin of PIMCO
On 15 January 2015, the Governing Board of the Swiss National Bank (SNB) unexpectedly exited its minimum exchange rate regime, which it had adopted back in September 2011 when it was fighting sharp appreciation of the Swiss franc in the midst of the eurozone sovereign debt crisis.
2015-01-13 00:00:00 Market Outlook 2015: Double Digit Gain...Thank You, May I Have Another? by K. Sean Clark of Clark Capital Management Group
The U.S. stock market finds itself in rare territory as we enter 2015. For only the sixth time in the past 150 years, the U.S. stock market has registered a double-digit gain for three consecutive calendar years from 2012 to 2014. We will try to answer the question: ?Can the U.S. stock market post a fourth year of double-digit gains??
2015-01-10 00:00:00 Bad News Is Good News: A Contrarian View of China Investing by Frank Holmes of U.S. Global Investors
I asked Xian Liang, portfolio manager of our China Region Fund (USCOX), to outline a few of the most compelling cases to remain bullish on the Asian giant.
2015-01-09 00:00:00 Shades of APEC Blue by Raymond Deng of Matthews Asia
During last year's Asia-Pacific Economic Cooperation summit, Beijing revealed stunning blue skies to replace its normally smog-choked atmosphere?a result of intentional government closings of factories and roads. Producing "APEC blue" as it came to be called was a complicated and expensive task. Asia Weekly explores such initiatives in China.
2015-01-08 00:00:00 Global Economic Outlook by Team of Northern Trust
Re-entry to the workplace after the holiday season isn't exactly like a satellite descending from earth's orbit.
2015-01-07 00:00:00 2015 Investment Outlook: Emerging Markets Still Global Growth Drivers by Mark Mobius of Franklin Templeton Investments
We at Templeton Emerging Markets Group believe high economic growth rates will remain a key attraction of many emerging markets in 2015. Even with major economies like Brazil and Russia slowing down, overall economic growth in emerging markets during 2015 is expected to be comfortably in excess of developed markets, with China and India likely to drive the Asian region to particularly strong growth.
2015-01-07 00:00:00 A Quick Look at the World Economy by Russ Koesterich of BlackRock
An assessment of where the different world economies stand, including a look at the United States, Europe and Asia.
2015-01-07 00:00:00 Health Care Stocks Pick Up in 2015 Where They Left Off in 2014 by Team of GaveKal Capital
Across two of the three regions in the MSCI World Index, the health care sector has been the best performer over the last year. In North America, measured in USD, health care stocks are up 29.13% over the last year, while they were up 5.96% in Europe and 2.53% in Asia/Pacific.
2015-01-06 00:00:00 Evaluating the Arguments for the Dollar's Demise by Seaborn Hall (Article)
From the great financial crisis and the massive escalation of sovereign debt and QE to the threat of currency wars to cries from pundits to exit the dollar and buy gold, it requires a discerning advisor to sift through the din and decide whether the dollar's reserve status is slipping. Could the dollar look strong and still be in danger? Several recent books, and papers from the BIS, IMF and Fed delineate the noise from the reality.
2015-01-06 00:00:00 Ides by William Gross of Janus Capital Group
Beware the Ides of March, or the Ides of any month in 2015 for that matter. When the year is done, there will be minus signs in front of returns for many asset classes. The good times are over.
2015-01-05 00:00:00 Tips for Navigating The Market in 2015 by Russ Koesterich of BlackRock
As the calendar turns to 2015, its time to assess the investing landscape and your investment portfolio to ensure youre well positioned for the New Year. The BlackRock List can help.
2015-01-04 00:00:00 Why the World Needs the US Economy to Struggle by John Mauldin of Mauldin Economics
In this weeks letter, my associate Worth Wray explores what a rising dollar means for emerging markets and what central banks are likely to do in response. Can they smooth the ride, or will it be the worlds scariest roller coaster? This letter will print long because of the number of fabulous charts Worth provides. I might make a brief comment or two at the end. Heres Worth.
2015-01-02 00:00:00 Where Will All the Workers Go? by Nouriel Roubini of Project Syndicate
In the years ahead, technological improvements in robotics and automation will boost productivity and efficiency, implying significant economic gains for companies. Yet, unless the proper policies to nurture job growth are put in place, it remains uncertain whether demand for labor will continue to grow as technology marches forward.
2014-12-31 00:00:00 Structural Reforms in Asia by Sharat Shroff of Matthews Asia
The global investment community continues to deliberate about the impact of quantitative easing stemming from Europe, and more recently from Japan, as a means to revive domestic demand. Meanwhile, several Asian economies are embarking on a different kind of stimulus, aimed at boosting long-term productivity and investment spending, through structural changes to the underlying economies.
2014-12-30 00:00:00 The 10 Most-Read Articles of 2014 by Various (Article)
As is our custom, we conclude the year by reflecting on the 10 most-read articles over the past 12 months.
2014-12-29 00:00:00 Unsettling Interplay of Leading Indicators by Alexander Giryavets of Dynamika Capital L.L.C.
We review in details where we stand in terms of the US and World leading indicators and point to some of the unsettling recent developments which should be watched carefully over the coming months.
2014-12-29 00:00:00 Adam Smith or Jerry Goodman by Jeffrey Saut of Raymond James
I met Jerry Goodman, whose nom de plume was Adam Smith, late in my career. He was working at my friend Craig Drills money management firm along with another icon in this business, from an era gone by, namely Al Wojnilower. I have had many conversations with all three of these Wall Street legends around the conference table at Drill Capital Management. Jerry wrote The Money Game (1968), Powers of Mind (1975), Paper Money (1981), and The Roaring 80s (1988), but unfortunately we lost his wisdom on January 3rd of this year .
2014-12-27 00:00:00 Epic Price Reversal for Commodities in 2014 by Frank Holmes of U.S. Global Investors
If you want to know what happened in 2014 with regard to gold and oil, it?s important to appreciate the inverse relationship between the U.S. dollar and commodities.
2014-12-24 00:00:00 Early Look: Who is the Author? by Keith McCullough of Hedgeye Risk Management
While I can try to explain why the SP500 can drop 103 points in a straight line (in 7 days), then ramp 106 points in 4 days, I dont think thats where I add value. There are legions of pundits on the #OldWall that use 1-factor moving averages than can help you with that.
2014-12-23 00:00:00 Growth Headwinds Continue to Blow Through Asia in 2015 by Adam Bowe, Tomoya Masanao, Robert Mead of PIMCO
This commentary discusses the conclusions from PIMCOs quarterly Cyclical Forum in December 2014 and how they influence our Asian outlook and investment strategy.
2014-12-21 00:00:00 The Second Wind of Abenomics? by Sachin Gupta, Tomoya Masanao of PIMCO
Mr. Abe now has up to four more years in power. While investors are likely to be patient in the near term, unless Abenomics gains a second wind the way a tired athlete finds the will to pick up the pace and finish strong there is a risk that this post-election market euphoria could be short-lived. The time for him to act is now.
2014-12-20 00:00:00 The $330 Billion Global Tax Break by Frank Holmes of U.S. Global Investors
According to an article by Jon Markman titled The Saudi Stimulus, the global economy is looking to save hundreds of billions of dollars on an annual basis: "According to EIA data, consumption of crude oil during the latest 12 months was 6.9 billion barrels. So the price drop from $107/barrel at the June 2014 high to $59 today represents a total presumptive savings of $332 billion per year." In a time when China, the European Union and other major markets are trying to jumpstart their economies, a $330 billion tax break can only come as good news. It should help in stimu
2014-12-19 00:00:00 Outlook for the Global Credit Markets in 2015 by Mark Kiesel of PIMCO
The combination of fundamentals, technicals, valuations and global central bank policies drives our overall constructive outlook for global credit in 2015. Economic growth dynamics, including an improving outlook in the U.S., along with likely changes in global central bank policies, continued energy price volatility and the potential for more shareholder-friendly actions by companies inform our credit views and strategies.
2014-12-18 00:00:00 A Tale of Two Markets by Scott Minerd of Guggenheim Partners
A solid run of domestic data has set the United States apart from a beleaguered world.
2014-12-17 00:00:00 Plunging Oil Prices Spark Fears of Global Recession by Gary Halbert of Halbert Wealth Management
Today, we touch on several bases. No doubt everyone reading this noticed that stocks tanked last week, and now seem to be moving in lockstep with oil prices. While consumers welcome cheaper gas and heating oil prices, there is a growing fear that the collapse in oil prices may be a harbinger of a global recession.
2014-12-13 00:00:00 China Wants to Conduct the World's High-Speed Rail Market by Frank Holmes of U.S. Global Investors
The Chinese want to return to the railroad business. This time, however, they strive to become the world?s leading go-to provider of high-speed rail and exporter of mass transit technology.
2014-12-13 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust
The Fed prepares to take a "considerable" step. We could be in for another round of emerging market volatility.
2014-12-12 00:00:00 Oil, Roil, and Turmoil by Scott Minerd of Guggenheim Partners
The free fall in oil prices is roiling markets. There are near-term benefits of lower energy prices, but darker clouds are gathering for the global economy.
2014-12-12 00:00:00 Asia, Looking to 2015 and Beyond by Robert Horrocks of Matthews Asia
Over the next decade, I expect Asias econo-mies to continue to raise living standards and to narrow the income gap between its own citizens and those in the U.S. or Europe.
2014-12-11 00:00:00 OPECs Thanksgiving by Jonathan Waghorn of Guinness Atkinson Asset Management
The Organization of the Petroleum Exporting Countries (OPEC) meeting ended on 11/27/14, Thanksgiving Day, with the decision to leave their production quota unchanged and no clarity on when a cut might be forthcoming. The lack of any quota cut, combined with little indication that OPEC were particularly focused in the short term on quota compliance, caught the market by surprise. Crude oil prices and energy equities fell sharply.
2014-12-10 00:00:00 Dealing with Divergence by Russ Koesterich of BlackRock
From the Age of Recovery to the Age of Divergence, we look forward to 2015 with an overview of the investment world and explore the different themes that will matter in the New Year.
2014-12-10 00:00:00 Whos Really in The Kingdoms Gun Sights? by Doug Holt of AdvisorShares
According to the EIA, U.S. crude oil imports averaged about 7.3 million barrels per day last week with Canadian barrels making up 3.2 million barrels of the total. U.S. commercial reserves increased by 1.9 million barrels week over week where total inventories fell 3.7 million barrels versus expectations of a build of 950,000.3 Are we at the beginnings of a rebalancing of the market? Possibly.
2014-12-09 00:00:00 Germany and France: Looking for Quality in the Eurozone by Jim Harvey, Dilip Badlani of The Royce Funds
While concerns over economic growth in Europe have been escalating, Royce International Micro-Cap Fund Portfolio Managers Jim Harvey and Dilip Badlani are finding small-cap opportunities with long-term benefits.
2014-12-09 00:00:00 Designing Balanced DC Menus: Considering Equity Investments by Stacy Schaus, Ying Gao of PIMCO
Defined contribution investment lineups typically provide numerous equity choices but still may lack adequate diversification and return potential. Participants may benefit by accessing high-growth markets such as emerging markets and tapping in to dividend-paying stocks. Retirement outcomes could improve further by including portfolios structured using fundamental measures rather than market capitalization.
2014-12-09 00:00:00 Hungary's PM: Madman or Geopolitical Genius? by Kaisa Stucke of Confluence Investment Management
Hungarys Prime Minister Viktor Orban is one of the first European leaders to turn friendly toward Russia, noting that geopolitics are changing and Eastern European countries should redefine their international policies according to these changes. This report explores the differences between the rules of the geopolitical game being played by Hungary, the West and Russia. We will describe the history of Hungarys balancing act between the powers of the East and West and how this history affects its current politics. We will discuss the most likely outcomes and their international si
2014-12-08 00:00:00 A Long-Term View for China by Nick Niziolek of Calamos Investments
When I meet with clients, one of the most frequent questions Im asked is, What do you think about China? With Chinas rate cut this past Friday helping to fuel a global equity rally, we were reminded of how relevant the China question is to the overall health of the global markets and economy. In this post, Ill discuss the lens through which we view China and how we interpret the daily flood of policy-related headlines coming out of the country to determine what is noise and what is actionable.
2014-12-07 00:00:00 Macroeconomics Finally Gets Interesting by John Mauldin of Mauldin Economics
2015 may be the year that macroeconomics really becomes interesting again, if it hasnt already. After a long period of relatively coordinated central bank policies and remarkably low volatility, the macro scene is becoming more dynamic. Thats great for those who live and die by dramatic long-term shifts in global markets, but it should be terrifying for emerging-market policymakers, currency carry traders, Texas oil men, and, frankly, the average investor. King Volatility is back on his throne.
2014-12-06 00:00:00 Dont Let Market Motion Sickness Keep You From Missing the Boat by Frank Holmes of U.S. Global Investors
Despite all of the good news, the recent threat of market volatility, which weve seen plenty of in commodities and emerging markets, seems to have pushed close-to-retirement folks away from equity securities. The August and October downturns, not to mention the decline in gold and oil prices, have understandably heightened consumer fears.
2014-12-06 00:00:00 Will Two Key Sectors Survive Chinas Long Landing? by Hayden Briscoe of AllianceBernstein
Based on insights from our teams recent trip to China, we noted that the country is likely headed for a long economic landing. What does that mean for its infrastructure and commodity sectors?
2014-12-06 00:00:00 Chinas Economy Gliding into Long Landing by Hayden Briscoe of AllianceBernstein
Chinas economy isnt headed for a hard or soft landinginstead, its more likely to be a long landing. Thats our perspective, based on our teams recent visit to China to get an up-close look at the economic landscape.
2014-12-06 00:00:00 China's One-Child Policy by Andy Rothman of Matthews Asia
Last November, Chinas Communist Party announced that it would relax its famed one-child policyone of the most draconian examples of government social engineering ever seen. This is a significant political move, as it represents the Partys decision to withdraw from its citizens bedrooms, restoring a key element of personal freedom that should help rebuild peoples trust in the Party. But what some observers may not realize is that the steepest fall in Chinas total fertility rate (the average number of live births per woman) actually came be
2014-12-05 00:00:00 Outlook 2015: Multi-Manager by Marcus Brookes, Robin McDonald of Schroders Investment Management
Investors need to prepare for lower returns in the next few years, with a focus on capital preservation appearing prudent in the current environment.
2014-12-05 00:00:00 A Mix of Central Bank Action and Oil by Russ Koesterich of BlackRock
Central bank action and plunging oil prices have been wielding big influence over market movements in recent months. Russ K explains why the impact is likely to continue.
2014-12-05 00:00:00 Is the Oil Price Slump an Early Holiday Gift for Some Consumers? by Virginie Maisonneuve, Ji Young Park, Mark Richards of PIMCO
With 60% of global GDP driven by consumers, the impact that sustained lower oil prices will have on the global economy is an important factor for investors to take into account. The benefits of lower oil prices will not be evenly distributed and it is important to think about countries that stand to benefit more because of higher consumption and/or less economic dependence on oil exports.
2014-12-03 00:00:00 On The Economy, Oil Prices & Obama's Temper Tantrum by Gary Halbert of Halbert Wealth Management
Last Tuesday the Commerce Department raised its estimate of 3Q Gross Domestic Product to a 3.9% annual pace from the 3.5% rate reported last month, reflecting upward revisions to business investment and consumer spending and a smaller than previously reported decline in inventories. The pre-report consensus was for a slight cut to 3.3%, so the latest report was much better than expected.
2014-12-03 00:00:00 Outlook 2015: Convertible Bonds by Martin Kuehle of Schroders Investment Management
The equity market is likely to be the main driver of convertibles in 2015, when diligent research will once again be crucial.
2014-12-02 00:00:00 The Tooth-Fairy Economics of Jeff Madrick by Laurence B. Siegel (Article)
Incentives don't matter, tradeoffs don't exist and there are no limits to what the government can give you. Those who believe this dogma are likely to still have faith in the tooth fairy. In Seven Bad Ideas, a critique of the neoclassical revival in economics that surrounded Milton Friedman and that affected policy and politics worldwide for more than a generation, Jeff Madrick emerges as tooth-fairy economics' chief exponent.
2014-12-01 00:00:00 The Return of Currency Wars by Nouriel Roubini of Project Syndicate
The recent decision by the Bank of Japan to increase the scope of its quantitative easing is a signal that another round of currency wars may be under way. The cause of the latest currency turmoil is clear: In an environment of public and private deleveraging, monetary policy has become the only available tool to boost demand.
2014-12-01 00:00:00 Monetary Tectonics by John Hathaway of Tocqueville Asset Management
John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), examines in his latest piece "the very meaningful difference between the dollars relative and absolute strength, and look(s) at the widening fissures beneath the faade of strength fissures that, as yet, appear to have had little impact upon the investment consensus."
2014-11-25 00:00:00 Active Investing: Opportunity in Gold by Tim Gramatovich of AdvisorShares
As active managers, we embrace both a top down and bottom up investment philosophy as we look for opportunities for investment. One such potential opportunity we are seeing from more of a top down, thematic approach is in gold.
2014-11-24 00:00:00 On the Verge of Chaos by John Mauldin of Mauldin Economics
In this weeks letter were going to explore some of the ramifications of the currency war that Japan is precipitating. It is more than just Germany, Korea, and China having issues and needing to contemplate their own competitive devaluations. If the yen goes too far too fast, there will be geopolitical repercussions far beyond the obvious first-order connections.
2014-11-24 00:00:00 Global Economic Overview: October 2014 by Team of Thomas White International
Regional growth trends diverged further during the month of October as data from the U.S. and China were positive, while activity in the Euro-zone remained subdued. The U.S. economy expanded faster than expected during the third quarter, helped by higher government spending.
2014-11-24 00:00:00 Emerging Markets Equity Commentary: October 2014 by Team of Thomas White International
Emerging market equity prices turned volatile during October as concerns about weak global growth and the impending close of bond purchases by the U.S. Federal Reserve unnerved investors. Still, some of the large emerging markets in Asia rebounded strongly during the second half of the month.
2014-11-22 00:00:00 Solar Energy Powers Record Silver Demand by Frank Holmes of U.S. Global Investors
Silver demand in the fabrication of solar panels is set to outpace photography, if it hasn?t already done so.
2014-11-21 00:00:00 Emerging Markets Opportunity Still Emerging by Burt White of LPL Financial
We believe emerging markets (EM) fundamental conditions are set for improvement in 2015, based on our outlooks for economic growth, earnings, and policy. Valuations are compelling and EM may be situated to recapture some of their relative losses from a technical perspective, particularly in Asian markets. However, somewhat mixed fundamental and technical pictures suggest a better opportunity may be forthcoming
2014-11-21 00:00:00 Asia's Deepening Capital Markets by Robert Horrocks of Matthews Asia
The drivers of economic growth, the region's small- and medium-sized enterprises, are finally gaining access to capital through alternative funding sources outside of just banks. Retail investors are accessing increasingly diverse products in which to store their savings and build wealth. Institutions are demanding long-dated assets to match their liabilities? Are we finally seeing more stable local demand in Asia's local capital markets?
2014-11-21 00:00:00 Still A Winning Hand by Scott Mather, Mark Kiesel, Mihir Worah of PIMCO
The U.S. is finally enjoying a self-sustaining economic recovery, but slow global growth remains a concern and financial markets are bouncing up and down by the day. So what exactly does this U.S. recovery mean for investors?
2014-11-21 00:00:00 Falling Gas Prices Fuel Holiday Cheer by Scott Minerd of Guggenheim Partners
Rising equities and falling prices at the pump will bring holiday cheer, but be aware of potential headwinds as we head into 2015.
2014-11-19 00:00:00 Indonesian Optimism by Tek Khoan Ong of Franklin Templeton Investments
Southeast Asia represents one of the fastest-growing regions in the world today, and is one that we are excited about as investors. The Templeton Emerging Markets Group held our semiannual analyst conference in Jakarta in September, and one of the key reasons for choosing that location was to observe and discuss the changes and challenges on the ground with the new regime of President Joko Widodo. Ive invited my colleague Tek Khoan Ong to pen some thoughts on the outlook and investment opportunities in Indonesia today.
2014-11-18 00:00:00 Has Europes Recovery Story Turned Back a Page? by Heather Arnold of Franklin Templeton Investments
The European economy at large had been moving forward in the wake of the 20072009 global financial crisis and subsequent sovereign debt crisis, spurred by European Central Bank (ECB) President Mario Draghis pledge to do whatever it takes to save the euro in 2012 and the implementation of austerity measures in the eurozone periphery. In recent months, the recovery seemed to have stalled, with some countries, including the eurozones engine of growth- Germany - flirting with recession.
2014-11-15 00:00:00 Explore and Discover the Winners When Gas Prices Fall by Frank Holmes of U.S. Global Investors
West Texas Intermediate (WTI) oil for December delivery is currently priced at $75 per barrel, Brent for January delivery at $78 per barrel. Many investors, publications and news sources focus only on the drawbacks to falling oil and gas prices-don't get me wrong, there are many-but today we're going to give the spotlight to the biggest winners and beneficiaries.
2014-11-13 00:00:00 The ETF Trader Interview Series: Ken Dolan, Jefferies & Company by David Abner of WisdomTree
In this edition, Dave Abner, Head of Capital Markets at WisdomTree, speaks with Ken Dolan, Senior Vice President on the ETF trading desk at Jefferies & Company, Inc. Ken joined the desk in 2011 after spending nine years at LaBranche & Co. as a Managing Director and Head of ETF Trading. In addition to his ETF trading experience, Ken has nine years of trading experience across equities, fixed income and emerging markets at Deutsche Bank, Credit Suisse and Lehman Brothers. He received a BS from Providence College and is a Chartered Financial Analyst.
2014-11-12 00:00:00 When Oil Prices Dip, Unexpected Winners Emerge by Russ Koesterich of BlackRock
A stronger dollar is one of the reasons that oil prices are low, which serves many energy-importing economies in Asia while weighing on large oil-producing nations.
2014-11-07 00:00:00 Reconsidering Asia's Currencies by Gerald Hwang of Matthews Asia
The Asian Financial Crisis of 1997-1998 looms like a ghost over any attention to Asian currency risk. But what new considerations are needed now? Given the robust performance of the regions currencies since 1999, Portfolio Manager Gerald Hwang, CFA, explores this topic in a modern context that takes into account the diverse monetary systems, business cycles and development stages of Asias economies.
2014-11-06 00:00:00 Global Economic Overview: September 2014 by Team of Thomas White International
Global economic growth concerns resurfaced during the month of September, as data from the Euro-zone suggested that select large counties yet again face recession. Even Germany, the bulwark that shielded the common currency area during the fiscal crisis, has slowed down as subdued external demand has taken a toll on exports.
2014-11-04 00:00:00 Black Dog: Are Plunging Oil Prices a Positive or a Negative? by Liz Ann Sonders of Charles Schwab
The bear market in oil prices is largely a positive for the consumption-oriented US economy, but there are caveats. Oil's plunge is more a function of increased supply and the stronger US dollar than it is of weaker global demand. Oddly, many investors are worried about the stock market because of oil's plunge; but history suggests otherwise.
2014-11-04 00:00:00 The Race by Brian Andrew of Cleary Gull
While some may wish for a Democratically controlled Congress because we have a Democrat in the White House, the reality is that some dysfunction between Congress and the Administration is welcome by markets. Near-term, many believe that the regulatory environment created by a Democratic Senate and Administration creates uncertainty and restricts corporate growth. While that may be true, it is hard to argue with the stock market returns over the last several years. The reality is that markets appreciate some dysfunction in Washington.
2014-11-04 00:00:00 So What Happened Last Month? by Team of GaveKal Capital
October was certainly a rollercoaster ride in the equity markets but it was a ride that ended right where it started. The average stock in the MSCI World Index was up 13 basis points over the past month.
2014-11-04 00:00:00 Emerging Markets Equity Commentary: September 2014 by Team of Thomas White International
Emerging market equity prices corrected in September on concerns about weaker global growth even as the U.S. Federal Reserve is set to wind down its bond purchases. Signs of yet another downturn in the Euro-zone economy are likely to hurt the export outlook for the major emerging countries that had seen a modest improvement in exports in recent months.
2014-11-01 00:00:00 Dont Be Spooked by Market VolatilityOpportunity Is Still Knocking! by Frank Holmes of U.S. Global Investors
One of the greatest fears this Octoberpossibly the most volatile month of the yearhas been the correlation between the S&P 500 Indexs ascent in the first three quarters of the year and the possible ramifications of the end of quantitative easing (QE).
2014-10-31 00:00:00 Trick or Treat? Slow Global Growth Hits Cyclical Sectors Hardest by Francis Gannon of The Royce Funds
As of October 13, the small-cap Russell 2000 Index was down 12.9% from its 2014 high on July 3a double-digit correction not seen in more than three years. With the U.S. economy slowly improving and Fed tapering winding down as scheduled, what is driving this pullback? Co-Chief Investment Officer Francis Gannon talks about economic growth beyond our borders and how it has been playing a role in shifting investor sentiment.
2014-10-31 00:00:00 A New Breed of Robotics by Kenichi Amaki of Matthews Asia
Are collaborative robotsindustrial robots made to better work alongside humanslikely to be well-received in the market? How feasible is a car made from a 3D printer? This week Portfolio Manager Kenichi Amaki discusses his findings from the International Manufacturing Technology Show in Chicago.
2014-10-30 00:00:00 Europe Must Act Now by Scott Minerd of Guggenheim Partners
Things in Europe are bad and policymakers appear already to have fallen behind the curve. The reality is the ECB will need to purchase at least another 1.5 trillion in assets, and even that may not be enough to avert a severe slowdown.
2014-10-26 00:00:00 A Scary Story for Emerging Markets by John Mauldin of Mauldin Economics
The all-too-predictable effects of a rising dollar on emerging markets that have been propped up by hot inflows and the dollar carry trade will spread far beyond the emerging markets themselves. This is another key aspect of the not-so-coincidental consequences that we will be exploring in our series on what I feel is a sea change in the global economic environment.
2014-10-25 00:00:00 As the Eurozone Stalls, China Cuts the Red Tape by Frank Holmes of U.S. Global Investors
France and Germanys industrial production has turned down recently. Their purchasing managers index (PMI) numbers are below the 50-mark line, indicating contraction. This trend is especially worrisome because Europe is a bigger trading partner with China than the U.S. is. So whats the solution? The EU would do well to look east, specifically to China.
2014-10-23 00:00:00 China: Decelerating but Still Healthy by Andy Rothman of Matthews Asia
GDP growth will be just above 7% this year, and slightly slower next year. Despite the negative media headlines, there are no signs of impending doom and Andy Rothman, Matthews Asia Investment Strategist, expects the property market to stabilize in the coming quarters. Strong growth in income and retail sales means China remains the worlds best consumption story.
2014-10-22 00:00:00 Despite Volatility, This Bull Is Likely to Charge Higher by John Calamos, Gary Black of Calamos Investments
As the fourth quarter begins, the market has found itself engulfed in anxiety. Volatility has surged in the equity markets while the 10-year Treasury yield has dropped to 2%-leading some to question whether this bull market is breathing its last breath. We believe: * Global GDP growth will likely be in the 2.0%-3.0% range. * The U.S. is in the 5th or 6th inning of recovery, with slow but improving growth. * Despite the surge in volatility, this bull market has more room to run. * A balance of secular and cyclical growth companies presents the most attractive portfolio for this mid-cycle phase.
2014-10-21 00:00:00 Loomis Sayles Core Plus Bond Fund: Navigating Dynamic Markets with Tactical Flexibility by Sponsored Content from Loomis Sayles (Article)
The global economic cycle is a perpetual force influencing interest rates, credit availability and capital markets. For core plus managers who seek to generate total return by balancing liquidity and risk, these undulations pose a clear challenge.
2014-10-21 00:00:00 Turkey's Position on ISIL Misunderstood by John Browne of Euro Pacific Capital
As territory in the Middle East falls under control of the brutal fanatics of ISIL, many Americans may be wondering how this could happen in the backyard of major U.S. allies. In particular, frustration with Turkey's reluctance to move against ISIL, even as it massacres civilians and creates instability on the Turkish border, is growing rapidly. Turkey's political calculation with respect to the crisis reveals just how complex and intractable the crisis may become.
2014-10-21 00:00:00 Opportunities Amid Divergence by Michael Gomez of PIMCO
As in developed markets, the trends of increasing growth and policy dispersion will be borne out in emerging markets over the next 12 months. Brazil has some of the highest interest rates in the world, which presents an opportunity for investors, and we expect the next four years will be marked by a better mix of fiscal and monetary policy. Because our outlook for China has moderated somewhat, we are focusing attention on trade and financial linkages and how the ripple effects of a slower China might unfold.
2014-10-21 00:00:00 Blurring the Lines Between Emerging-, Frontier- and Developed-Market Stocks by Mark Mobius of Franklin Templeton Investments
There has been some convergence in terms of how one might classify emerging-, frontier- or developed-market companiesand how they might fit into investors portfolios. Recently, we have noted an increase in liquidity and transparency of many frontier-market stocks (the smaller and lesser-developed subset of emerging markets).
2014-10-20 00:00:00 Japan: Small Change Clouds Big Picture by Mark Jason of Invesco Blog
We continue to believe that achieving real economic growth in Japan requires changes that are hard to come by. On a recent trip to Japan, it became clear to me that this next stage of Abenomics shorthand for Prime Minister Shinzo Abes three-arrow economic revitalization program of monetary easing, targeted financial support and structural reforms calls for corporate governance reform to take the spotlight as a core part of the important third arrow, particularly as regulatory reforms have made slow progress thus far.
2014-10-11 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust
Hong Kong gets occupied; U.S. corporate taxes: Fact, fiction and framing; Has the U.S. Treasury blunted the Fed's QE program?
2014-10-11 00:00:00 Global Fears by Liz Ann Sonders, Brad Sorensen, Michelle Gibley & Jeffrey Kleintop of Charles Schwab
Volatility could continue but equity investors should keep the longer-term picture in mind, which we believe is positive. The U.S. economy is improving and monetary policy remains quite loose. The international picture is more concerning but diversification is important across asset classes. We currently favor emerging markets within a diversified international portfolio.
2014-10-11 00:00:00 Protecting Whom? by Tiffany Hsiao of Matthews Asia
China has long been accused of protectionist policies that restrict access to many markets.Recently, this has garnered more press attention. But has China really become more confrontational with U.S. business? In todays world, what exactly is protectionism, and who are these protections meant to benefit? This month Asia Insight explores.
2014-10-10 00:00:00 Japan: Changes in Sentiment and Tokyo's Property Market by Dilip Badlani of The Royce Funds
In his second trip to Japan this year, Portfolio Manager Dilip Badlani observed a change in sentiment, though his bullishness on Japanese micro-caps remains unshaken.
2014-10-09 00:00:00 Global asset allocation outlook by Global Asset Allocation Team of Columbia Management
Recent market performance, particularly in September, has been negative across a widespread array of asset classes as we have seen the U.S. dollar exchange rate rise with increasing intensity in recent months. The worst returns, not coincidentally, were delivered by the very assets that have shown historically high sensitivity to dollar strength. This disruption to currency stability in general, and the particular importance of a rise in exchange value for the worlds reserve currency, represents an important change in capital market conditions.
2014-10-09 00:00:00 Tocqueville Gold Strategy Investor Letter by John Hathaway of Tocqueville Asset Management
John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), states in his latest quarterly letter on gold that "On a near term basis, this looks and feels like a bottom to us. On a longer term view, we are more bullish than ever." He goes on to write that "Expanding earnings and valuations, the underpinnings of the four year bull market in financial assets, may be approaching an inflection point. A reversal of this cycle would in our opinion restore interest in gold."
2014-10-09 00:00:00 How Alibaba Could Capitalize on the EBay-PayPal Split by Frank Holmes of U.S. Global Investors
Ebay and Paypal Split - U.S. Global InvestorsInternet auctioneer and retailer eBay announced last week that it will be spinning off its online payment service PayPal into two listed companies. This decision, heralded by activist shareholder Carl Icahn, among other investors, will allegedly enable both companies to focus exclusively on what they do best.
2014-10-09 00:00:00 Putting the Pieces Together: An In Depth Chart Review of Global Financial Markets by Team of GaveKal Capital
One of our favorite grounding exercises is to peruse our chart library and review what has happened in the global financial markets so we can opine about what those prices and patterns are telling us about the world. We'll save the opining for another time, so we present the following charts with little commentary.
2014-10-08 00:00:00 A Japan Strategist Roundtable: What’s Next for Japan? by Jeremy Schwartz of WisdomTree
The start of 2014 was a challenging time for the Japanese equity markets. But recently things started to perk up. I recently spent time in Tokyo and want to share my observations from the trip.
2014-10-06 00:00:00 Emerging from the Global Competitiveness Ranks by Mark Mobius of Franklin Templeton Investments
The World Economic Forum (WEF) recently released its annual Global Competitiveness Report, which details the strengths and weakness of 144 countries in myriad factors including education, infrastructure, health and technology. There arent many huge surprises in the developed markets, as most countries overall rankings were fairly stable from the prior year. There were, however, a few interesting shifts in the ranks among emerging markets: some making leaps forward, and others, regressing.
2014-10-04 00:00:00 600 Million Reasons to Keep Your Eyes on India by Frank Holmes of U.S. Global Investors
In the wake of his rock star reception at Madison Square Garden on Sunday, Prime Minister Narendra Modi has emphatically announced to our nation's top corporate and political leaders that India is now open for business. Between September 26 and 30, he met with not only President Barack Obama and other high-profile politicians but also the CEOs of some of our nation's largest and most successful companies.
2014-10-03 00:00:00 Vision 1994 by Mark Headley of Matthews Asia
Twenty years ago, Paul Matthews decided to launch two Asia ex-Japan mutual funds in the U.S. and create what is today the Matthews Asia Funds. One was a core Asia ex-Japan growth fund with a mid-capitalization bias. The other fund was a unique portfolio with a focus on Asian convertible bonds. Thus began the journey of the Matthews Pacific Tiger and the Matthews Asian Growth and Income Funds.
2014-10-02 00:00:00 Voya Fixed Income Perspectives September 2014 by Christine Hurtsellers, Matt Toms of Voya Investment Management
Change is in the air, and its evident beyond the riot of color overwhelming our natural landscape. Market dynamics, too, are shifting, with the yield on the U.S. two-year Treasury inching higher and the U.S. dollar appreciating. Both not only suggest markets are pricing in a stronger U.S. economy, they are also potential harbingers that the end of zero interest rate policy is near.
2014-09-30 00:00:00 Asset Allocation in a Time of Complacency by Dimitri Balatsos of Tesseract Partners
Complacency is a dangerous mindset, especially for investors. Having been generously rewarded beyond their expectations, investors were coddled in the arms of complacency as 2013 drew to a close.
2014-09-29 00:00:00 Slower Growth in China and Japan Pressures the Region by Scott Mather, Tomoya Masanao, Adam Bowe of PIMCO
Our forecast for the global economy is below consensus mainly because of our views for regions outside of the U.S., including Asia, the emerging markets and Europe, although higher growth in the U.S. should offset some of the slowdown we see coming from China. Japan made a kick start under so-called Abenomics with massive monetary and fiscal reflation policies, but the recent data suggest to us that the effectiveness of those cyclical policies are already challenged by secular and structural headwinds.
2014-09-27 00:00:00 5 Reasons Why Short-Term Municipal Bonds Make Sense Now by Frank Holmes of U.S. Global Investors
Although short-term bonds might not be as sexy as common stocks in fashionable brands like Apple and Tesla, they play an important role in any serious investor's portfolio. Below are five reasons why investing in municipal bonds makes sense now more than ever.
2014-09-25 00:00:00 Awakening Japan Inc. by Yu Zhang of Matthews Asia
Japanese Prime Minister Shinzo Abe's first two "arrows" of his expansionary fiscal policies have done well to curb deflation. Now, investors are concerned about Japan's so called "third arrow"the country's growth strategy. Can credible structural reform be implemented to remove impediments to its growth?
2014-09-25 00:00:00 Three Reasons to Consider EM Asia by Russ Koesterich of BlackRock
Though EM stocks have been struggling of late, Russ still believes investors should have emerging market exposure, particularly in emerging Asia. He provides three reasons why.
2014-09-25 00:00:00 Global Equities Stay Thirsty for Liquidity by Rick Golod of Invesco Blog
Taking a step back from the usual economic and market insights, my September commentary is devoted to a topic that Ive been long overdue in addressing. Financial advisors have frequently asked about my approach to asset allocation, and Ive outlined my strategy for diversifying within the US equity space in my commentary, Harnessing the Markets Natural Rotation: An Asset Allocation Strategy. Here, Id like to provide a summary of my outlook, which remains unchanged from the previous month.
2014-09-24 00:00:00 Bull Market Mirage by Team of GaveKal Capital
On an equal weighted basis, the MSCI World index is up 2.58% YTD, is down 3.39% QTD and down 3.01% MTD. The equal weight index gives us a better idea of our chances of picking stocks that outperform.
2014-09-23 00:00:00 Back to Iraq by Bill O'Grady of Confluence Investment Management
President Obama has decided to build a coalition to dislodge the Islamic State (IS). The U.S. is leading the coalition, but American efforts will be limited to air power. In this report, we will offer a short synopsis of the war plan. This analysis will be followed by a broader discussion of U.S. Middle East strategy, including a history of American policy. We will move to discuss the most likely outcome from these efforts and conclude, as always, with market ramifications.
2014-09-23 00:00:00 Bullish on Japanese Small-Caps by Francis Gannon and David Nadel (Article)
While the macroeconomic picture in Japan is unsettling for many investors, we are finding what we think are inexpensive high-quality businesses across many industries. Royce International Smaller-Companies Fund Portfolio Manager and Director of International Research David Nadel talks about how he is positioning his portfolio and explains why he has confidence in FamilyMart, a Japanese convenience store chain.
2014-09-22 00:00:00 Two Themes Investors Should Focus on Now by Russ Koesterich of BlackRock
With countries growth, monetary policy and market performance increasingly diverging, Russ shares two themes investors should focus on as year-end approaches.
2014-09-22 00:00:00 Alternative Approaches for Managing Emerging Market Equity Portfolios by Roger Edgley, Laura Geritz, Andrey Kutuzov, and Ajay Krishnan of Wasatch Funds
The shortcomings of indexing are especially evident in frontier markets, where some very small markets have significant weights. This paper discusses three approaches for targeting inefficiencies in emerging markets. These approaches are designed to fit together and complement each other within an investment portfolio. Overlap is generally minimal, so investors may reasonably employ all three.
2014-09-18 00:00:00 “You’re Going to Need a Bigger Boat”: Alpha and Interest Rates by Brooks Ritchey of Franklin Templeton Investments
Caution has been the dominant sentiment among investors in recent times even as equities have continued to march along. But as the prospect of rising US interest rates becomes ever more real, Brooks Ritchey, senior managing director at K2 Advisors, Franklin Templeton Solutions, takes a look at how some individuals and institutions are changing their guarded approach. He says alternative investments could find increased interest among savvy investors as interest rates start to tick higher.
2014-09-17 00:00:00 Abenomics 2.0 by Kenichi Amaki of Matthews Asia
The reversal of Japan's equity markets so far this year, have led investors to wonder, "Is Abenomics working?" There are hundreds of components that comprise this economic plan, and among the recent successes has been job creation. However, macroeconomic statistics point to some emerging near-term challenges, including still-muted wage growth. This month Kenichi Amaki takes a look at both current pressures and progress in Japan.
2014-09-16 00:00:00 Authoritarianism versus Democracy: The Key Challenge to Chinese Ascendancy by Michael Edesess and Kwok L. Tsui (Article)
An intense debate has been underway for more than a decade about whether the East - China in particular - is in the ascendancy. Some argue this is so and that the West is in decline. Others say China's flawed political institutions will limit its monumental growth and render it precarious. This an especially opportune time to address these questions.
2014-09-15 00:00:00 The Economy: September Viewpoint by Bruce Laning of Bronfman E.L. Rothschild
The U.S. economy experienced a robust summer for economic expansion and job growth, however recent consumer data is casting doubt as to whether the current level of activity can be sustained. Our position is to maintain an emphasis on higher-quality bonds and be prepared for short-term rate increase(s) in the months to come. The road ahead for stocks continues to look positive, but it would be prudent to keep in mind the inevitable speed bumps that will likely present themselves down the road, as we have not had a meaningful pullback since 2011.
2014-09-15 00:00:00 How Quality Can Lead in the Small-Cap Market by Chris Clark and Chuck Royce (Article)
While quantitative easing has allowed financially leveraged companies to improve their fiscal health over the past several years, Chuck Royce sees signs of small-cap leadership for quality moving forward.
2014-09-14 00:00:00 Whats on Your Radar Screen? by John Mauldin of Mauldin Economics
So lets look at whats on my radar screen today. First up (but probably not the most important in the long term), I would have to say, is Scotland. What has not been widely discussed is that the voting age was changed in Scotland just a few years ago. For this election, anyone in Scotland over 16 years old is eligible. Think about that for a second. Have you ever asked 16-year-olds whether they would like to be more free and independent and gotten a no answer? They dont think with their economic brains, or at least most of them dont.
2014-09-13 00:00:00 Patiently Waiting for Mean Reversion by Frank Holmes of U.S. Global Investors
Because small caps tend to have higher beta than blue chips, you would expect them to outperform in a generally rising market?which we?re currently in. So it appears that a major rotation out of these riskier, more volatile stocks has inexplicably occurred, leading to the wide bifurcation between small and large companies. The good news is that, based on 20 years of historical data, stocks in the Russell 2000 tend to rally in the fourth quarter and continue steadily until around the end of the first quarter. Over this 20-year period ending in December 2013, the Russell has generat
2014-09-12 00:00:00 Distressed Corporate Credit: A Tale of Two Markets? by Sai S. Devabhaktuni of PIMCO
Middle market distressed credit may be an attractive source of higher returns in an overall low yield environment for investors able to access these opportunities. However, the higher return potential comes with greater risks. Imbalances in middle markets are building. ?Investors looking toward distressed credit markets should focus on companies that will likely be able to withstand periods of economic inertia, to undertake careful valuation practices and to strictly adhere to the absolute priority rule (in which senior creditors are paid in full before junior creditors).
2014-09-11 00:00:00 Understanding China's Property Market by Andy Rothman of Matthews Asia
One of the biggest misconceptions about Chinas property market is that most buyers are speculators. In fact, the residential market is driven by owner-occupiers, and even many poor Chinese are homeowners; China is a global leader in homeownership with urban ownership rates at 89%. The boom days may be over, but fundamental demand remains healthy. New home prices rose at an average annual pace of 9% over the last eight years, but nominal urban income rose 13% per year. Communist Party leaders do not appear too worried about property; theyve taken only modest steps to support the m
2014-09-11 00:00:00 The Leapfrog: The Role of Technology in Accelerating Emerging Markets Growth by Mark Mobius of Franklin Templeton Investments
The potential for emerging and frontier markets to realize accelerated economic growth as a result of new technology transfer comes up regularly in our research findings. We have been increasingly excited about a new developmentthe capacity for new technology, particularly related to data over the Internet, to completely bypass swathes of older technology and business activity. We think this could lead to even more dramatic economic progress. In effect, the emerging markets are leapfrogging over the old technology and taking advantage of the newest technology today.
2014-09-11 00:00:00 Parallels to 1937 by Robert Shiller of Project Syndicate
The depression that followed the 1929 stock-market crash took a turn for the worse eight years later, and recovery came only with the enormous economic stimulus provided by World War II, a conflict that cost more than 60 million lives. The global situation today is not nearly so dire, but there are parallels, particularly to 1937.
2014-09-10 00:00:00 A Global Growth Slowdown? by Russ Koesterich of BlackRock
As 2014 is shaping up to be another year of below-trend economic growth, many investors are wondering: Is economic growth once again slowing? Russ explains why his answer is no.
2014-09-08 00:00:00 Searching for Value in Global Small-Cap Stocks by Virginia Au of Invesco Blog
While many global small-cap companies have gotten their balance sheets in good shape over the last few years, valuations are currently a concern. The MSCI World Index is up 184% since the market low on March 9, 2009, and we believe most equities are at or near full value. This makes it much harder to find high-quality companies at cheap prices. Against this backdrop, the challenge is to find the hidden gems within the vast universe of global small-cap companies.
2014-09-07 00:00:00 Europe Takes the QE Baton by John Mauldin of Mauldin Economics
This week well look at what is happening across the pond in Europe, where the above-mentioned negative rates are only one ingredient in a big pot of Bizarro soup. And well think about what it means for the US Federal Reserve to be so close to the end of its quantitative easing, even as the ECB takes the baton to add 1 trillion to the worlds liquidity. And meanwhile, Japan just keeps plugging away.
2014-09-06 00:00:00 The New Challenges of Price Discovery by Frank Holmes of U.S. Global Investors
In the past few years, price discoveryor the act of finding the right price for a securityhas become much more challenging because of falling stock volume and widening bid-ask spreads. These challenges are directly attributable to the infiltration of high-frequency traders into the market, not to mention the expansion of dark pools and non-exchange trading.
2014-09-05 00:00:00 Tennis star Li Na exemplifies China's newfound entrepreneurial spirit. by Patricia Huang of Matthews Asia
After advancing to her first grand slam semifinals, Peng Shuai is China's newest late-career surprise at the U.S. Open. Her compatriot, tennis star Li Na, was the first Chinese player to claim a grand slam singles title, and her success has bolstered the sport's popularity back home in recent years. Both players were among the handful of pioneers to break from the country's state-sponsored teams to take greater control of their futures. This week Patricia Huang writes about China's newfound entrepreneurial spirit.
2014-09-04 00:00:00 Emerging Markets Equity Commentary: July, 2014 by Team of Thomas White International
Emerging market equity prices continued to outperform the developed markets in July and ended the month with moderate gains. Markets in Asia significantly outperformed during the month, helped by signs of stabilizing economic growth in major markets such as China.
2014-09-02 00:00:00 Chinas Reforms Open New Path to Equities by Stuart Rae, John Lin of AllianceBernstein
For investors in China equities, there have traditionally been two ways of approaching the market: through expensive growth stocks, or risky contrarian plays. Now, thanks to Chinas reforms, theres a third way which may offer a better balance of risk and return.
2014-08-30 00:00:00 Anticipate Before You Participate: Patterns in Trading by Frank Holmes of U.S. Global Investors
The primary unit of time measurement for high-frequency traders might be the microsecond, but for normal retail traders, it?s vital to know the best months, days and even half-hours of the day to make market transactions.
2014-08-28 00:00:00 The World is in Crisis…the Markets Are Not by Zachary Karabell of Envestnet
Markets have been gyrating for the past months in the face of a wave of geopolitical crises. But the chance of any of these crises dramatically altering the behavior of markets beyond the short-term is very, very slight.
2014-08-26 00:00:00 A Nation of Shopkeepers by John Mauldin of Mauldin Economics
One of the great pleasures of writing this letter is the fascinating correspondence and the relationships that develop along the way. The internet has allowed me to meet a wide range of people all over the world something that never happened to me pre-1999. Not only do I get to meet a wide variety of people, I also come into contact with an even wider range of knowledge and ideas, much of which comes my way from readers who send me work they think Ill have an interest in. I have a bountiful, never-ending source of thoughtful material, thanks to you.
2014-08-22 00:00:00 Assessing Corporate Credit Risk in Asia by Satya Patel of Matthews Asia
Investing in foreign markets requires a constant questioning of many long-held assumptions that underpin traditional security analysis. This issue of Asia Insight is the first in a series of commentaries to explore the fixed income themes of credit, currencies and interest rates. Given the complexities of Asias fixed income markets, we will examine the many considerations that investors need to take into account to fully appreciate the inherent risks of investing in this market.
2014-08-19 00:00:00 Republic or Empire? An Update, Part 1 by Bill O'Grady of Confluence Investment Management
This topic was last discussed in our report from 2012. We have expanded sections of it in this update and, due to length, will present it in two parts. Over the past two years, how American society answers this question is becoming increasingly critical. There is a steady undercurrent in American politics that seeks to withdraw the U.S. from world affairs. In this report, we will discuss how the American republic began, how it evolved into an empire and how America conducted this role. Next week, we will finish our analysis and discuss market ramifications.
2014-08-18 00:00:00 Why Gilead Is The Most Exciting Growth Opportunity In 2014 by Team of F.A.S.T. Graphs
Earnings drive stock price in the long run and Gilead Sciences Inc (GILD) is entering a remarkable period of what could only be called astounding future earnings growth. This has not gone unnoticed by the market, as the stock price has been on a steady ascent for the past several months.
2014-08-16 00:00:00 Managing Expectations - Part III by Frank Holmes of U.S. Global Investors
In the first of this three-part series on managing expectations, I discussed the role cycles play in the investment management process. At U.S. Global Investors, we actively monitor both short- and long-term cycles, from the annual seasonality of gold to four-year presidential elections, in order to manage expectations based on historical patterns.
2014-08-15 00:00:00 Ready to Board the "Through Train?" by Henry Zhang of Matthews Asia
What is the significance of the soon-to-be rolled out ShanghaiHong Kong Connect, also known as the "through train?" This pilot program is designed to provide mutual access for equity investors between the Shanghai and Hong Kong exchanges. What will be the impact? While incremental, this could be an important step toward opening China's capital account and aiding in the liberalization of China's currency.
2014-08-15 00:00:00 Lifted by Germany and China by Alexander Giryavets of Dynamika Capital L.L.C.
We briefly review the interplay of the global and regional (Europe and Asia) business cycles and where we stand. It turns out that the global business cycle is muddling through, continuing deceleration of China is still trying to find bottom and Germany recently turned the corner and is back to deceleration. While this state of affairs is no news the interesting aspect of this regional interplay which we want to bring to your attention is that US is helped and lifted by deceleration of both neighbors. That said US itself is in a mixed state.
2014-08-12 00:00:00 Developed Asia Pacific: Regional Economic Review - Q2 2014 by Team of Thomas White International
During the first half of 2014, developed Asia Pacific economies faced challenges arising from lukewarm consumption and meek trade growth. Most countries in the region tried boosting their economies with a mix of infrastructure spending and loose monetary policies. Countries that had their trade skewed to China, Asias largest economy, faced prospects of slowing trade.
2014-08-11 00:00:00 Transformation or Bust, Part 2 by John Mauldin of Mauldin Economics
Envisioning a clear path through the issues from where we are today is not easy, though China certainly has more options than the world had with subprime by the middle of 2008, when there was so much toxic waste on the balance sheets of banks all over the world and there was no turning back. As we have emphasized in the past and will do today, China does have options. But each of the options has costs associated with it, and those costs are going up every day. Who pays and when is the simple question that most readers want to have answered, but therein lies the conundrum.
2014-08-11 00:00:00 A Strengthening Case for European Bonds by David Zahn of Franklin Templeton Investments
The pace of the eurozones economic recovery has been so slow that many people are now asking whether quantitative easing (QE) is inevitable to support a recovery and prevent deflation. But David Zahn, portfolio manager for Franklin Global Government Bond Fund, thinks recent European Central Bank (ECB) interventions in the European financial markets already amount to QE. More importantly, he thinks the extensive set of measures that the ECB has announced not only may support Europes economic recovery, but bring a highly favorable backdrop for European fixed income investments gene
2014-08-09 00:00:00 What in the World?! (Sungarden’s Thoughts on Current News Headlines) by Robert Isbitts of Sungarden Investment Research
Summer slowdown? No way! The news is full of compelling story lines. Some of them have investment implications, some do not. Here, we briefly sort them out.
2014-08-09 00:00:00 Important Reform Progress by Andy Rothman of Matthews Asia
Last week's announcement that the Communist Party will reform the hukou, or household registration system, is an important first step toward reducing the contradictions and conflicts in Chinese society. Migrant workers were primarily responsible for China's rapid economic growth, and today account for the majority of the manufacturing and construction workforce.
2014-08-07 00:00:00 Federal Reserve Tapering Part I: Emerging Market Currency Performance by Bradley Krom of WisdomTree
While many investors tend to focus on changes of currency spot rates, a primary reason we have long advocated that investors allocate to EM currencies is the income potential driven by the higher interest rates in many emerging market countries. In todays yield-starved environment, EM currencies remain one of the most significant means of generating income in a portfolio while limiting interest rate risk.
2014-08-07 00:00:00 With US Volatility on the Upswing, Take a Look at Asia by Russ Koesterich of BlackRock
While the U.S. economy appears to be gaining steam, lofty stock prices and rising geopolitical risks are finally taking a toll. Russ discusses one area that still represents an opportunity: Asia, both developed and emerging.
2014-08-04 00:00:00 Dynamic and Durable Growth Part 2: The Enormous Implications of Shale Energy by Erik Voss of Invesco Blog
This is the second in a four-part series examining dynamic and durable growth themes that affect the US economy and may present opportunities for investors. The first post explored the biotech revolution, and the third and fourth posts will discuss the massive changes in mobility.
2014-08-02 00:00:00 5 Takeaways from the Vancouver Natural Resources Conference by Frank Holmes of U.S. Global Investors
Last week I was happy to speak at the Vancouver Natural Resources Conference in beautiful British Columbia. I also had the pleasure of listening to a variety of presentations by some of the most influential names in the investment world, and met a few new faces along the way. Here is what I took away from this years visit to Vancouver:
2014-08-02 00:00:00 Kicking the Habit in Korea by Michael Han of Matthews Asia
Walk the streets of Seouls central business district, and you will still likely see smokers congregating in a few designated areasnarrow alleys between buildings, sending up smoke like chimneys. But even that is seen less and less these days as government officials crack down on public smoking. The next phase of Koreas anti-smoking crusade may involve further taxing its comparatively cheap tobacco products.
2014-08-01 00:00:00 Russias Eurasian Vision by Nouriel Roubini of Project Syndicate
The escalating conflict in Ukraine between the Western-backed government and Russian-backed separatists has focused attention on the Kremlins long-term objectives. Though Russian President Vladimir Putins immediate goal may have been limited to retaining some influence in Ukrainian affairs, his longer-term ambition is much bolder.
2014-07-31 00:00:00 The Sino-American Trust Deficit by Stephen Roach of Project Syndicate
The recently concluded Strategic and Economic Dialogue between the US and China was a major disappointment. Most significant, it failed to address an increasingly corrosive trust deficit that poses the most serious threat to Sino-American relations in 25 years.
2014-07-31 00:00:00 The Chinese Wall of Worry: Uncertainty Rhymes with Opportunity by Francois Sicart of Tocqueville Asset Management
In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, looks at the over-valued global market environment and points out that "While we wait for the day of reckoningwe should not be oblivious to potential opportunities, wherever they may exist. China may be a case in point." Digging deeper, Sicart looks at the negative media perception of China and believes "Many of the problems invoked in the headlines are real. But they are neither new nor, I believe on investigation, as catastrophic as implied."
2014-07-30 00:00:00 Trains and Boats and Planes? by Jeffrey Saut of Raymond James
hose of you who know me know that I have had a love affair with boats ever since I was a kid. In my youth it was speedboats on various lakes in Michigan. In my teens, and into my forties, it was sailboats combined with an occasional trawler. In later life, however, it has been strictly powerboats.
2014-07-29 00:00:00 Thomas White's 2014 Mid-Year Market Outlook by Thomas White (Article)
45-year industry veteran Tom White offers a review of current global economic trends and the outlook for the second half of 2014, with insights on the investment opportunities that may arise in the near future. Listen to why he sees "interest rates continuing to fall" and why "we are positive about what is going on" in the global economy.
2014-07-29 00:00:00 How to Blend In a Currency Hedge by Jeremy Schwartz of WisdomTree
Looking across developed markets today, a common thread is that central bank policies have pushed interest rates to very low levels to support their economies.
2014-07-26 00:00:00 Second Quarter Earnings: Marching Toward a Strong Recovery by Frank Holmes of U.S. Global Investors
It?s earnings season once again, and though only a quarter of the Russell 1000 has reported so far, the news is just north of positive. All signs indicate that the market has dusted itself off and is back to its cheerful self after a ho-hum first quarter, which was negatively affected by harsh winter weather.
2014-07-26 00:00:00 Consumption and Services Deliver Healthy Growth by Andy Rothman of Matthews Asia
Three interesting economic trends, each relevant to investors, are clear from Chinas first half macro data. First, economic growth has stabilized at a healthy pace despite a weak property sector. Second, driven by strong income growth, China remains the worlds best consumption story. Third, rebalancing continues, with consumption accounting for a larger share of GDP growth than investment, and with the services sector bigger than manufacturing and construction.
2014-07-24 00:00:00 More Volatility Ahead? by Russ Koesterich of BlackRock
Despite recent market swings, volatility is still very low by historic standards, suggesting that markets arent taking into account the prospect of bad news and that investors should prepare for more turbulence ahead.
2014-07-23 00:00:00 Should EMC Corp Break Itself Apart?: FAST FUNdamental Analysis by Team of F.A.S.T. Graphs
On Monday a Wall Street Journal article reported that the hedge fund Elliott Management Corp has taken a more than $1 billion stake in EMC Corp (EMC) and revealed that it intends to petition the company to break itself apart. Elliott believes that this would unlock shareholder value. Implicit in that thesis would be the idea that EMC Corp is not receiving full value from the market. This article is offered as an in-depth analysis of the fundamental value of EMC Corp in relation to how the market is evaluating its business.
2014-07-22 00:00:00 Anatomy of a Moat by Kenneth Lowe of Matthews Asia
At Matthews, we often talk about investing in quality companies with economic moats. We believe that these are the entities best placed to succeed over the long term in Asia. As Warren Buffett has noted, investors should seek businesses with economic castles protected by unbreachable moats. It is these moats that enable a company to survive and thrive as decades pass, creating economic value along the way by generating returns on capital ahead of their cost of capital. But what exactly is an economic moat?
2014-07-19 00:00:00 The Municipal Bond World, According to John Derrick by Frank Holmes of U.S. Global Investors
I sat down with Director of Research John Derrick, who also manages our Near-Term Tax Free Fund (NEARX), to get his thoughts on interest rates, the bond market and what investors should pay attention to as we move into the second quarter of 2014.
2014-07-19 00:00:00 Understanding Chinese Volatility by Andy Rothman of Matthews Asia
Sinology by Andy Rothman is a publication designed to provide investors with a framework for developing a deeper understanding of China and its economy. The focus will be on discussing the longer-term trends that are taking place in the country and their impact on the global economy. Rising volatility in China is a consequence of economic modernization and should not be feared by long-term investors.
2014-07-16 00:00:00 Danger of Increased Risk Taking as Markets Boom by Geoff Davey of FinaMetrica
While some investors (and their advisors) believe risk tolerance changes with major events such as a stock market correction, typically it is an investors perception of risk that changes, which results in a change in their behavior. At the moment, many investors are buying stocks with elevated P/E ratios. Prices are going up a lot faster than corporate earnings and the risks are getting bigger. Yet people are still buying stocks.
2014-07-16 00:00:00 Road Kill by Edward Talisse of Chelsea Global Advisors
Ten years ago I started working in Japan as a fixed income sales-trader for an international investment bank. I was frequently called upon to travel to other parts of Asia such as Beijing, Hong Kong, Seoul, Singapore and Sydney. My mandate was to invite clients to explore the many money making opportunities available to them by trading the (G4) U.S., German, U.K. or Japanese yield curve. The touchstone recommendation always seemed to be some combination of going long or short U.S Treasuries and establishing an offsetting position in like maturity German Bunds.
2014-07-15 00:00:00 The High Tide in China by Matt Lloyd of Advisors Asset Management
One axiom that has been used over the last couple decades is that high tide lifts all boats; meaning that a rise in economic or market conditions will lift every component of an economy or market to some degree. While true, we deal with relative measurements when discussing returns comparable to a benchmark. So, while the high tide does lift all boats, if the boat is tethered too tightly, you may be higher than being beached, but you also could still be underwater.
2014-07-15 00:00:00 The Dollar Weapon by Bill O'Grady of Confluence Investment Management
Over the past few years, various prosecutorial arms of U.S. government entities have brought charges against foreign banks that have violated U.S. sanctions that were placed on different countries. In this report, we will discuss the general nature of U.S. sanctions and how these banks violated American law. From there, we will reiterate the dollars reserve currency role from both a historic and theoretical perspective and show how this role makes the currency and the U.S. financial system pivotal in the global economy. We will conclude with market ramifications.
2014-07-15 00:00:00 Booming Until It Hurts? by Robert Shiller of Project Syndicate
In recent months, concern has intensified among the worlds financial experts and news media that overheated asset markets real estate, equities, and long-term bonds could lead to a major correction and another economic crisis. The general public seems unbothered, but the experts' concern is healthy.
2014-07-13 00:00:00 Life has Changed in Burma by Patricia Higase of Link Road Capital Management
Changes come from within a country on a day to day basis and are happening far longer without being obvious. Life in Burma has changed drastically uncovering new opportunities. The changes are real and certainly isnt all hype.
2014-07-12 00:00:00 2014 Commodities Halftime Report by Frank Holmes of U.S. Global Investors
What a difference six months can make. After a disappointing 2013, the commodities market came roaring back full throttle, outperforming the S&P 500 Index by more than 4 percentage points and 10-year Treasury bonds by more than 6.
2014-07-11 00:00:00 Indonesia: Hope for Change by Siddharth Bhargava of Matthews Asia
On Wednesday, Indonesia went to the polls to elect its seventh president. Unofficial results predict Joko Widodo, or Jokowi, to be the winner in a very tight race with rival Prabowo Subianto. Widely considered a man of the people, Jokowi came from humble beginnings as a furniture salesman. Although still lacking in experience on the national stage, his leadership is expected to be a stark contrast from Prabowos likely authoritarian style.
2014-07-09 00:00:00 Choosing Winners in Asian Credit: Key Trends and Themes by Raja Mukherji, Ronie Ganguly of PIMCO
Key trends include Asian credit supply, which is on track for another record year in 2014, and China's priority to promote cleaner and more efficient energy. Our bottom-up research and careful risk assessments informed by macroeconomic perspectives have us favoring select investments in several sectors of Asian credit markets, including state-owned enterprises in China and Korea, investment grade new issues and Basel III Tier 2 bank capital bonds. ?
2014-07-05 00:00:00 I'm Grateful to Live in America. Here's Why. by Frank Holmes of U.S. Global Investors
An important principle of our investment process at U.S. Global Investors is a belief that government policies are a precursor to change. As a result, we closely monitor the fiscal, monetary and other impactful governmental policies of the worlds largest countries, both in terms of economic stature and population. Were always listening for the proverbial shot heard around the world. As we approach Americas Independence Day, this belief rings especially true.
2014-07-05 00:00:00 Harnessing Solar in China by Teresa Kong of Matthews Asia
China has revised its solar energy targets several times in recent years. This year, it has set even more aggressive targets for solar deployment. But it still has a long way to go before large-scale adoption is possible. This week, Teresa Kong writes about her visit to a small town outside of Beijing to see a Greenpeace solar project that is encouraging households and enterprises to consider going green. What are the barriers to smooth implementation?
2014-07-01 00:00:00 The 2014 Mid-Year Geopolitical Update by Bill O'Grady of Confluence Investment Management
As is our custom, we take the middle of the year to reflect on the current geopolitical situation. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of the year. It is not designed to be exhaustive; instead, it focuses on the big picture conditions that we believe will affect policy and markets going forward. They are listed in order of importance: Americas Strategic Drift, Chinese Maritime Expansion, The German Problem, and The Remaking of the Middle East.
2014-06-28 00:00:00 Health Care Sector Spurred by Population Growth and M&As by Frank Holmes of U.S. Global Investors
Recently I spoke with John Derrick, director of research here at U.S. Global, to pick his brain about what he thought was the most interesting sector right now. You might expect him to have said energy, perhaps because of the intensifying violence in Kurdistan Iraq, a major oil producer. But instead, he said that he had his eyes on health care.
2014-06-26 00:00:00 You Don’t Have to Love Soccer by Brian Andrew of Cleary Gull
The FIFA World Cup (for soccer aka football) is in full swing. There are 32 teams from around the world treating a world-wide audience of nearly 2 billion to a great show of sport. The teams are competing for $576 million in prize money. And while the U.S. will not likely make it to the final match, the tournament does offer some insight into diverse economies around the globe and why we should consider international investments as a pillar in any portfolio.
2014-06-23 00:00:00 The Rise of E-Commerce in Asia by Jerry Shih, Winnie Chwang of Matthews Asia
Its no surprise that Asiahome to two of the worlds most populous countriesholds great potential for e-commerce. Much of this growth has been driven by the fact that e-commerce, particularly in India and China, has helped serve as a bridge between what people want and what people can get offline. This is especially true for those who live outside major urban areas.
2014-06-21 00:00:00 Ah, the Power of Mean Reversion. by Frank of U.S. Global Investors
The chatter this week has been gold. The precious metal flew up $45 an ounce on Thursday, surprising investors, the media and markets alike.
2014-06-20 00:00:00 Attractions of a "Walled Garden" by Vivek Tanneeru of Matthews Asia
Developments in free trade and a nurturing of open policies with relatively few barriers have helped Asia prosper for several decades now. But a restrictive walled garden environment, with tightly regulated market access, has nurtured Chinas Internet sector and helped its firms dominate in such areas as online search, games, news, e-commerce, social networking and videos. This week Vivek Tanneeru explores a study in contrasts between the Internet sectors of China and India, the worlds two most populous nations.
2014-06-18 00:00:00 On-the-Ground Perspective in Thailand by Dennis Lim of Franklin Templeton Investments
Thailand has been in the throes of political crisis over the past few months, leading to the imposition of martial law in May after months of protests and threats of violence between two opposing groupsthe anti-government Peoples Democratic Reform Committee (PDRC), known as the yellow shirts, and the pro-government United Front for Democracy against Dictation (UDD), known as the red shirts.
2014-06-17 00:00:00 Stiglitz: Europe's View on Inequality by Marianne Brunet (Article)
When you approach a crowd conversing over coffee at an economics conference, you don't normally expect to hear them giddily saying: "He's absolutely adorable! Adorable, and so sweet." But at a recent economics conference in Toulouse, France, participants were raving about Joseph Stiglitz like he was a movie star.
2014-06-14 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust
The World Cup begins amid a series of financial controversies; Is the honeymoon over for Japan's Abenomics program?; The last word on Thomas Piketty
2014-06-13 00:00:00 New Faces at the Federal Reserve by Craig Elder of Robert W. Baird
The Federal Open Market Committee (FOMC) is the monetary policymaking body of the Federal Reserve System. This article provides a behind the scenes look at recent changes in the composition of FOMC voters, characterizing them as a dove, focused more on higher employment, or a hawk , concerned more with the central banks inflation targets. One of the implications from this analysis is that the Fed will be more reluctant to raise interest rates next year than most people think.
2014-06-13 00:00:00 Is the European Economy Turning Japanese by PJ Grzywacz of CMG Capital Management Group
Turning Japanese in todays macroeconomic environment means that your country is at risk of deflation which can turn into a 20 year battle, like in Japan.
2014-06-13 00:00:00 Is China Still Competitive? by Andy Rothman of Matthews Asia
Investment Strategist Andy Rothman recently moved to San Francisco from Shanghai, and has experienced a bit of sticker shock. This week he reflects upon China's ability to remain competitive. What does a visit to his favorite neighborhood noodle shop in China reveal about the country's macroeconomy?
2014-06-12 00:00:00 A Quarter Century of Emerging-Markets Investing by Mark Mobius of Franklin Templeton Investments
At one time or another, every country could have been classified as emerging. Back in the 1800s, the Western part of the United States was called the new frontier. Investors purchasing farmland there were likely to consider it a highly speculative venture putting stakes in such a rugged and wild place.
2014-06-11 00:00:00 Technical Checkup Of MSCI World Regions by Team of GaveKal Capital
There are many ways to measure the intensity of moves in the equity market. One method we use is to measure the net percent of stocks up over a certain time period.
2014-06-11 00:00:00 US Regional Banks Attractiveness Jumps in June by Erik Kobayashi-Solomon of YCharts, Inc.
Our Sector-level heat map looks much the same as it did last month, save for the fact that the shade of green has deepened for the Utilities and Financial Services sectorsindicating a larger number of companies screening undervalued according to YCharts Value Score.
2014-06-08 00:00:00 Can Central Planners Revive Chinas Economic Miracle? by John Mauldin of Mauldin Economics
We are going to try gamely to finish with China today, having left at least three or four letters worth of copy on the editing floor. There is just so much information and misinformation to cover. Im going to turn it over to Worth and then follow up with a few final thoughts of my own.
2014-06-07 00:00:00 China Leads the World in Green Energy, Gaming and Gambling Markets by Frank Holmes of U.S. Global Investors
Last month, Xian Liang, co-portfolio manager of our China Region Fund (USCOX), attended the 19th CLSA China Forum in Beijing. There he and hundreds of other global attendees were given the opportunity to meet with representatives from Chinese corporations, some of which U.S. Global owns. Xian also managed to get a sense of how the nation?s recent changes in consumer behavior and governmental policy reforms might affect its investment outlook. Although China remains an emerging market, it has lately taken a number of considerable strides to position itself as one of the world?s most
2014-06-06 00:00:00 Ties that Bind by Patricia Huang of Matthews Asia
It's been almost three years since A-di first moved in with my relatives in Taiwan to work as a caretaker for my ailing grandmother. A college graduate from Indonesia with a reserved demeanor and an endearing smile, A-di, or Di Di as my family sometimes calls her, was found through an agency that places migrant workers in jobs abroad. Like her sister, a factory worker in Taiwan, she regularly sends a portion of her roughly US$550 monthly pay back home to her parents in West Java.
2014-05-31 00:00:00 From Constantinople to Istanbul, Turkey Has Never Been Better by Frank Holmes of U.S. Global Investors
Every time he travels to Turkey, portfolio manager of our Emerging Europe Fund (EUROX), Tim Steinle, says the country continues to develop. Although technically classified as an emerging market, one wouldn?t think to label the country as such upon arrival. The population is young and growing, there are improvements to infrastructure everywhere you look, beautiful green parks are more prevalent, and the professional staffs that run many of the shops and businesses are both well organized and thriving.
2014-05-30 00:00:00 The Growing Importance of Natural Gas by Skip Aylesworth of Hennessy Funds
The natural gas industry is experiencing a revolution. Fueled by advances in drilling technology, natural gas has become an abundant energy source and is quickly becoming Americas domestic energy solution. In fact, it is believed that we now have a 100-year supply in the U.S. even with increasing demand.
2014-05-30 00:00:00 Global Economic Perspective: May by Franklin Templeton Fixed Income Group® of Franklin Templeton Investments
We believe a substantial improvement in US growth is underway, despite first-quarter 2014 gross domestic product (GDP) growth coming in at an annual rate of -1.0%, well below market expectations.
2014-05-30 00:00:00 Seoul Searching by Michael Han of Matthews Asia
South Korea's Sewol ferry disaster in April has not only been one of the country's most tragic events in recent memory, it is also one that is leaving an indelible mark on Korean society. The incident claimed hundreds of young lives, led to a public outpouring of anger, capital punishment charges and several key resignations, including that of the Prime Minister.
2014-05-30 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust
Reflections from a fortnight abroad;Last weekend's European elections will make cooperation more difficult
2014-05-27 00:00:00 Kyle Bass: The Looming Crises in Asia by Robert Huebscher (Article)
For the last several years, nobody has been more outspokenly bearish on Japan than Kyle Bass. In a recent talk, Bass reiterated his doubts about Japan's chances of averting a debt crisis. What's more, he also said China's economy will fall below expectations.
2014-05-27 00:00:00 After Indias Election, Execution takes Center Stage for Debt Markets by Jack Deino of Invesco Blog
Financial markets in India have already rallied strongly in anticipation of the overwhelming majority win by incoming Prime Minister Narendra Modi and the Bharatiya Janata Party (BJP). The countrys currency (the Indian rupee) rose 15% from its August peak, while five-year credit default swaps on the State Bank of India (SBI) tightened from a spread of 371 to 207 in the same period.
2014-05-24 00:00:00 In a Flash, China Looks Strong by Frank Holmes of U.S. Global Investors
If you want to know where the world economy is headed, there is one number that I believe investors should focus on: the HSBC China Manufacturing Purchasing Managers Index (PMI). On Thursday, the preliminary flash PMI for May came in at 49.7, beating Bloombergs consensus of 48.3.
2014-05-23 00:00:00 Online Upstarts Challenge Chinese Banks by Richard Gao of Matthews Asia
Chinese banks have long operated under a protective environment in which deposit and lending rates have been managed in a rather tight band by the central bank. One advantage of these controls for the banks has been fixed net interest rate margins. But Chinas traditional state-owned banks have been pressured recently to try to keep depositors from seeking the higher yield products now offered by online Chinese financing firms.
2014-05-21 00:00:00 Pacific Powers: Australia and Japan by Don Huber of Franklin Templeton Investments
Separated by nearly 4,000 miles of sea, the economies of Australia and Japan are often lumped together under the Asia Pacific (APAC) label. Both of these countries can be considered global powers and powerful GDP generators, but their economies, the challenges they face and their responses to those challenges have been very different. Don Huber, vice president, research analyst and portfolio manager, Franklin Equity Group, looks at how these APAC powers are navigating their unique issues and shares his market outlook for each.
2014-05-20 00:00:00 Will Global Tensions Derail the US Recovery? by Robert Huebscher (Article)
It's not the Fed's monetary policy that investors should fear, but the "geopolitical tapering" undertaken by the Obama administration, contends Niall Ferguson, the Harvard historian. Ian Bremmer, the political scientist and chairman of the Eurasia Group, disagrees - despite some tactical missteps, he said, the current administration has achieved reasonable results.
2014-05-20 00:00:00 Computer Tutor?! by Jeffrey Saut of Raymond James
My friend Jerry Goodman died recently. His nom de plume was Adam Smith, obviously taken from the legendary economist Adam Smith (1723 1790). In addition to the book The Money Game, Jerry wrote numerous other books. In his later years, he worked at another friends establishment, that being Craig Drill, eponymous captain of the insightful Drill Capital Management.
2014-05-16 00:00:00 India: Counting Efficiently by Rahul Gupta of Matthews Asia
Indias massive election processinvolving more than 1 million polling stations and 800 million eligible votershas just drawn to a close. Despite being a poor country with annual GDP per capita on the lower end of Asian economies (at US$1,527), it is home to some of the worlds best IT and generic pharmaceutical companies. Electronic voting is one illustration of the dichotomies that are present in the rapidly changing nation. This weeks Asia Weekly explores the hurdles and the technology used to manage the worlds biggest democratic election exercise.
2014-05-15 00:00:00 Schroders Monthly Markets Review: Overview of Markets in April 2014 by Keith Wade, Azad Zangana, Craig Botham of Schroder Investment Management
Global equities edged higher in April. Some stronger macroeconomic data from developed economies helped to support returns but the ongoing crisis in Ukraine remained a headwind for equities. Developed markets outperformed emerging markets. In the US, a generally firmer tone to macroeconomic data and a broadly encouraging corporate earnings season supported sentiment. Investors were also reassured by comments from Federal Reserve (Fed) Chair Janet Yellen about maintaining low interest rates.
2014-05-13 00:00:00 El Nio by Kaisa Stucke, Bill OGrady of Confluence Investment Management
In our investing process, we look across the spectrum at a multitude of possible events, their probabilities, their effects on markets and weigh them against market prices. Sometimes these discrepancies come from unexpected places. This week we will explore the ramifications of a weather event, El Nio. The soft-commodity markets (grains, sugar, coffee, cocoa and other annual crops) seem to have priced in about a 20% likelihood of an El Nio occurrence this year, while last week the Climate Prediction Center issued a 65% probability for this summer.
2014-05-13 00:00:00 Market Perspective by The CCR Wealth Management Investment Committee of CCR Wealth Management
US equity markets have seen what we would describe as mild volatility over the last few weeks, mostly attributed to geopolitical tensions emanating from the Ukraine-Russia belligerence. For the first quarter, the S&P 500 rose 1.30%, while the Dow Jones Industrial Average and the NASDAQ composite were both down slightly.
2014-05-12 00:00:00 Emerging Markets at Risk by George Bijak of GB Capital Pty Ltd
The massive post-GFC Quantitative Easing (QE) in the USA, EU, and now in Japan has repaired the global banking systems balance sheet. Debt of various qualities, worth trillions of dollars, was moved from struggling banks to the central banks at book value where it is likely to run out to maturity or rollover.
2014-05-08 00:00:00 Where Is the Inequality Problem? by Kenneth Rogoff of Project Syndicate
Though Thomas Piketty is right that returns to capital in rich countries have increased in the last few decades, he is too dismissive of the wide-ranging debate among economists concerning the causes. More important, when it comes to reducing inequality between rich and poor countries, capitalism has had an impressive three decades.
2014-05-07 00:00:00 The Top Five Government Policies I’m Watching This Week by Frank Holmes of U.S. Global Investors
Every morning when I meet with the investment team, we review the news of the previous day, the movements of the markets around the world, and corporate actions that may affect our funds. This is how we keep our ears open in order to manage money that shareholders like you have entrusted us with. We meet again at lunchtime, daily, to share ideas, because something happening in China may affect the U.S. markets, or an energy company might have news that can benefit our domestic funds as well as our resources funds.
2014-05-05 00:00:00 Asian Currencies to Stay Calm at Center of EM Storm by Hayden Briscoe of AllianceBernstein
Emerging markets have fallen from favor, but does that mean investors should avoid them entirely? We don?t think so.
2014-05-03 00:00:00 Housing may be returning to a bad neighborhood by Team of Northern Trust
The head of financial stability at the Bank of England recently called rising property prices ?the very brightest [hazard] light on its dashboard.? But he may have a difficult time getting his colleagues who are charged with promoting full employment to agree with him. And if they do, it is far from clear what they might do about the issue. Some favor supervisory curbs; others prefer the more-traditional method of raising rates. The recovery in global real estate has been pronounced. While it beats the alternative, one wonders whether the hard lessons learned in recent corrections have been su
2014-05-02 00:00:00 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn
Earnings have been supportive and merger activity has skyrocketed these past couple weeks. Stock markets have remained firm as a result despite money coming out of the previous hot sectors of social media (Amazon) & the biotech industry (despite great fundamentals).
2014-05-02 00:00:00 Emerging Markets Outlook - April 2014 by Team of Thomas White International
Emerging market equities as an asset class have been underperforming developed market equities for more than three years, though they continue to maintain the lead over 10-year returns. The divergence in returns between emerging and developed markets widened sharply in 2013, when the prospect of reduced capital inflows heightened investor concerns about slower economic growth in the emerging countries.
2014-05-02 00:00:00 Down Under: Commodities to Consumption by Tarik Jaleel of Matthews Asia
Ever since China's demand for commodities intensified around 1999, its increased reliance on imported energy and minerals has underpinned Australia's boom in the natural resources industry. Naturally, as China's import growth has recently slowed, materials and energy sector firms in both Australia and New Zealand have grown cautious about their business prospects.
2014-04-30 00:00:00 Global Ground Zero in Asia by Nouriel Roubini of Project Syndicate
The most pressing geopolitical issue of our time is not the prospect of conflict between Israel and Iran over nuclear proliferation or rising tensions between Russia and the West over Ukraine. It is the challenge of managing China's rise and ensuring that peace and prosperity prevail in Asia.
2014-04-28 00:00:00 The Devolution of Diversification by Chris Richey of Neosho Capital
We are only some 40 years removed from an era when the typical investment account had 12 or fewer individu-al holdings, and less than 20 years removed from a time when respected stock funds might hold 20-30 stocks and be considered ?fully diversified?. Now we find that the typical active equity portfolio or fund holds between 50-100 individuals stocks and that there are generally three or more such active equity managers for each institutional or high net worth account, all adding up to hundreds of underlying holdings.
2014-04-26 00:00:00 China Holds the Keys to the Gold Market by Frank Holmes of U.S. Global Investors
It?s important to follow the money, or in this case the gold, to see how people around the world react to this rare commodity. Looking forward, stay curious as an investor and you?ll see if China can keep the key to the gold market.
2014-04-25 00:00:00 Developed Asia Pacific: Regional Economic Review ? Q1 2014 by Team of Thomas White International
Developed Asia Pacific economies showed increased resilience as loose monetary policies of the past two years helped create demand, boost employment, and increase output.
2014-04-24 00:00:00 Resistance is Futile, for Now by Scott Minerd of Guggenheim Partners
The U.S. ?risk-on? trade is still in place, even as some leveraged credit is showing signs of overheating.
2014-04-24 00:00:00 Emerging Asia Pacific: Regional Economic Review - Q1 2014 by Team of Thomas White International
The byword for economic prospects in emerging Asia Pacific economies during the first quarter of 2014 was "optimism". The countries in the region, despite undergoing a torrent of political activity and struggle, pinned their hopes on a revival in global trade. With other avenues of growth such as investment and consumption showing little promise, the emphasis on global trade took on even greater importance.
2014-04-24 00:00:00 The Flaws and Potential of Asia's SOEs by Sherwood Zhang of Matthews Asia
Asian governments own a large amount of productive assets in the form of state-owned enterprises (SOEs). These firms are typically in strategic industries of national interest, but among the broader investor community they are often viewed negatively, marked by reputations for inefficiency and potential conflicts of interest. This month Asia Insight explores the challenges that face SOEs and possible models that could be positive for business.
2014-04-23 00:00:00 Positioning Your Portfolio for Rising Rates. by Team of Forward Management
Accelerating outflows from bond funds in 2013 highlight investor nervousness over the prospect of rising interest rates. Investors may want to carefully assess the role of fixed-income investments in their portfolios, particularly in light of other types of income-producing vehicles. Upon careful evaluation of their options, investors can make adjustments suitable to their objectives.
2014-04-22 00:00:00 Emerging Europe: Regional Economic Review - Q1 2014 by Team of Thomas White International
The International Monetary Funds latest assessment of the global economy pointed out that robust economic recovery in developed countries has significantly reduced the risk of a downturn this year. The Washington-based lender said it sees growth in emerging and developing Europe as a whole at 2.4 percent in 2014, which is expected to accelerate to 2.9 percent next year.
2014-04-21 00:00:00 Cast a Wider Net for Asian Income Stocks by Stuart Rae, Katsuhiko Mano of AllianceBernstein
Equity income has been a hot theme for Asian investors. But safer sectors that typically provide higher dividend yields are expensive. By casting a wider net, we think attractively priced income stocks can still be found in unexpected parts of the markets.
2014-04-21 00:00:00 Rising Food Prices May Whet Investors' Appetite for Agriculture by Nick Kalivas of Invesco Blog
Food prices are affected by a wide range of factors - from weather to geopolitics. Today, these factors seem to be pointing toward rising food inflation, and investors want to know where potential opportunities may lie.
2014-04-17 00:00:00 A Bend in the Road is Not the End of the Road by Scott Minerd of Guggenheim Partners
Turmoil in Ukraine, growth concerns in Japan, and weakness in U.S. equity markets are giving U.S. investors a short-term case of heartburn but none of this should undermine the overall case for optimism.
2014-04-17 00:00:00 U.S. Financials: Investment Theme Update by James Calhoun of AdvisorShares
We reaffirm our recommendation for U.S. Banking and Financial Services as a satellite equity investment. The Federal Reserves "Stress Test" reinforces a constructive outlook and conservative risk profile for U.S. Banks. The positive results confirm that U.S. banks have enhanced their ability to withstand macroeconomic challenges by reducing problem assets during the past few years. Equally important, the financial sector appears to be more exposed to a key driver of the broader equity market advance over the last few years: share buyback programs and increasing dividends.
2014-04-17 00:00:00 Pinning Hopes on the 'Chosen One' by Sharat Shroff of Matthews Asia
, I would caution against expectations of a quick fix or a fixation over the short term. As in much of the rest of Asia, India and Indonesia are attempting to tackle their issues and this makes us optimistic for the future. We look forward to an environment of better governance that is critical for both social and economic progress.
2014-04-17 00:00:00 Three Yards and a Cloud of Dust by Sam Stewart of Wasatch Funds
Former Ohio State football coach Woody Hayes was well-known for his conservative offense-often quoted as saying, "There are only three things that can happen when you pass, and two of them are bad." The two bad outcomes are either an incompletion or an interception. Instead, Hayes favored a methodical, grind-it-out approach, running the ball directly into the line: "three yards and a cloud of dust." What Hayes style of play may have lacked in pizazz, it more than made up for in results. The U.S. economy today is following a similar offensive playbook, but with less satisfying results.
2014-04-16 00:00:00 And That's The Week That Was by Ron Brounes of Brounes & Associates
And what a bad week it was. After flirting (and setting) new record highs on both the S&P and Dow, equity investors worried about the upcoming earnings reports and freaked out over the some disturbing news from China. Stocks plunged late in the week with the Nasdaq particularly hard hit, though the other indexes followed suit and gave up all of their prior gains for the year. For the most part, domestic developments remain strong but news on the global front have prompted investors to seek out the safe-haven of treasuries. Over-reaction or new trend?
2014-04-12 00:00:00 Every Central Bank for Itself by John Mauldin of Millennium Wave Advisors
Whether the FOMC can actually turn the taper into a true exit strategy ultimately depends on how much longer households and businesses must deleverage and how sharply our old-age dependency ratio rises, but markets seem to believe this is the beginning of the end. For now, that?s what matters most. Under Fed Chair Janet Yellen?s leadership, the Fed continues to send a clear message to the rest of the world: Now it really is every central bank for itself.
2014-04-11 00:00:00 Chinese Checkers with Gold Prices by John Browne of Euro Pacific Capital
For decades many of us in the hard money world have speculated that cloak and dagger activity by large financial interests has played a large role in determining performance in the gold market. The focus of this alleged manipulation is believed to be in the London market, and has been widely referred to as "The London Fix." However those who have blown the whistle have been dismissed as alarmists, gold bugs, conspiracy theorists or worse. But recent revelations should bring us closer to the truth.
2014-04-11 00:00:00 Bubble Bursting? Only for Biotech & Internet Stocks by Russ Koesterich of iShares Blog
The recent sluggish performance of U.S. stocks is leading some market watchers to question whether we?re witnessing the bursting of an equity bubble. Russ explains that while U.S. equities overall are not in a bubble, valuations have started to become an issue, particularly for certain segments of the market.
2014-04-11 00:00:00 Why China's A-Shares Matter Now by Winnie Chwang of Matthews Asia
Although we often receive questions on mainland China?s A-share equities, which trade on the Shanghai and Shenzhen Stock Exchanges, we currently invest in Chinese equities primarily via Hong Kong-listed companies and also by way of U.S.-listed Chinese firms. China?s domestic A-share market remains largely closed to foreign institutional investors. The only way for foreigners to participate in this market is to enroll in China?s Qualified Foreign Institutional Investor (QFII) program or invest via a manager who has a quota in this program.
2014-04-04 00:00:00 Pakistan?Reputation and Reality by Taizo Ishida of Matthews Asia
I have been spending an increasing amount of time in ?frontier? Asian countries, exploring such fascinating locales as Mongolia and Myanmar. But only recently did I make my first trip to Pakistan. It is a country that has long piqued my interest and was a last, unexplored frontier for me. Through the years, we have debated the issues of safety and law and order there. For many in the West, the mention of Pakistan instills some fears, and many governments continue to warn their citizens to defer all non-essential travel to the country.
2014-04-04 00:00:00 Why Chinese Stocks May Still Make Sense Over the Long Run by Russ Koesterich of iShares Blog
Many investors have been concerned about the Chinese market lately and are asking Russ whether they should abandon Chinese stocks. Russ explains why his answer is still no, at least for the long term.
2014-04-04 00:00:00 What's Abuzz About Gold? by Frank Holmes of U.S. Global Investors
If we continue to see these large movements of the physical metal, especially from the West to the East, it would appear to be only a matter of time until these supply-and-demand factors lift the gold price.
2014-04-03 00:00:00 VIX Exchange Traded Products...Growth and Risk Impact by Daniel Kirsch of Macro Risk Advisors
The growth of ETFs has been nothing short of tremendous. What started as a product designed to provide investors with broad equity or sector exposure in the US, the ETF landscape now includes a myriad of geographies (Europe, Asia) and asset classes (FX, rates, credit, commodities). Research consultancy firm EFTGI estimates that there are almost 5,000 ETFs globally with total AUM in excess of $2 trillion.
2014-04-02 00:00:00 4 Areas Revved Up for a Resources Boom by Brian Hicks of U.S. Global Investors
Commodity returns vary wildly, as experienced resource investors can attest and our popular periodic table illustrates. This inherent volatility can spell opportunity for the nimble investor who can look past the mainstream headlines to identify hot spots. Our global resources expert, Brian Hicks, CFA, identified four we believe are revved up for a resources boom.
2014-03-31 00:00:00 Labor Market Clues for Bond Investors by Christopher Molumphy of Franklin Templeton
When the US Federal Reserve (Fed) began tapering early this year, the general assumption was that investors would flee en masse from fixed income investments. Certainly, there has been some volatility in Treasury yields, most recently after Fed Chair Janet Yellen suggested interest rates could start to rise around six months after tapering ends ? which would be somewhat sooner than many were expecting.
2014-03-28 00:00:00 Americas: Regional Economic Review 4Q 2013 by Team of Thomas White International
The outlook for the developed economies in North America remains healthy while the emerging economies of Latin America continue to face headwinds. Though recent data from the U.S. and Canada have indicated moderation in economic activity, most of the slowdown was likely caused by adverse weather conditions in the region.
2014-03-28 00:00:00 Asia's E-Commerce Trends by Jerry Shih of Matthews Asia
On a recent research trip, I went to Beijing, Hong Kong, Tokyo and Melbourne and spoke with Internet companies in industries as diverse as automotives, travel and real estate. I also met with several e-commerce companies with varying Internet penetration rates. As growth rates for new Internet users across parts of Asia level off, comparing these firms offered me an interesting glimpse into the potential opportunities and challenges facing the region's newer Internet firms.
2014-03-28 00:00:00 Four Areas Revved Up for a Resources Boom by Frank Holmes of U.S. Global Investors
Commodity returns vary wildly, as experienced resource investors can attest and our popular periodic table illustrates. This inherent volatility can spell opportunity for the nimble investor who can look past the mainstream headlines to identify hot spots. Our global resources expert, Brian Hicks, CFA, identified four we believe are revved up for a resources boom.
2014-03-22 00:00:00 China's Minsky Moment? by John Mauldin of Millennium Wave Advisors
In speeches and presentations since the end of last year, I have been saying that I think the biggest macro problem in the world today is China. China has run up a huge debt, and the payments are coming due. They seem to be proactive, but will it be enough? How much risk do they pose for the global system?
2014-03-21 00:00:00 China's Evolving Health Care Landscape by Hayley Chan of Matthews Asia
China has begun a long-term transformation of its health care industry. Much of this industry is still fragmented and in the early stages of consolidation. China?s top 10 pharmaceutical companies, for example, account for a combined market share of approximately 20% versus more than 60% in the U.S.
2014-03-21 00:00:00 World Industrial Production Finished 2013 At An All-Time High by Team of GaveKal Capital
The CPB Netherlands Bureau for Economic Policy Analysis publishes a monthly report called "World Trade Monitor". This report tries to quantify the seemingly unquantifiable; world industrial production and world trade volume and prices. Either later today or early next week the CPB should come out with the first statistics for 2014. Today, however, we are going to take a look at world industrial production for 2013.
2014-03-20 00:00:00 The Song Remains the Same by Scott Minerd of Guggenheim Partners
The noisy journey from winter to spring in the United States may mask the underlying strength in the U.S. economy. The risk-on environment should remain intact, despite international tensions.
2014-03-18 00:00:00 Japan?s Rising Opportunity by Neil Hennessy, Masakazu Takeda of Hennessy Funds
After WWII, the Japanese economy began what is sometimes referred to as the ?Economic Miracle?, a three-decade long period of growth and prosperity. Japanese firms and their management teams were studied around the world as the model of efficiency and an example for all companies and leaders to strive for. In 1989, a bubble in real estate fueled by speculators burst, and the Japanese markets crashed. Since then, the Japanese economy has been in a virtual standstill with more than two decades of stagnant growth and a deflationary environment.
2014-03-18 00:00:00 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn
Stocks were buffeted last week on the outcome in Ukraine (well founded), growing concern that the world does not know what happened to that missing Malaysian airliner, and of course, the ever-present worries about the global economy - especially in light of renewed concern over China, both its economy and its banking system.
2014-03-17 00:00:00 Restoring the "Virtuous Cycle" of Economic Growth by John Hussman of Hussman Funds
The so-called ?dual mandate? of the Federal Reserve does not ask the Fed to manage short-run or even cyclical fluctuations in the economy. Instead ? whether one believes that the goals of that mandate are achievable or not ? it asks the Fed to ?maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.?
2014-03-17 00:00:00 Frontier Markets Find Footing by Mark Mobius of Franklin Templeton
Frontier markets remain in focus for the Templeton Emerging Markets Group in 2014, and my team and I have spent the early part of the year exploring potential investment opportunities in a number of them.
2014-03-17 00:00:00 Market Outlook by Scotty George of Alexander Capital
What's another 200 point down day (Dow) when you're having fun? The violent and excessive overreactions of the week prior were added to by Asia and Europe on Thursday/Friday past, just for good measure.
2014-03-17 00:00:00 Frontier Markets: Weighing the Risks by Nathan Rowader of Forward Investing
Why would investors even think about investing in fledgling, so-called frontier economies half a world away? The quick answer is that some of the best-performing stock markets in the world can be found in places like Kenya, Bulgaria and Argentina. Annual equity returns topped 40% in all three countries in 2013 while a number of other frontier markets (FMs), including Romania, Serbia and Nigeria, experienced annual returns ranging from 25% to 35%. Although past performance is not a guarantee of future results, investors in search of portfolio growth and diversification are taking note.
2014-03-15 00:00:00 Follow the Money to Asia's Tech Hub by Frank Holmes of U.S. Global Investors
Chinas slower economic data points and a surplus in copper and iron ore drove many commodities lower this week, while gold rose. In the short term, until the copper and iron ore surplus is liquidated, or absorbed at a slower pace, the base metals market will likely be sloppy. As the second-largest economy in the world and a huge driver of commodities demand, its not surprising China provoked such a significant response from world markets. Interestingly, most of the media thought it was geopolitical fears from Ukraine that chopped up the market and lifted gold.
2014-03-14 00:00:00 An Exhaustive Debate by Colin Dishington of Matthews Asia
Australia, which is among the largest polluters per capita in the developed world, is exploring ways to reduce its greenhouse gas emissions and has set a target for reducing emissions at 5% below 2000 levels by 2020. One of its current initiatives, the carbon pricing mechanism often referred to as the carbon tax requires polluters to pay an amount proportional to the carbon dioxide equivalent emitted during a given year.
2014-03-14 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust
Global trade negotiations have stalled; This is a delicate time for Chinese finance; Where will Europes growth come from?
2014-03-13 00:00:00 Emerging Markets: Will Ukraine fallout become contagious? by Jeff Hussey of Russell Investments
Jeff Hussey, global CIO, outlines Russell Investments? views on the conflict in Ukraine and how it might impact the markets.
2014-03-10 00:00:00 Earning Estimates Plunging Around The World by of GaveKal Capital
Earnings estimates (and sales estimates to an extent) have taken a beating over the past three months. On average, EPS growth estimates are down 5.3% for the next fiscal year during this time. Not a single industry group out of the 24 MSCI classifications have seen their earning estimates rise and only four industries have seen their sales growth estimate increase.
2014-03-07 00:00:00 Making Green from Gold, Palladium and Pollution by Frank Holmes of U.S. Global Investors
Gold is coming back with a vengeance, experiencing a clear recovery and grabbing the attention of market cynics. Analysts from Noruma Securities even upgraded its outlook for gold, expecting bullion to climb over the next three years, according to Barron's.
2014-03-05 00:00:00 2014: A Transition Year - Back to Fundamentals by Lorenzo Pagani of PIMCO
The past several years have seen multiple regime changes in financial markets in Europe, each dominated by different factors and requiring a distinct approach to fixed income investing. As spreads tighten to pre-2008 levels, it is now time to ask whether a shift in investment style is due. Macroeconomic developments and inflation expectations are likely to be key determining factors in whether 2014 will be a good year for European bond investors.
2014-03-05 00:00:00 The Renminbi's New Normal by Teresa Kong of Matthews Asia
The gyrations in Chinese money markets in the last few weeks have caused much alarm in the financial press. The moves in these markets are not only inline, but healthy for an economy looking to increase the role of the market in allocating resources. Those who believe these moves indicate financial stress, or draw parallels between the recent volatility and that which preceded the subprime crisis in the U.S., might be looking through the wrong end of the telescope.
2014-03-05 00:00:00 The Renminbi's New Normal by Teresa Kong of Matthews Asia
The gyrations in Chinese money markets in the last few weeks have caused much alarm in the financial press. The moves in these markets are not only inline, but healthy for an economy looking to increase the role of the market in allocating resources. Those who believe these moves indicate financial stress, or draw parallels between the recent volatility and that which preceded the subprime crisis in the U.S., might be looking through the wrong end of the telescope.
2014-03-01 00:00:00 Black Swans and Endogenous Uncertainty by John Mauldin of Millennium Wave Advisors
John is in Florida and feeling a bit under the weather, so this week were bringing back one of his most popular letters, from December 2007. In the letter he discusses the work of Professor Graciela Chichilnisky of Columbia University, one of whose key insights is that the greater the number of connections within an economic network, the more the system is at risk. Given the current macroeconomic environment, it is important to remind ourselves of how complacent we were back in 2007 and how it all fell apart so quickly, just as John outlined in this rather prescient piece.
2014-02-28 00:00:00 Emerging-Market Risk and Reward by Nouriel Roubini of Project Syndicate
Industrialization, urbanization, and the rise of a middle-class consumer society were supposed to boost emerging-market countries' long-term economic and sociopolitical stability. But in many countries recently wracked by political unrest, it is the urban middle classes that have been manning the barricades.
2014-02-28 00:00:00 Looking Beyond Politics in Thailand by Mark Mobius of Franklin Templeton
Throughout its history, Thailand has been subject to periods of political instability that have at times given cause for concern among investors. In the past few months, investor sentiment has reflected the political uncertainty, putting Thailand in the news.
2014-02-28 00:00:00 Korea's Changing Consumer Patterns by Michael Han of Matthews Asia
Following a recent research trip to Korea, I was able to spend some time there with my family. Three consecutive weeks away afforded me the opportunity to observe changes in spending patterns among Korean consumers as well as the improving competitiveness of the country?s service industries.
2014-02-26 00:00:00 What Columbus Missed: Royce Rediscovers India by David Nadel of The Royce Funds
In 1492, Italian explorer Christopher Columbus set sail to discover India. He missed his mark, however, landing in America instead. The rest, as they say, is history-with the exception that more than 500 years later India is still worthy of discovery for many Western investors.
2014-02-25 00:00:00 The Return of Japan by Bill O'Grady of Confluence Investment Management
Two weeks ago, we discussed Germany?s apparent early steps to return to regional power status. In this week?s report, we will examine Japan?s steady evolution to regional power status.
2014-02-22 00:00:00 Going for the Gold by Frank Holmes of U.S. Global Investors
Everyone wants the gold. Around the world, athletes train for years to compete for a gold medal. In Hong Kong and China, the Love Trade seeks gold coins, bars and jewelry.
2014-02-20 00:00:00 Abenomics is Failing on Multiple Fronts by of GaveKal Capital
With each passing month it is becoming more clear that Abenomics is, at least so far, failing to meet one of its critical goals, which is to stimulate exports and bring the country back to a trade surplus. Indeed, the latest trade statistics revealed the largest single month trade deficit ever.
2014-02-20 00:00:00 Where the Frontier Lies by Robert Harvey of Matthews Asia
My last research trip to Asia included eight flights and nearly 50 grueling hours in the air. During this time, I had the opportunity to ponder a question I am frequently asked, ?How do you define a frontier market??
2014-02-20 00:00:00 American Industrial Renaissance Revisited by Richard Bernstein of Richard Bernstein Advisors
We first wrote about The "American Industrial Renaissance" in 2012, and it remains one of our favorite investment themes. We continue to implement this theme through small US-centric industrial companies and small financial institutions that lend to public and private industrial firms. It remains unlikely that the United States will be the manufacturing powerhouse that it was during the 1950s and 1960s, but many factors are suggesting that the US industrial sector will continue to gain market share.
2014-02-20 00:00:00 The State of International Small-Cap by Francis Gannon of The Royce Funds
While some argue that domestic small-cap leadership in 2013 was a result of its heavy exposure to companies that tend to generate most of their income domestically, others contest that this greater focus on the U.S. may mean missing out on the benefits of faster-growing foreign economies. We, on the other hand, choose to focus our attentions on individual companies, particularly those in more cyclical areas of the market that are more closely tied to the global economy.
2014-02-18 00:00:00 Global Equity Income Update by Job Curtis (Article)
Job Curtis discusses recent market turbulence, the positioning of the Global Equity Income Fund and the outlook for dividends. Three main reasons for market turbulence include US tapering, capital outflows from emerging markets and fears of deflation in Europe. That said, European companies and many European economies remain strong. We see value outside the US from a dividend yield perspective so the Global Equity Income Fund is more oriented towards overseas markets, including Europe, Asia Pacific and the UK.
2014-02-18 00:00:00 Stocks for 2014: Growth and Income For Total Return - Part 3 by Chuck Carnevale of F.A.S.T. Graphs
When investing in common stocks, there is no one strategy that fits all investors. Some investors are focused on investing for income, some for capital appreciation and others for various combinations of both. Additionally, there is the issue of risk tolerance. Some investors are willing and capable of assuming greater risk if they believe it will lead to greater returns, while others are more risk adverse. These are just but a few of the many variations that apply to the individual investors own unique goals and characteristics.
2014-02-18 00:00:00 After a Rocky 2013, What's in Store for Asia This Year? by Brent Bates of Invesco Blog
Overall, 2013 wasnt the best year for Asian markets, however there are several trends emerging that we believe will be good for the region this year.
2014-02-14 00:00:00 Turkey, Doves, Hawks and Owls by Robert Horrocks of Matthews Asia
The current market sentiment is something of an albatross around Asian economic and market performance. Whilst it is never safe to assume the currency speculators have gone away, the regions economies have put in enough hard work over the previous decades to earn some goodwill.
2014-02-11 00:00:00 ?Hot? Money?s Fast Exit Cools Emerging Markets by of Knowledge @ Wharton
Capital flight from emerging markets has been accelerating in recent weeks ($6 billion alone in the week ending February 5). Turkey is the poster child, but the exodus is also happening in India, Indonesia, Brazil, South Africa and others ? mostly from equity markets. This ?hot money? is moving out over concerns that asset bubbles have built up, and that emerging market economic growth is now slowing. The slowdown is partly a result of tighter money in the wake of the Fed?s tapering plans and a decelerating economy in China, many believe. To better understand the risks to the global financial
2014-02-10 00:00:00 Emerging Markets Equity Commentary - December 2013 by Team of Thomas White International
Emerging market equity prices saw a modest correction for the second successive month in December, as investors remained cautious about the outlook for some of the emerging economies. Select countries such as Thailand in Asia and Turkey in Europe continue to face difficult political environments, with large demonstrations against the governments. Their currencies have reacted negatively to the latest developments, making investors fearful of a repeat of the volatile market movements seen during the third quarter of 2013.
2014-02-10 00:00:00 What Would a Stronger Dollar Mean for Global Markets? by Borge Endresen, Brent Bates of Invesco
As the world watches the progress of the US Federal Reserves tapering program, and anticipates the strengthening of the US dollar, Were often asked how this affects our view of international markets and risk. The short answer is that it doesnt. Were long-term, bottom-up stock pickers , so we;re primarily concerned with currency impacts on a company-by-company basis. However, there are some broad trends that are worth noting.
2014-02-10 00:00:00 What Would a Stronger Dollar Mean for Global Markets? by Borge Endresen, Brent Bates of Invesco
As the world watches the progress of the US Federal Reserves (Feds) tapering program, and anticipates the strengthening of the US dollar, were often asked how this affects our view of the international market and risk. The short answer is that it doesnt. Were long-term, bottom-up stock pickers, so were primarily concerned with currency impacts on a company-by-company basis. However, there are some broad trends that are worth noting.
2014-02-09 00:00:00 Global Economic Overview - December 2013 by Team of Thomas White International
The global economic outlook has turned brighter as several major economies are improving. Both business and consumer sentiment have become healthier across most regions, as the policy uncertainties that plagued several countries last year have faded. The U.S. economy is expected to accelerate further in 2014, while Europe and Japan are also likely to see faster growth.
2014-02-07 00:00:00 Two Questions for Japan Inc. by Kara Yoon of Matthews Asia
During my last research trip in November, we visited mostly consumer-facing companies in Japan where we took the opportunity to pose two key questions to the management teams we met. The first was-"Are you planning to increase prices for products or services after Japans consumption tax hike (scheduled for April)?" And secondly: "Will you raise employee wages?"
2014-02-06 00:00:00 Will China Overtake the U.S. as World Leader and Reserve Currency? by Dawn Bennett of Bennett Group Financial Services
Will China Overtake the US as World Leader and Reserve Currency? This has not happened yet, but it may not be far down the road if the US does not get its fiscal house in order. The United States has been the biggest national economy since 1871, but more than half of Americans have slapped an expiration date on its global reign.
2014-02-06 00:00:00 Emerging Market Woes abd Fed Tapering Equals Stocks Plunge by Gary Halbert of Halbert Wealth Management
January saw US stocks record their first losing month since last August. After reaching new record highs at the end of December, the Dow Jones shed almost 1,000 points in the last half of the month and the decline continues. Analysts attributed the sell-off in large part due to troubling news from several emerging nations, in particular to the so-called "Fragile Five" - Turkey, India, Brazil, Indonesia and South Africa.
2014-02-05 00:00:00 Emerald Economic Commentary by Team of Emerald Allocation Strategies
As Yogi Berra once said, "You got to be careful if you don?t know where you?re going, because you might not get there." As we look back on 2013 and look ahead to 2014,we want to share our thoughts on the road traveled and more importantly, the possible road ahead.
2014-02-04 00:00:00 Crisis in Ukraine by Bill O'Grady of Confluence Investment Management
Since November, Ukraine has experienced widespread civil unrest. In late November, Ukrainian President Yanukovych decided not to join an EU-sponsored trade pact. This led to protests from Ukrainians who desired closer relations with Europe. In this report, we will begin by discussing the geopolitics of the nations involved, examining how nations have adjusted their policies over time to changing conditions. We will analyze the risks to the region from current unrest, including a look at the impact on emerging markets. As always, we will conclude with potential market ramifications.
2014-02-03 00:00:00 10 Steps Forward, 1 Step Back! Comments on January Stock Market by David Edwards of Heron Financial Group
US stocks as measured by the S&P 500 delivered a phenomenal 32.4% return in 2013. That was the 6th best year for US stocks since 1940. In January, US stocks fell 3.5%. We dont watch business news anymore, but judging from an increased volume of phone calls from clients, we presume that CNBC, Fox Business, CNN and MSNBC have categorized this modest decline as "an apocalypse." Our "dashboard" shows return numbers for US and International stock markets, commodities, currencies and bond yields. A lot of red YTD 2014, but all green at the end of 2013.
2014-01-31 00:00:00 Thrift, Thrift, Burning Bright by Christine Hurtsellers, Matt Toms of ING Investment Management
Does the title sound familiar? Think feral instead of frugal, and William Blakes "Tyger, Tyger, burning bright" may start to flicker between the synapses of memory and an English lit class you once soldiered through. But even if you havent read "The Tyger", its theme is aptly captured in the opening line and its image of a big flaming kitty cat. Essentially, Blake saw reality in duality: To appreciate the ferocious feline in all its glory is to come face to face with the same force that created "The Lamb", another entry in the poets Songs of Innocence and of Experience.
2014-01-31 00:00:00 A Surprising Gift for Chinese New Year by Sherwood Zhang of Matthews Asia
Beijing-based China Credit Trust Company, a firm that operates as a non-banking financial institution in China, announced this week it reached an agreement to restructure a risky high-yield product that had earlier ignited worries over the health of Chinas trust industry. Just in time for the Lunar New Year, investors in the troubled trust may receive a big (metaphorical) red envelope-a monetary gift traditionally given during Chinese New Year or other special occasions-or at least avoid a financial hit.
2014-01-31 00:00:00 Not All Emerging Markets Are Created Equal by Robert McConnaughey of Columbia Management
Emerging markets (EM) is a term given to a universe of countries that is extremely diverse across a wide number of variables including geography, levels of industrialization and political systems. Despite this diversity, emerging markets are often discussed as if they are a homogenous block, particularly in the context of broad asset allocation decision making. We think thats a mistake. Instead, we see opportunity from applying a more bottom-up approach to country, industry and security selection amidst growing dispersion in outcomes across the emerging world.
2014-01-28 00:00:00 The TTIP and the TPP by Bill O'Grady of Confluence Investment Management
The Transatlantic Trade and Investment Partnership (TTIP) is a trade and investment treaty being negotiated between the European Union (EU) and the U.S. The Trans-Pacific Partnership (TPP) is a similar pact between the U.S. and various Pacific Rim nations. We will examine overall details of each, focusing on how theyre different from traditional trade agreements. From there, we will present an analysis of the controversy surrounding the proposals, followed by a look at the geopolitical aims and likelihood that these treaties will be enacted. We conclude with potential market ramificatio
2014-01-27 00:00:00 Hasenstab: Standing One's Ground by Michael Hasenstab of Franklin Templeton
When the masses are against you, its hard to stand your ground. Going against the crowd is familiar turf for Michael Hasenstab, who manages Templeton Global Bond Fund and co-manages Templeton Global Balanced Fund, and certainly knows the virtue of patience. He has staunchly defended his investment theses over the years, tuning out the naysayers and market noise time and again.
2014-01-25 00:00:00 Why the Recent Lift in Junior Miners Will Likely Continue by Frank Holmes of U.S. Global Investors
Junior venture companies in Canada are finally seeing a significant lift. In early January, the S&P/TSX Venture Composite Index rose above the 200-day moving average for the first time in three years. The index is also very close to experiencing a golden cross, which is when the shorter-term 50-day moving average crosses above the 200-day moving average. Historically, traders see this cross as extremely bullish.
2014-01-24 00:00:00 Stocks for 2014: Growth and Income For Total Return Part 3 by Chuck Carnevale of F.A.S.T. Graphs
When investing in common stocks, there is no one strategy that fits all investors. Some investors are focused on investing for income, some for capital appreciation and others for various combinations of both. Additionally, there is the issue of risk tolerance. Some investors are willing and capable of assuming greater risk if they believe it will lead to greater returns, while others are more risk adverse. These are just but a few of the many variations that apply to the individual investors own unique goals and characteristics.
2014-01-24 00:00:00 India's Rising Aspirations by Sudarshan Murthy of Matthews Asia
Indias newly formed Aam Aadmi Party (AAP) had a spectacular debut in recent state elections. Its leader became the chief minister of the state of Delhi. The election results seemed to indicate a fundamental change-voters now perceive politicians not as "rulers," but as professionals with a limited mandate to serve. The AAP ran on an anti-corruption agenda, and Delhis new chief minister seems to "walk the walk." He uses public transport to commute to work, a refreshing change from the typical politician in India who is usually seen riding in a convoy of vehicles.
2014-01-23 00:00:00 What's Your 2014 Market View? by Robert Horrocks of Matthews Asia
U.S. monetary policy seems likely to continue occupying center stage as people fret about interest rates. Last year was a somewhat instructive year for monetary policy theory in that it seemed to show that policies can be effective even when interest rates have no further room to be lowered. Can the nominal GDP in the U.S. grow at faster rates in 2014, and what would that mean for Asia? This month Matthews Asias Chief Investment Officer, Robert Horrocks, offers his insights into how reforms planned for China could be a key factor to change and what could lie ahead for the region overall
2014-01-22 00:00:00 What to Expect in 2014 (And Beyond) by Jack Rivkin of Altegris
Each year, I take Alfred Lord Tennysons advice and "ring out the old, ring in the new" by creating a list of expectations about the markets. My list involves events that the average investor thinks have only a one-in-three-chance of happening, but which I believe have more than a 50% chance of occurring. If this approach sounds familiar, it should. Its modeled after Byron Wiens annual list of "surprises." Like his, my expectations are designed to provoke thought and discussion.
2014-01-21 00:00:00 Albert Edwards and Dylan Grice: Bearish Forecasts from Two Top Strategists by Robert Huebscher (Article)
Its been nearly 18 years since Albert Edwards forecast an "ice age" in which bonds would outperform equities. Hes been right until just recently, when cumulative returns on the two classes converged. But Edwards insists that his thesis is still accurate - deflation will be the force to propel bonds over stocks, he says. Dylan Grice, meanwhile, warns that the markets operate on an unstable equilibrium that could devolve into apocalyptic conditions.
2014-01-21 00:00:00 Superstition Ain't the Way by John Hussman of Hussman Funds
When you believe in things that you dont understand, then you suffer.
2014-01-21 00:00:00 Stocks 2014: Investing for Growth - The Power and Protection of High Compounding Earnings Growth by Chuck Carnevale of F.A.S.T. Graphs
As I become more mature (translate: gotten older), my investment philosophy has slowly evolved into a more conservative posture. When I was a younger investor I felt I had time on my side, and therefore, was willing to take on greater risk as long as I believed that greater rewards could follow. In other words, if I made a mistake by investing in an aggressive and more risky growth stock that went badly, I felt I had adequate time to overcome or recover my losses. Consequently, as a younger investor I relished a good growth stock.
2014-01-21 00:00:00 Emerging Markets 2014 Outlook: Shaping the Next Decade by Mark Mobius of Franklin Templeton
As we embark upon a new year, the Templeton Emerging Markets Group believes 2014 could be an important year for many emerging markets, possibly establishing trends that could play out through much of the remainder of the decade. In particular, Chinese government reform initiatives announced in late 2013 could have far-reaching significance. And, major elections in a number of countries in 2014 could bring dramatic (or not-so-dramatic) changes. Here are a few themes and countries weve got our eye on in the new year.
2014-01-17 00:00:00 Asia's Evolving Science and Tech Space by Michael Oh of Matthews Asia
The main growth drivers of Asias science and technology industries are changing to become more domestically driven and service-oriented. These changes are happening as rising disposable income enables more Asian consumers to embrace new technologies.
2014-01-17 00:00:00 The Profits Bubble by Chris Brightman of Research Affiliates
Profits are dangerously elevated by all reasonable measures. S&P 500 Index real earnings per share are far above their long-term historical trend. Industry profit margins are at or near all-time highs. Corporate profits, both as a percentage of GDP and relative to labor income, are at or near record levels. The dramatic rise in income inequality is a direct consequence of this spectacular reallocation of income to capital and away from labor.
2014-01-16 00:00:00 Keep Optimistic and Carry On by Scott Minerd of Guggenheim Partners
This is likely to be another good year for risk-on investing, as an improving economic outlook supports stocks and bonds in an environment marked by less volatility than 2013.
2014-01-14 00:00:00 The Great Man or the Great Wave by Bill O'Grady of Confluence Investment Management
One of the seminal debates among historians is how the process of history develops, characterized as the "great man versus the great wave" debate. In this report, we will begin by developing this debate with relation to Americas superpower role; specifically, we will examine whether the U.S. is struggling with the superpower role because of a lack of leadership (a great man position) or because the wave of history is aligned against the U.S. keeping that role. As always, we will conclude with potential market ramifications.
2014-01-13 00:00:00 Tocqueville Gold Strategy Investor Letter Year End 2013 by John Hathaway of Tocqueville Asset Management
John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), remarks in his latest quarterly letter that "Despite the painful decline in gold and gold shares that persisted throughout the entire year, we believe that the fundamental case for both remains strong." Hathaway writes that "the bullion market has been pressured all year by an artificial supply of paper gold with little or no connection to the underlying physical.
2014-01-10 00:00:00 2014 Economic and Investment Outlook by Team of Ivy Investment Management Company
Although the December 2013 U.S. budget pact between House and Senate negotiators was a welcome development, partisan battles over government spending still are possible in 2014. The agreement ends a three-year budget fight and sets government spending through fall 2015, but it does not eliminate the need to raise the nations borrowing limit - the "debt ceiling."
2014-01-10 00:00:00 Hasenstab: Fed Tapering Was Inevitable by Michael Hasenstab of Franklin Templeton
The US Federal Reserve (Fed) announced its decision to reduce its $85 billion monthly asset purchase program by $10 billion starting in January 2014. What might the eventual end of the Feds policy of aggressive money printing mean for fixed-income investors? Michael Hasenstab, Ph.D, executive vice president, chief investment officer, Global Bonds, Franklin Templeton Fixed Income Group, believes theres no reason for investors to panic. He outlines why he thinks thats the case, and where on the map hes spotting fixed income opportunities.
2014-01-10 00:00:00 Exploring Ceylon Tea Country by Jodi Morris of Matthews Asia
Riding by train through the Sri Lankan highlands recently, I found it difficult not to be mesmerized by the views of mountains blanketed in tea plantings and cool mist. My days spent exploring Sri Lankas mountainous interior were among my favorite as a first-time visitor to the country.
2014-01-10 00:00:00 Continuing a Winning Formula for 2014 by Frank Holmes of U.S. Global Investors
We believe there?s a way that increases the odds of winning. It?s by combining a bottom-up approach with a top-down strategy: Find great, fast-growing and shareholder-focused companies and focus on the best stocks in the sectors experiencing positive momentum.
2014-01-09 00:00:00 The U.S. Begins an (Un)employment Experiment by Sam Wardwell of Pioneer Investments
Extended unemployment benefits stopped for 1.3 million people at year-end. This doesnt change their employment status...they just stop getting unemployment compensation. Extended benefits (of up to 99 weeks) was part of the recession-fighting fiscal stimulus package. A question was: did this create a dis-incentive to find a job (aka "funemployment").
2014-01-07 00:00:00 Emerging Markets 2014 Outlook: Shaping the Next Decade by Mark Mobius of Franklin Templeton
As we embark upon a new year, the Templeton Emerging Markets Group believes 2014 could be an important year for many emerging markets, possibly establishing trends that could play out through much of the remainder of the decade. In particular, Chinese government reform initiatives announced in late 2013 could have far-reaching significance. And, major elections in a number of countries in 2014 could bring dramatic (or not-so-dramatic) changes. Here are a few themes and countries weve got our eye on in the new year.
2014-01-03 00:00:00 A More Market-Friendly China by Henry Zhang of Matthews Asia
My last visit to Beijing happened to coincide with the Communist Partys Third Plenum Meeting. General business sentiment was just as upbeat as it had been earlier last autumn. But through my discussions with different businesspeople, I came away with a distinct new optimism over the leaderships more market-oriented stance on policies.
2014-01-02 00:00:00 The World Economy's Shifting Challenges by George Soros of Project Syndicate
As 2013 comes to a close, efforts to revive growth in the worlds most influential economies are exerting competing pressures on the global economy. Perhaps not surprisingly, while Europe and the US will continue to play an important global role, developments in Asia will determine the worldwide outlook in 2014 and beyond.
2013-12-30 00:00:00 Predictions for the 2014 U.S. Financial Markets by Dawn Bennett of Bennett Group Financial Services
Ive had so many phenomenal and diverse guests on my syndicated radio show, Financial Myth Busting, this year: Steve Forbes, Mort Zuckerman, David Stockman, Michael Belkin, David Walker, Dr. Ben Carson, Marc Faber, and even Ted Nugent. This is a very eclectic group, but they all have certain opinions in common. They all share the same concerns that the U.S. economic growth remains anemic and the continued economic instability and political deadlock along with business communitys mistrust of the U.S. government will continue to destroy Americas bottom line in the future.
2013-12-30 00:00:00 What Does US Tapering Mean for Asia? by Paul Chan of Invesco Blog
The US Federal Reserve (Fed) took its first step toward unwinding its unprecedented monetary stimulus. Beginning in January 2014, the Fed will reduce monthly asset purchases by $10 billion to $75 billion. The scale of the tapering was very much in line with market expectation. While timing may have surprised some investors, the market had already priced in the Feds imminent move.
2013-12-27 00:00:00 Year of Turmoil for China's Health Care by Hardy Zhu of Matthews Asia
2013 has been an eventful year for Chinas health care industry. There were several investigations into allegations of corruption and bribe-taking by doctors.
2013-12-26 00:00:00 Newsletter by Harold Evensky of Evensky & Katz
I admit it, I do occasionally pick on Money Magazine and other consumer financial publications, but as Ive written in the past, for the most part, Money does a great job of educating consumers. Its story on Lessons from the Crash "Lehman Brothers collapse in September 2008 sent stocks on a terrifying ride. A year-by-year look back reveals five key takeaways you need to heed today" is an excellent example. Here are Moneys "Lessons."
2013-12-24 00:00:00 The Price America Pays for Global Leadership by Bob Veres (Article)
Americas political debates inevitably default to finding ways to contain our federal deficits, and our investment debates focus on whether were facing a secular bear or bull market - and how to maneuver within that environment. I had never imagined that these two debates could be related until I heard a presentation by Bill OGrady, of Confluence Investment Management in St. Louis, MO at the Insiders Forum conference in Dallas.
2013-12-24 00:00:00 A Surprising Way to Participate in Today's Tech Boom by Frank Holmes of U.S. Global Investors
If I asked you to name the biggest online shopping day of the year, what would you guess?
2013-12-23 00:00:00 China's Consumer Stocks: Opportunities Despite Slower Growth by Richard Flax of PIMCO
A weaker macro environment and curbs on spending by government bureaucrats have hit a range of consumer businesses and, in some cases, forced a reassessment of expansion plans. While Chinese consumption may be challenged in the near term, we think the impact will be felt most in the retail sector where slowing demand is compounded by oversupply. We see opportunity in other sectors that benefit from secular demand growth and constrained supply or strong brands, notably casinos and luxury sectors.
2013-12-20 00:00:00 Let's Get Physical: Gold Bullion and Bitcoin by John Hathaway of Tocqueville Asset Management
John Hathaway, manager of the Tocqueville Gold Fund (TGLDX), discusses in his latest insights piece the disparity in price direction between gold bullion and Bitcoin, in spite of the strikingly similar rationale for holding the two. He notes that the "Bitcoin-Gold incongruity is explained by the fact that financial engineers have not yet discovered a way to collateralize bitcoins for leveraged trades."
2013-12-20 00:00:00 Celebrating Asia's Growth Past and Present by Taizo Ishida, Mark Headley of Matthews Asia
Today, Matthews Asia celebrates 10 remarkable years that have passed since we launched our Asia Growth strategy to U.S. investors. During this time, the region has evolved in many significant ways. In the early 2000s, only the "Asian Tiger" economies had managed to reach GDP per capita levels considered the tipping point for consumption growth. More recently, consumption has been on the rise in many of the regions economies, laying the foundation for Asias ongoing prosperity.
2013-12-20 00:00:00 A Surprising Way to Participate in Today's Tech Boom by Frank Holmes of U.S. Global Investors
China has become one of the best consumption stories out there, and looking over the next few years, local technology companies are almost certain to benefit. So while many U.S. investors are getting excited about the growing number of initial public offerings in the tech sector, they would be remiss if they didnt look beyond Silicon Valley.
2013-12-19 00:00:00 Georgia on My Mind by Mark Mobius of Franklin Templeton
My team and I recently traveled to Georgia, a small country in the Caucasus Mountains straddling the border between Europe and Asia. Why are we interested in Georgia? One word: reform. Georgia, which can be considered a frontier market, is on the cusp of burgeoning change.
2013-12-18 00:00:00 PIMCO's Cyclical Outlook for Asia: Growth Is Stabilizing but Not Stellar by Ramin Toloui, Tomoya Masanao, Robert Mead of PIMCO
In China, near-term economic performance will be dominated by the dialing back and forth of credit conditions by policymakers, while long-term reform progresses incrementally. Japans GDP growth will slow in 2014 due to a consumption tax hike but will still be above the countrys potential growth as it is assisted by reflationary policies. The pace of Australias growth will slow due to weakness in manufacturing and mining, reflecting tempered growth in China.
2013-12-17 00:00:00 How a Simple Sandwich Got a Top Prospects Attention by Dan Richards (Article)
Many advisors generously support charities and good causes in their communities and around the world. Heres how to communicate that support to clients.
2013-12-17 00:00:00 The 2014 Geopolitical Outlook by Bill O'Grady of Confluence Investment Management
As is our custom, we close out the current year with our outlook for the next one. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international situation in the upcoming year. It is not designed to be exhaustive; instead, it focuses on the "big picture" conditions that we believe will affect policy and markets going forward. They are listed in order of importance.
2013-12-16 00:00:00 The World We Live In by Michael Kayes of Willingdon Wealth Management
For me, the final month of the year has always been a time to reflect upon the past as well as plan for the future. Analyzing the year soon to pass provides a valuable perspective with which to evaluate the important issues that will impact our country and economy going forward. In this context, 2013 sure has been a memorable year highlighted by horrific natural disasters, the deaths of Margaret Thatcher and Nelson Mandela, and on the lighter side, the unforgettable ending to perhaps the greatest Iron Bowl ever played.
2013-12-13 00:00:00 Disruptive Innovations in Indian Politics by Sunil Asnani of Matthews Asia
The sweeping victories for Indias pro-business opposition party, the Bharatiya Janata Party (BJP), in recent state elections were largely expected. But more stunning, to say the least, were unexpectedly strong gains in Delhi by a nascent, novice and underfunded political party known as the Aam Aadmi Party, or Common Mans Party.
2013-12-06 00:00:00 Vibrant Vietnam by Lydia So of Matthews Asia
I recently made my first visit to Vietnam and spent several days in Ho Chi Minh City. Considered by the investment community to be a frontier market, Vietnam has a low per capita income (approximately US$1,600), a relatively young population and less mature capital markets.
2013-12-05 00:00:00 A Synchronous Expansion by Scott Minerd of Guggenheim Partners
Major developed economies are all contributing to global economic growth, and this improving fundamental picture, coupled with ongoing monetary accommodation, bode well for risk assets.
2013-12-04 00:00:00 Gold, What Is It Good for? by Miguel Perez-Santalla of BullionVault
Absolutely nothing! Well, except 5,000 years of value exchange, non-correlation, and preserving wealth...The current market environment has led many in the press to question golds value as an investment or an asset class, writes Miguel Perez-Santalla at BullionVault.
2013-12-04 00:00:00 The Eastern Lust for Gold by Peter Schiff of Euro Pacific Precious Metals
Having replaced savings with debt on both the national and individual levels, I think its well past time for Westerners to take a few lessons from our creditors in the East. Many Americans consider gold a "barbarous relic," but in Asia, the yellow metal remains the bedrock of individual savings plans. This means that either greater than half of the worlds population are barbarians, or theyve held onto an important tradition that our culture has forgotten.
2013-12-04 00:00:00 Patience in Asia by Mark Mobius of Franklin Templeton
Investing in a multitude of markets and companies as we do within the Templeton Emerging Markets Group means that at any given point in time it may appear to some that they are underperforming or outperforming any particular benchmark index or market. Such is the nature of global financial markets. Of course, wed like all of our investments to go straight up, but at the same time continually like to find new bargains for investors.
2013-12-04 00:00:00 Emerging Asia Pacific: Regional Economic Review - Q3 2013 by Team of Thomas White International
The second half of 2013 has posed significant challenges to growth in major Emerging Asia Pacific economies. Almost all emerging Asia Pacific economies showed signs of strain arising from stubborn inflation, higher interest rates, slower consumer spending and lukewarm exports.
2013-12-03 00:00:00 U.S. Economy Slowly Gaining Traction - What's Ahead for Year-End? by Sam Wardwell of Pioneer Investments
As we enter the final month of 2013, my themes of the last several weeks continue - the capital markets, in general, remain quiet and U.S. economic data, while mixed, shows signs of steady improvement. This week, Ill start by looking forward to some news well be watching as the year closes out...
2013-11-29 00:00:00 ING Fixed Income Perspectives - November 2013 by Christine Hurtsellers and Matt Toms of ING Investement Management
Given rich valuations globally, we remain broadly neutral on interest rate risk with the exception of Japan.
2013-11-29 00:00:00 From the Taj Mahal to Westminster Abbey: Notes from a Global Investor by Frank Holmes of U.S. Global Investors
I recently returned from India, a nation where an incredible 600 million people are under the age of 25. That?s nearly double the entire population of the U.S.
2013-11-27 00:00:00 Emerging Markets Equity Commentary - October 2013 by Team of Thomas White International
Equities Gain as Currencies Remain Stable and Data Trends Show Positive Signs.
2013-11-27 00:00:00 International Equity Commentary - October 2013 by Team of Thomas White International
Equities Advance as Global Manufacturing and Services Activity Gains Momentum
2013-11-25 00:00:00 Recent Economic Trends Help Make Korea a Hidden Gem in Asia by Paul Chan and Simon Jeong of Invesco Blog
After more than two decades of financial setbacks, recent macroeconomic data is helping Korea overcome the negative economic stigma associated with its economy and equity markets.
2013-11-22 00:00:00 Understanding the Rise of China by Frank Holmes of U.S. Global Investors
If the sweeping economic reforms planned by Chinese leaders during the Third Plenum can be our guide, it looks to be a promising decade for global investors. Details released this week confirmed President Xi Jinpings concerted efforts to move China toward a market-based economy that mirrors the West.
2013-11-21 00:00:00 Developed Asia Pacific: Regional Economic Review Q3 2013 by Team of Thomas White International
Developed Asia Pacific economies were back on their feet during the second quarter of 2013 as economic growth gained momentum, inflation fell mildly and exports climbed strongly. Most developed countries in the region such as Japan, Australia, and New Zealand reported a sharp positive swing in consumer and business confidence. Predominantly expansionary monetary and fiscal policies also helped keep the pace of economic recovery.
2013-11-21 00:00:00 Some Small-Caps Are More Global Than Others by Francis Gannon of The Royce Funds
How much of a contribution have overseas revenues made to this years dynamic domestic small-cap rally? Part of the answer lies in where portfolios invest and where they do not. Portfolio Manager and Principal Francis Gannon notes the emerging strength shown by those more economically sensitive sectors that are closely tied to global economic activity.
2013-11-20 00:00:00 Entrepreneurship in Asia by Jerry Shih of Matthews Asia
Using Silicon Valley as a yardstick to measure the success of Asias entrepreneurs is an interesting exercise. But it offers little insight into the development of more creative processes in Asia. Many policymakers in the region have declared innovation to be a national, strategic prioritycreating policies aimed at spurring growth to increase R&D expenditure, attract knowledge-intensive foreign direct investment and building more skilled labor pools. This month, Jerry Shih, CFA, takes a look at what changes are occurring around Asia to build more robust start-up ecosystems.
2013-11-19 00:00:00 France and the Iranian Negotiations by Bill O'Grady of Confluence Investment Management
Earlier this month, negotiations between Iran and the P5+1 failed to reach an agreement despite great hopes that one was near. In this report, we will examine the reasons behind French objections to a nuclear deal with Iran. We will begin with an examination of Frances relations with the Middle East, focusing on its relations with Israel. Using this history as a guide, we will analyze why the French scotched the potential agreement. A short discussion will follow of the impact of Frances objection on the evolution of U.S. policy with Iran. As always, we conclude with market ramif
2013-11-15 00:00:00 In the Wake of Disaster by Robert Horrocks of Matthews Asia
As humanitarian organizations scrambled to send relief to the Philippines this week following the countrys battering by Typhoon Haiyan, foreign governments prepared to support the rebuilding and economists looked to assess the tragedys near-term impact.
2013-11-15 00:00:00 Dressed to the Nines with Gold by Frank Holmes of U.S. Global Investors
While paper gold is getting the cold shoulder in the West, the Love Trade buyers in the East are wrapping their arms around all the physical gold they can get their hands on.
2013-11-12 00:00:00 Dream to Outperform the Market by Bill Smead of Smead Capital Management
If you dream about investment market outcomes which are already popular in the marketplace, your dreams can turn into nightmares. The Everly Brothers 1958 hit song, All I have to do is Dream tells us a great deal about the long-term posture of investors in late 2013 and how dreams can turn to nightmares. On the other hand, if you dream about an outcome which most experts arent expecting, the rewards can be explosive.
2013-11-08 00:00:00 Who Needs Gold Really? by Miguel Perez-Santalla, Adrian Ash of BullionVault
Four reasons to waste your time with the deeply historic, deeply human value ascribed to gold...
2013-11-08 00:00:00 Bubbles Without Borders? by Vivek Tanneeru of Matthews Asia
If you are a wealthy person living in Asia, you might be tempted, with good economic reason, to look overseas to diversify your asset base. Overseas markets often offer good diversification as they are typically exposed to different economic cycles and also give exposure to different currencies. But while overseas stocks, bonds and other financial instruments all offer diversification, few asset classes seem to have the same allure as overseas propertythat is, overseas property in the right cities.
2013-11-08 00:00:00 Big Ideas in the Big Easy by Frank Holmes of U.S. Global Investors
This is likely a contrarian view to the folks in the White House, but I think investors benefit from being contrarian and thinking differently. In preparation for my presentations in New Orleans as well as for the Metals & Minerals Investment Conference in San Francisco and the Mines and Money in London in a few weeks, I?ve been pulling together this kind of research that we can all put to use now.
2013-11-05 00:00:00 The Saudi Tribulation by Bill OGrady of Confluence Investment Management
In this report, we will discuss the basic history of U.S. and Saudi relations, focusing on the historical commonality of goals between the two nations. We will detail how the aims of the two nations have diverged since the Cold War ended and use this to examine Americas evolving plans for the Middle East. We will discuss how the evolution of U.S. policy is affecting Saudi Arabia and the pressures these changes are bringing to the kingdom. As always, we will conclude with market ramifications.
2013-11-04 00:00:00 Sovereign Ambitions to Develop Infrastructure Benefit Emerging Asia's Utilities Sector by Raja Mukherji, Emily Au-Yeung of PIMCO
The scope for infrastructure development in emerging Asia is tremendous, and the utilities sector has potential to contribute to and benefit from that growth. In general, we have found that state-owned utilities benefit from a range of operational advantages, partly as a result of the governments vested interest. PIMCOs bottom-up research allows us to analyze evolving company- and sector-specific factors within the greater macroeconomic picture to identify the best investment ideas in Asias utilities sector.
2013-11-01 00:00:00 When Small is Big by Mark Mobius of Franklin Templeton
Theres a popular saying in the US, good things come in small packages, which is generally a statement about gifts of jewelry. My team and I find this saying can apply to the investment world, too, as we often find companies that are small in size, but which may have big long-term potential.
2013-11-01 00:00:00 Korea Raises Voice for Shareholders by Soo Chang Lee of Matthews Asia
Corporate governance practices in South Koreas family-controlled conglomerates, known as chaebol, find their roots in a social contract that was implicit in the process of the countrys economic development under military dictatorship, which began in the early 1960s. Koreas previously autocratic government initiated economic plans and wielded power in the private sector by assigning different areas of development to each of several chosen corporate families.
2013-10-31 00:00:00 A Rebound in Global Equities by Scott Minerd of Guggenheim Partners
With the U.S. economic expansion entering its fifth year and the global economic picture improving, it appears equities in Europe and Asia can still rise.
2013-10-29 00:00:00 We Must Avoid Seeing the New Arctic through an Old World Lens by Scott Minerd of Guggenheim Partners
It would be easy to think those with a thirst for exploration were born too late - to assume that humanity has already reached every corner of the earth there is to discover. But one region - the Arctic - still contains uncharted mysteries.
2013-10-25 00:00:00 Environmental Awareness in Asia by In-Bok Song of Matthews Asia
I traveled to China in September, quite possibly one of the best times of the year to visit in terms of weather. The air quality in both Beijing and Shanghai was actually pleasant and was very different from how it seemed during my previous visits as well as from the typical accounts one usually hears of the notorious smog in Chinas major cities. It made me think about growing up during the industrialization of my home country, South Korea.
2013-10-25 00:00:00 Why Growth is Deep in the Heart of Texas by Frank Holmes of U.S. Global Investors
TIME Magazine?s cover this week features an engaging collage of the 50 states reassembled to fit within the boundaries of Texas. With a growing number of solid-paying jobs, affordable housing, and low taxes, ?the Lone Star State is America?s Future,? declares economist and writer Tyler Cowen.
2013-10-24 00:00:00 Africa's Glass With Attitude by Mark Mobius of Franklin Templeton
Africa has been an area of interest to our team, for many reasons. One might say Africas biggest asset is its youthful population. With a median age of under 20 in many countries today, that means a very high portion of Africas population is dependent on the adult workforce. Tomorrow, however, it means that the workforce will be massive, and the ratio of dependents to workers (the dependency ratio) could be among the lowest in the world. This huge and youthful population is a key rationale for our interest there.
2013-10-23 00:00:00 Can Kicked Down the Road Once Again... by Blaine Rollins of 361 Capital
Donkeys 1, Elephants 0, Congress -535. The can was kicked down the road once again. We would all like to think that Congress will avoid another last minute battle in early 2014, but unfortunately we cant put it past the current list of non-negotiators. The only thing that is certain in the future is that it will be many election cycles before a member of Congress makes it into the World Series of U.S. Presidential ballots.
2013-10-23 00:00:00 Emerging Europe: Regional Economic Review - 3Q 2013 by Team of Thomas White International
In its latest World Economic Outlook, the International Monetary Fund (IMF) further trimmed its forecast for global growth. The Washington-based lender said expansion will be driven more by developed economies as emerging markets grapple with slowing growth and a tighter global financial scenario as interest rates hint of trending higher in advanced economies such as the United States. However, a reading of economic tea leaves for the Euro-zone and economies such as Russia, Turkey, Poland, Hungary, and the Czech Republic offers room for optimism.
2013-10-22 00:00:00 Bond Legend Dan Fuss on Rising Rates by Robert Huebscher (Article)
Having just celebrated his 80th birthday, Dan Fuss can claim a unique achievement ? his tenure in the fixed income markets has spanned a full market cycle, from the great bear market that began in the early 1950s through the equally great bull market that commenced in 1981. Fuss said today’s environment most closely resembles what he confronted in the late 1950s, when long-term rates were 3% and beginning their march upwards.
2013-10-18 00:00:00 Formosa: Back to Beautiful by Patricia Huang of Matthews Asia
When the Portuguese first landed on Taiwan, they called it Ilha Formosa or Beautiful Island. However, Taiwans route to success has been far more prosaicit rapidly industrialized by mass producing a wide range of consumer goods, including textiles and footwear, toys, bicycles, appliances and computer chips. It famously grew its economy via an export-driven model, making the Made in Taiwan label ubiquitous.
2013-10-18 00:00:00 Trying to Stop a Bull Market Has Risks by Frank Holmes of U.S. Global Investors
U.S. stocks have been on a tear. The S&P 500 Index has climbed a surprising 20 percent so far this year, as a global synchronized recovery takes shape and funds flow back to equities. As I often say, investors take risks when they try to stop a bull run, and plenty of data suggest you might regret taking that action this year.
2013-10-18 00:00:00 Weekly Economic Commentary by Christopher Molumphy of Northern Trust
Closing the books on the U.S. budget... for now; Do we need a debt ceiling?; Study of financial market function earns the Nobel Prize.
2013-10-16 00:00:00 Pacific Basin Market Overview - September 2013 by Team of Nomura Asset Management
North Asian markets ended higher during the quarter after comments from Federal Reserve Chairman Bernanke appeared to infer that the Feds asset purchase program would be extended for a while longer. On the other hand, India and the ASEAN (Association of Southeast Asian Nations) region underperformed along with weakening currencies and continued fund outflows. In China, Premier Li Keqiangs statement that China would meet its gross domestic product (GDP) growth target this year, coupled with better-than-expected economic data, brought some relief to the equity markets.
2013-10-16 00:00:00 Being Contrarian Could Lead to Lucrative Energy Plays by Frank Holmes of U.S. Global Investors
Sometimes the most attractive energy assets arent found in the ground. Rather, at times like today, they are listed on the stock exchange.
2013-10-15 00:00:00 A Q3 client letter: Mike Tyson on Sticking to Your Plan by Dan Richards (Article)
Each quarter I post a template for a client letter, as a starting point for advisors who want to send clients an overview of the three months that just ended and the outlook for the period ahead.
2013-10-15 00:00:00 The Science of Forensic Accounting by Sudarshan Murthy of Matthews Asia
The financial reporting of corporations in Asia is complex, and having a solid grasp of all the nuances involved in these accounting practices is critical when making investment decisions. This month Research Analyst Sudarshan Murthy, CFA, kicks off the first in a series of commentaries on the science of forensic accounting. This first issue focuses on the numbers, and examines what is considered in order to understand a companys accounting decisions and the implications they can have on financial reports.
2013-10-15 00:00:00 The Turmoil in Washington by Bill OGrady of Confluence Investment Management
At the time of this publication the budget situation has not been resolved, although it appears that both parties are backing away from the default abyss. However, given that these crises seem to come once or twice a year, it seemed appropriate to weigh in on the geopolitical impact of the intractable problems of American government.
2013-10-14 00:00:00 Equity Market Review & Outlook by Richard Skaggs of Loomis Sayles
Equities generally performed well across the board in the third quarter. The S&P 500 Indexs solid 5.24% return built on strong gains from earlier in the year. The Index has returned more than 19% through September, surpassing expectations at the start of the year. Slow but steady economic growth in the US, support from the Federal Reserve (the Fed), and more recently, signs of potentially better growth in Europe and Asia have been important positive catalysts.
2013-10-12 00:00:00 These Could be the Most Lucrative Energy Plays by Frank Holmes of U.S. Global Investors
Sometimes the most attractive energy assets arent found in the ground. Rather, at times like today, they are listed on the stock exchange.
2013-10-11 00:00:00 Now Showing in Macau by Taizo Ishida of Matthews Asia
What is most impressive about Macau today is the strong sense of collaboration and commitment from all involved parties: both Macau and mainland Chinese government officials and casino operators. While Asias other gambling centers (Singapore, Malaysia, Cambodia and the Philippines) have also seen waves of notable development in recent years, Macau, in my opinion, should be recognized as the gold standard of the gaming space in Asia.
2013-10-11 00:00:00 Flying Blind: Forecasting with No Data or Endgame by Diane Swonk of Mesirow Financial
Everything from the government shutdown to posturing regarding the lifting of the debt ceiling has heightened uncertainty about the economic outlook. Consumer and business confidence have fallen since the threat of a shutdown emerged, while the reality has taken a toll on communities where a large number of federal workers have been furloughed. Everyone, from cab drivers to restaurant owners, small retailers and (largely) defense manufacturers, were affected in the early days of the partial shutdown of government agencies.
2013-10-10 00:00:00 Economic and Market Overview: Third Quarter 2013 by Team of Envestnet
The economic environment in the third quarter was one of growth, albeit at a slower pace than most economists, and the Federal Reserve (?Fed?), believe can be self-?sustaining. The slow but steady gains the economy made were enough to buoy the stock market, but likely only because the Fed has seen it necessary to maintain its aggressive monetary policy. While employment gains were anemic during the quarter, the unemployment rate actually declined to 7.3%, largely due to a contraction in the labor force.
2013-10-09 00:00:00 Little Visible Progress on the Budget Shutdown, but Some Inside Baseball In Play by Sam Wardwell of Pioneer Investments
President Obama canceled his planned visit to Asia and participation in the Asia-Pacific Economic Cooperation summitciting the inconvenience caused by the government shutdown (the difficulty in moving forward with foreign travel in the face of a shutdown), sending John Kerry in his place, and reiterating his unwillingness to negotiate with Republicans.
2013-10-08 00:00:00 The Market May Be Signaling a Return to a More Typical Recovery by Whitney George of The Royce Funds
Despite the Feds indecision about whether or not to taper, we see evidence that business activity is normalizing and the global economy is getting healthier. Co-CIO, Managing Director, and Portfolio Manager Whitney George talks about how economically sensitive sectors have begun to benefit from rising rates in the small-cap rally, how recent news coming out of China has affected certain portfolio investments, where he is currently seeing long-term opportunities, and stocks in which he has high confidence.
2013-10-08 00:00:00 Detente with Iran? by Bill OGrady of Confluence Investment Management
On September 28th, President Obama reportedly called Iranian President Rouhani to confer over American and Iranian relations. In addition, Irans nuclear program was discussed. This was a historic eventthe first documented call between a U.S. president and his counterpart in Iran in 35 years. The last time such a conversation occurred was when the Shah was in power.
2013-10-08 00:00:00 Absolute Return Letter: Heads or tails? by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners
Demographics captivate me. There are around 7.1 billion of us occupying planet earth today, going to 10 billion by 2050. I often think about how good old mother earth will cope with the additional 3 billion people we are projected to produce between now and 2050. More people translate into increased pressure on already scarce resources, but that is only part of the story and a story well covered by now.
2013-10-07 00:00:00 Shutdown, Debt Ceiling - Who Cares? by Gregg Bienstock of Lumesis
Driving home last week, the plight of furloughed Federal employees was on my mind. How could our elected officials in DC accept their pay for not doing their jobs while hurting folks that want to work but are told not to because the men and woman not doing their job (and still getting paid) shutdown part of the government? I was heartened to learn that Congress was going to take action but quickly realized that the fix paralleled the stupidity that got us into this mess. The legislation ensures that all furloughed employees will be paid for the furlough period.
2013-10-04 00:00:00 New Experiment in Shanghai by Sherwood Zhang of Matthews Asia
In an attempt to further liberalize Chinas economy, central government officials have created an experimental new free trade zone, which officially opened for business this week. The zone combines four existing but smaller development areas within Shanghai that are already exempt from import and export tariffs.
2013-10-04 00:00:00 Is the Pump Primed for Emerging Markets Investors? by Mark Mobius of Franklin Templeton
The vulnerabilitiesor rather, perceived vulnerabilitiesof emerging markets have been the focus of heightened discussions over the past few months. Concerns about the health of emerging markets came on the heels of political upheavals in Egypt, economic deceleration in China and protest demonstrations in Brazil and Turkey this summer.
2013-10-04 00:00:00 The Fire Fueling Gold by Frank Holmes of U.S. Global Investors
For patient, long-term investors looking for a great portfolio diversifier, a moderate weighting in gold and gold stocks may be just the answer. And, today, when looking across the gold mining industry, you?ll find plenty of companies that have paid attractive dividends, many higher than the 5-year government yield.
2013-10-02 00:00:00 The Math is Pretty Straightforward... by Blaine Rollins of 361 Capital
Congress and the White House must be pretty fired up that D&D2 started filming last week. The new movie might be the only thing more stupid than our elected leaders failing to negotiate and reach a deal. Most everyone either wants to spend our tax dollars like drunken professional athletes or hold our economy and financial markets hostage via a government shutdown and failure to raise the debt ceiling.
2013-10-01 00:00:00 The Eight Principles of Value Investing by Scott Clemons and Michael Kim (Article)
In any environment, but especially one characterized by uncertainty, eight principles of investing are critical. These bedrock beliefs help guide our thinking at the levels of asset allocation, security selection and identification of the third-party managers we engage to help manage our clients’ assets.
2013-10-01 00:00:00 Putin's Gambit by Bill OGrady of Confluence Investment Management
Earlier this month, President Obama found himself in a very difficult position regarding Syria. An ill-advised comment about making the use of chemical weapons a red line forced a response when the weapons were clearly used in Syria. The administration began moving toward a military response. However, support for military operations was lacking both domestically and internationally. The clearest signal of this opposition was the British Parliaments vote to prevent P.M. Cameron from authorizing military action in support of the expected U.S. military strike.
2013-09-30 00:00:00 Congress Holds Equities Hostage by Bob Doll of Nuveen Asset Management
U.S. equity advances ended last week and the S&P 500 declined -1.0%.1 Markets appeared concerned about overbought conditions from a strong run up over the past three weeks and uneasy about Federal Reserve (Fed) monetary policy normalization as well as the credibility of its communication strategy. Other widespread reasons for the downturn included increased focus on the fiscal battles in Washington, D.C., heightened worries about a possible near-term government shutdown and the contentious debt ceiling debate.
2013-09-30 00:00:00 Fourth Quarter Outlook: A Turning Point? by Gene Goldman of Cetera Financial Group
It seems sometimes that the outlook for the global economy and the markets has been unchanged for years. Since the end of the recession, each year has commenced with forecasts that the United States economy would break out of its below-trend growth mode, only to see expectations dashed. Meanwhile, Europe has been mired in its own recession as it struggles with heavy post-crisis debt burdens. Growth has slowed in the emerging markets, ending the commodity boom of the first decade of this century.
2013-09-27 00:00:00 Achievement Awards Announced at the 2013 Insiders Forum Conference and Leadership Forum by Bob Veres (Article)
The first annual Insiders Forum conference attracted more than its share of industry leaders. But two of its more prominent attendees received special recognition for their contributions to the financial planning/investment advisory profession.
2013-09-27 00:00:00 Global Destinations for Yield by Scott Minerd of Guggenheim Partners
While U.S. stocks are increasingly due for a consolidation, the outlook for global equities is improving. Now appears to be a good time for investors to increase allocations toward Asia and Europe.
2013-09-27 00:00:00 Don't Cry for Me, Ben Bernanke by Simon Johnson of Project Syndicate
The Federal Reserve will decide on monetary policy for the US based primarily on US conditions. Economic policymakers elsewhere who are pleading for a postponement of US monetary tightening should understand this hard reality and prepare accordingly.
2013-09-27 00:00:00 Bridging the Gap: Global Listed Infrastructure by Wilson Magee of Franklin Templeton
Simply spreading your investments across a smattering of asset classes with the idea that diversification should automatically produce a positive result is an approach thats maybe a little too similar to a roll of the dice. For investors hunting for classes to diversify into, Wilson Magee, Director of Global Real Estate and Infrastructure Securities, Franklin Templeton Real Asset Advisors, and co-manager of Franklin Global Listed Infrastructure Fund, has one word: infrastructure.
2013-09-27 00:00:00 Celebrate with Tokyo by Kenichi Amaki of Matthews Asia
Many in Tokyo erupted with delight and excitement following the recent news of the citys selection as host to the 2020 Summer Olympic Games. Following a failed bid in 2016, Tokyo edged out rivals Istanbul and Madrid on its way to becoming the first Asian city to host the Games for a second time.
2013-09-27 00:00:00 The Weekly Speculator by Michael Shaoul, Ranita Ragunathan, Timothy Brackett, Brendan Moynihan of Marketfield Asset Management
We wrote last week on the eve of the FOMC meeting which resulted in the surprising decision not to reduce the current program of treasury and mortgage security purchases. What was to our eyes equally surprising was the volume and strident tone of the commentary that was issued following this release, ranging from the arrogant to the outraged as if anything really meaningful had changed.
2013-09-27 00:00:00 How to Profit from a Changing China by Frank Holmes of U.S. Global Investors
We believe Chinas rebalancing is positive for investors who selectively invest in its stocks. As Jim ONeill puts it, When a country is embarking on a significant compositional change to its economy, stock-pickers rather than index-trackers have the upper hand.
2013-09-25 00:00:00 Secular Trends in Asian Credit Markets Shape Long-Term Investment Themes by Robert Mead, Raja Mukherji of PIMCO
The next several years will likely see many Asian corporate issuers to come to the market for financing, whether to pursue long-term business plans or to employ traditional corporate finance and leverage strategies. Rigorous credit research, flexible resources, experienced local portfolio management and strong relationships with local stakeholders are all crucial to uncovering attractive opportunities while monitoring volatility in Asias credit markets.
2013-09-24 00:00:00 Michael Aronsteins Warning to Fund Investors by Robert Huebscher (Article)
Fixed-income investors may think rising interest rates are their biggest worry. But bond funds face a new risk, driven by their need for liquidity to service investors daily redemptions, according to Michael Aronstein.
2013-09-24 00:00:00 And That's the Week That Was by Ron Brounes of Brounes & Associates
Hail the Almighty Fed. Despite a rather hectic week on the economic calendar, investors instead focused primarily on news from the Federal Reserve. They rejoiced the end of Summers campaign for Chair and further rejoiced another Fed meeting with far more words than action. The week ended with profit-taking and plenty of uncertainty heading into the homestretch of the year.
2013-09-24 00:00:00 The U.S. Deficit Shrank, but Will It Come Back Bigger Than Ever? by Team of Knowledge@Wharton
The U.S. deficit has fallen to its lowest level since 2008. Experts weigh in on how this will affect upcoming budget negotiations.
2013-09-23 00:00:00 Aberdeen Global Investment Outlook: September 2013 by Mike Turner of Aberdeen Asset Management
The point of maximum policy accommodation may now be in sight: Markets volatile as investors forced to contemplate U.S. Federal Reserve (Fed) exit strategy. Slowing growth in China is putting pressure on Asian and emerging markets to develop domestic led demand. This time really could be different for Japan - however reflating the economy was never going to be easy.
2013-09-21 00:00:00 India's Need for Labor Reform by Siddharth Bhargava of Matthews Asia
India has long been recognized as a country of vast potential. With over 1.2 billion people, it boasts nearly one-fifth of the worlds working age population. However, the countrys laws hark back to a period when Indias political philosophy was still rooted in socialisma time when the government ran its own factories. Such laws have failed to keep pace with the economic liberalization program that began in 1991.
2013-09-20 00:00:00 Growth and Rising Stars by Mark Kiesel of PIMCO
While developed market growth in several regions is picking up cyclically from low levels, overall global economic growth should remain subdued over the next several years. We believe credit spread tightening and rating upgrades are most likely for specific companies in industries and areas with strong growth. We see these "rising star" companies in the U.S. and European auto sector, the gaming, energy and chemical industries and in sectors tied to the U.S. housing market.
2013-09-16 00:00:00 Russia is Tough to Love, Easier to Hate, Hard for Investors to Ignore. Here's Why by Frank Holmes of U.S. Global Investors
Russian President Vladimir Putin created a stir recently when he shared his thoughts with Americans in an op-ed printed in The New York Times. According to The Times, very few pieces written by heads of state have been published by the paper and very few received the attention Putin attracted.
2013-09-13 00:00:00 Trumping Cheap Labor by Teresa Kong of Matthews Asia
Wages in China have surely risen, and some pundits argue that this growth will eventually make the country less competitive. But more nuanced and recent theories suggest that manufacturing centers can cluster around pools of more skilled labor, transportation networks and economies of scale. This month, Teresa Kong, CFA, examines the reasons why China is about more than just low-cost workers.
2013-09-13 00:00:00 Pacific Basin Market Overview August 2013 by Team of Nomura Asset Management
Asian equity markets ended lower in August, chiefly due to concerns about currency weakness in India and Indonesia, while improved macroeconomic data from China contributed to this markets outperformance. The MSCI AC Asia Pacific Free Index including Japan fell by 1.3% while the MSCI AC Asia Pacific ex Japan Free Index closed 0.71% lower during the month. (All performance figures are based on MSCI indices in U.S. dollar terms with dividends included unless otherwise stated.)
2013-09-13 00:00:00 Start Bargain Hunting in Asian Stocks Again? by Frank Holmes of U.S. Global Investors
If you compare the Asian stock market these days to prior years, its looking like dj vu all over again, says Credit Suisse.
2013-09-13 00:00:00 September Investment Bulletin: Global Equity Strategy by Team of Bedlam Asset Management
Year-to-date end-August the strategy performed well with a gain of 22.2% vs. 14.6% for the benchmark. During the month, the index tumbled 3.9%, partly out of fear of foreign military action in Syria and partly that central banks would cease printing money to hold down interest rates commonly known as tapering. Even so, the portfolio held up in August, with a much lesser 2.4% fall, thereby further widening outperformance over the index to 760 basis points so far in 2013.
2013-09-13 00:00:00 Open for Business Down Under by Kenneth Lowe of Matthews Asia
Swiftly after fighting off what most observers deemed to be a fairly weak incumbent Labor opposition in the recent Australian election, the leader of the Conservative coalition and the countrys newly crowned Prime Minister, Tony Abbott, firmly declared Australia to be once more open for business."
2013-09-12 00:00:00 The Best Time to Own Cash: No Return is Better than a Negative Return by Francois Sicart of Tocqueville Asset Management
In his latest essay, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, writes about "the best time for an investor to own cash," which somewhat counter-intuitively, he believes is when that cash pays nothing.
2013-09-12 00:00:00 Approaching a Turning Point by Scott Minerd of Guggenheim Partners
Higher interest rates continue to negatively affect the real economy, increasing the susceptibility of risk assets to downside risk.
2013-09-12 00:00:00 Opportunity Out of Uncertainty: Finding Investment Ideas in a Rising Market by Jay Kaplan of The Royce Funds
Portfolio Manager and Principal Jay Kaplan talks about investing in a slow-growth, high-price environment and discusses where we are in the current retail cycle, companies in which he has high confidence, and his experience with a long-term holding.
2013-09-11 00:00:00 Absolute Return Letter: A Case of Broken BRICS? by Niels Jensen, Nick Rees, Tricia Ward of Absolute Return Partners
EM currencies, stocks and bonds have struggled since the Fed signalled its intent to change course in late May. This has seemingly triggered an exodus of speculative capital from emerging markets but, as is always the case, there is more to the story than that. EM countries (ex. China) no longer run a current account surplus with the rest of the world, and this hurts global liquidity. It is not yet a re-run of the 1997-98 Asian crisis, but it has the potential to become one with all sorts of consequences for bond yields in developed markets, currency wars, etc.
2013-09-10 00:00:00 Investor Anxiety + Uncertainty = More Volatility Ahead by Russ Koesterich of iShares Blog
As Russ expected, both equity and bond market volatility have risen in recent weeks. Russ explains why this rocky road is likely to continue, and he provides two ideas for potentially insulating portfolios amid volatility.
2013-09-06 00:00:00 The Emerging Markets Debt Evolution by Giordano Lombardo of Pioneer Investments
My colleagues Mauro Ratto, Head of Emerging Markets, and Yerlan Syzdykov, Head of Emerging Markets Bond & High Yield, offered these thoughts on emerging markets.
2013-09-06 00:00:00 India - A World of Contrasts by William Hackett of Matthews Asia
Recently, I had the opportunity to join one of our Matthews Asia portfolio managers during a research trip to India, and was reminded of both the importance of such on-the-ground visits as well as the rigor required to conduct them.
2013-09-06 00:00:00 The Good, The Bad and The Ugly by Douglas Cote of ING Investment Management
Good economic news in developed markets has been overshadowed lately by the bad (burgeoning Asian currency crisis) and the ugly (Syria). Unwinding central bank support from the markets will be arduous; it is already contributing to destabilization of certain emerging market currencies. News out of Washington this autumn tapering, Fed leadership and the debt ceiling has the potential to add volatility and uncertainty. The U.S. equity market has been the place to be this year, but diversification remains key.
2013-09-06 00:00:00 Will Gold Follow Its Seasonal Pattern This Year? by Frank Holmes of U.S. Global Investors
There are factors beyond Syria this week driving gold. Thats the Love Trade. This group gives gold as gifts for loved ones during important holidays and festivals. This is the time of the year that we are in the midst of right now. Historically, September has been golds best month of the year. Looking at more than four decades of monthly returns, the precious metal has seen its biggest increase this month, averaging 2.3 percent.
2013-09-05 00:00:00 India and Indonesia by Team of Matthews Asia
Comments from the Federal Reserve to begin reducing its stimulus operations have weighed heavily on markets across Asia in recent weeks. Growing investor concerns have largely centered on those economies that have been running current account deficits and that are likely to be further impacted by lower growth forecasts and reduced capital inflows. More short term, speculative flows from investors into fast-growing Asian economies have also fallen as expectations for higher interest rates in the U.S. have risen.
2013-09-05 00:00:00 Dividends Matter by Mark Mobius of Franklin Templeton Investments
Many people think of emerging market stocks as pure growth plays, and may not realize that there is a separate potential benefitdividendsthat can also be available to investors in these markets. A prolonged period of easy monetary policies in many developed nations (particularly the US) has left income-seeking investors searching for alternatives to traditional fixed income, including dividend-paying stocks. Many investors may not realize dividends arent just a developed-market phenomenon.
2013-09-03 00:00:00 So Step Right Up, Pick Your Favorites... by Blaine Rollins of 361 Capital
So with the backing of The White House, the State Department, the Senate & The Economist, the United States is going to launch Tomahawks on Syrian targets. The President did say that he will let Congress vote on a strike, but both he, Secretary Kerry and Senator Reid let it be known that they will be lighting fuses soon. So as a refresher as to who is supporting whom in Syria, the chart below will both assist and thoroughly confuse you...
2013-09-03 00:00:00 Momentum in Europe by Janus Equity Investment Team of Janus Capital Group
We think now is a good time to be investing in Europe. European equity valuations are at the lowest level in more than 40 years, by some measures, and we are seeing green shoots in the regions downtrodden economy. Meanwhile, European companies in several industries have right-sized their cost structures or refocused their businesses, setting them up to be more competitive on a global scale.
2013-08-30 00:00:00 Ramen for Everyone by Kenichi Amaki of Matthews Asia
Matthews Asias investment team members regularly travel across Asia to conduct research. Between meeting with management teams, touring factories and catching flights from one destination to the next, we do, on occasion, need to eat. Sometimes its room service at midnight while typing up meeting notes, other times we may try some local food. For me, as a ramen lover, the growing number of ramen restaurants across Asia has been a real treat. Apparently, Im not alone in that thought.
2013-08-30 00:00:00 An American Energy Revolution by Frank Holmes of U.S. Global Investors
In Texas these days, theres a feeling of absolute and unwavering confidence in the concept of an American energy revolution. From the depths of reserves to the richness of the energy, an incredible transformation is taking place.
2013-08-29 00:00:00 Have Emerging Markets Gotten Oversold? by Mark Mobius of Franklin Templeton Investments
At Templeton, weve repeatedly championed our value-driven philosophy by frequently buying at times others are most pessimistic. This is not easy to do, even for seasoned market veterans. During the past few months, emerging markets have been subject to such pessimism. These periods of short-term volatility are certainly not new to us, and dont change our long-term conviction of the potential emerging markets hold.
2013-08-29 00:00:00 Earnings: Just Good Enough by Milton Ezrati of Lord Abbett
Corporate profits arent exactly setting the world on fire, but the rate of growth should be sufficient to support further equity market gains.
2013-08-27 00:00:00 The Price Clients Pay for Worst-Case Forecasts by Bob Veres (Article)
Clients and the world at large give inordinate attention to downside scenarios, and nobody is calling our attention to the much larger upside of our business and investment landscape. The human brain amplifies this effect, because it is hardwired to notice threats much more than opportunities. I recently spoke with Dennis Stearns ? an advisor who happens to be an expert in scenario planning ? about the role planners need to play to counteract media-driven negativity.
2013-08-27 00:00:00 Emerging Markets Feel the Ripples of Fed Tapering by Sam Wardwell of Pioneer Investments
Many Emerging Market currencies (notably those of India, Brazil and Indonesia) have been weak since the beginning of May. The declines accelerated sharply in recent weeks, leading to something approaching panic in several markets last week.
2013-08-24 00:00:00 Revisiting the USD Bull Market by Paresh Upadhyaya of Pioneer Investments
The USD bull market has begun with signs that the USD is transitioning to a cyclical currency. Monetary policy divergences in G4, slowing in USD diversification and a dramatic turnaround in the twin deficits, provide a strong fundamental underpinning to a USD rally going forward.
2013-08-23 00:00:00 Why We Still Like China by Philippe Brugere-Trelat, Andrew Sleeman of Franklin Templeton Investments
When China, the worlds second-largest economy and an engine of global growth, sneezes many other markets catch colds. A spike in the countrys short-term lending rate in June gave some investors the sniffles at least temporarily, while others have turned bearish on China amid concerns growth rates this year could be under the weather. However, many investors may be overlooking some powerful macro-economic long-term shifts taking place in the economy that could ultimately improve Chinas bill of health.
2013-08-23 00:00:00 5 China Charts That Look Bullish for Commodities by Frank Holmes of U.S. Global Investors
Over the past few months, investors have seen better economic data coming out of Europe. Consumer confidence in the continent has been rising, manufacturing data is improving and the fiscal situation is on the mend. Now, China appears to be strengthening as well, which could signal better times ahead. Below are five charts that look bullish for China and commodities. While not meant to be comprehensive, they do point to areas where investors might want to pay close attention.
2013-08-21 00:00:00 Asia Brief: On Economic Evolution in Cambodia by Edmund Harriss, James Weir of Guinness Atkinson Asset Management
Cambodias recent national Assembly elections offer hope that the country may be able to achieve a peaceful political transition in the coming years. The countrys political turmoil has held it back behind its neighbors, but tourism and gar- ment assembly are driving an acceleration in economic output growth. However, Cambodia is at risk from inflation through imported petroleum, and its youthful population will want to see improving GDP per capita feeding through into higher living standards, rather than a higher hydrocarbon bill.
2013-08-20 00:00:00 August Monthly Investment Bulletins by Team of Bedlam Asset Management
For the first seven months of the year the portfolio rose by 25.2% vs. 19.3% for the index. During the month, the 6.4% gain was 150 basis points ahead. Three trends continued: the gradual increase in fund flows into equity markets relative to other asset classes, slightly improving economic data across most developed countries, and a mild deterioration in many developing nations.
2013-08-16 00:00:00 Pacific Basin Market Overview July 2013 by Team of Nomura Asset Management
Asian markets ended higher in July after comments from Federal Reserve Chairman Bernanke appeared to infer that the Feds asset purchase program would be extended for a while longer. In China, Premier Li Keqiang stated that China would meet its gross domestic product (GDP) growth target this year, which brought some cheer to the markets. The MSCI AC Asia Pacific Free Index including Japan gained 1.5% while the MSCI AC Asia Pacific ex Japan Free Index closed 2.0% higher during the quarter.
2013-08-16 00:00:00 When Filial Piety is a Legal Obligation by Winnie Chwang of Matthews Asia
Filial piety is a concept well-ingrained in many Asian cultures. Children are often taught to respect their elders, appreciate their hard work of parenting and to reciprocate that gratitude by looking after them in their old age.
2013-08-16 00:00:00 The Telecommunications Services Sector Untethered and Poised to Grow by Chuck Carnevale of F.A.S.T. Graphs
Suffice it to say that the Telecommunications Services sector of today is not your grandfathers Telecommunications Services sector. The explosion, and rapidly becoming ubiquitous implementation, of wireless technologies have been disruptive and game changing. As a result, the very nature of the established stalwarts within this industry have gone through an extraordinary metamorphosis.
2013-08-16 00:00:00 What Happens When You Tell Indians to Stop Buying Gold by Frank Holmes of U.S. Global Investors
With the government in India raising its import tax for gold to 10 percent this week, I firmly believe Indians will continue indulging in gold, even if they have to smuggle it in.
2013-08-15 00:00:00 What Lies Ahead for China? McKinsey Lists 10 Forces by Frank Holmes of U.S. Global Investors
By 2022, research by McKinsey suggests that 75 percent of urban consumers in China will earn around $9,000 to $34,000. This income level, which is currently between the average earned in Brazil and Italy, is only 4 percent of what Chinese households were bringing home in 2000.
2013-08-13 00:00:00 China Struggles to Fight the Trend by Chris Maxey, Ryan Davis of Fortigent
Prior to the global financial crisis, decoupling was the word du jour. In the years since the crisis began, however, decoupling has vanished from the everyday lexicon. In recent weeks, the financial media noticed a new form of decoupling, one that shows improving growth prospects in the developed world but slower growth in developing economies. Rightly or otherwise, much of that slowdown is pinned on China and recent data continues to suggest a slower pace of growth than investors became accustomed to in prior decades.
2013-08-13 00:00:00 Emerging Asia Pacific: Regional Economic Review - Q2 2013 by Team of Thomas White International
Asias emerging nations, the darling of the world economy since the 2000s, uncharacteristically slowed in the first quarter of 2013. After a decade of robust growth, many of Asias fast-growing economies are coming to terms with structural changes. Asian currencies, which had appreciated quite a bit over the past few years thanks to ultra-loose monetary policy in the developed world, came tumbling down at the first talk of a slowdown in the supply of cheap money.
2013-08-13 00:00:00 Developed Asia Pacific: Regional Economic Review Q2 2013 by Team of Thomas White International
Many developed economies in the Asia Pacific region rebounded during the second quarter of 2013 to post a healthy set of growth and inflation numbers. Turning on the monetary spigots during the past one year provided a major fillip to many developed Asian economies. Countries that fumbled in the wake of natural disasters in the recent past, showed marked improvement. Even those countries that were said to be suffering from structural deficiencies, too, responded well to the monetary medicine administered by their various central banks.
2013-08-13 00:00:00 The Gordon Dilemma by Bill O'Grady of Confluence Investment Management
In this report, we will discuss Professor Gordons thesis, examine the geopolitical impact if he is correct and offer some criticisms of his thesis. We will conclude with potential market ramifications.
2013-08-13 00:00:00 Dog Days of Summer Are Upon Us by Blaine Rollins of 361 Capital
Hopefully you are reading this from the beach, because there is so little news happening in the markets that those of us in the office are about to start making news up to justify stock price movements. But while news and volumes are at August lows, here are some thoughts that might ring a bell to help you to either make some money or to set down your smartphone and get back to the water.
2013-08-09 00:00:00 Myanmar Rising by Team of Matthews Asia
After three decades under this military junta, Myanmar has thrown open its doors to change. Areas such as agriculture, mining, manufacturing and tourism all appear to be bursting with potential.
2013-08-08 00:00:00 Investment Advice Technology and How to Lose Money in the Coming Years by Kendall Anderson of Anderson Griggs
Adventures are good for my soul. They create wonderful memories, both of where I have been and all the effort it took to get there. All of us have memories, both good and not so good. I am a bit worried about the near term future.
2013-08-06 00:00:00 We Shale Rise by Janus Equity Investment team of Janus Capital Group
The U.S. oil and gas boom largely underpinned the countrys economic recovery, but this is only the beginning. Dont underestimate what cheap oil and natural gas means for the U.S. economy, or how long this advantage could last.
2013-08-06 00:00:00 China's Slowdown by Bill O'Grady of Confluence Investment Management
Over the past three decades, China has seen its economy grow significantly.
2013-08-05 00:00:00 Two Charts Illustrate How to ?Follow the Money? by Frank Holmes of U.S. Global Investors
Too often investors get caught up in their political allegiance or parties, focus on the negative and lose confidence in stocks. As a result, they can miss great bull markets. I believe when it comes to finding investment opportunities, it?s not about the political party, it?s about the policies, both monetary and fiscal.
2013-08-02 00:00:00 Tech-Savvy Elections in India by Sudarshan Murthy of Matthews Asia
The democratic process in India is famously complex with innumerable caste coalitions and competing interests. With poverty widespread and so many living in remote villages, voter turnout can pose unique challenges.
2013-08-01 00:00:00 Lack of US Economic Growth May Slow Fed Tapering by Kevin Mahn of Hennion & Walsh Asset Management
While we are encouraged that the U.S. economy has been growing, as measured by Gross Domestic Product (GDP) growth, for 15 consecutive quarters starting in the third quarter of 2009, we are concerned that the growth rate has been below that of previous economic recoveries and the economy appears to be stalling and struggling to get back above a 2% growth rate thus far in 2013.
2013-07-30 00:00:00 The U.S. Energy Revolution by Bill O'Grady of Confluence Investment Management
In March 1971, the Texas Railroad Commission (TRC), which allocated oil production for the state of Texas, announced that producers in the state would be allowed a full allocation. This was the first time the TRC had allowed Texas producers to supply an unlimited amount of crude oil since WWII.
2013-07-30 00:00:00 Who Let the Ferrari Out of the Garage? by Blaine Rollins of 361 Capital
With just three trading days left in the month, July is in the running for the title of least volatile month of the year, with the Standard & Poors 500-stock index averaging moves of just 0.39% this month through Thursdays close. That is lower than the 0.41% and 0.42% averages of January and March, respectively, when stocks were grinding slowly, but steadily higher.
2013-07-30 00:00:00 Pennies from Heaven, Irrationality, and “Dys-information” by Chris Richey of Neosho Capital
If QE4 holds to course, ending, not just tapering, sometime in mid-2014, the U.S. will have spent 4+ years out of the past 6 living on monetary stimulus, all the while continuing to pile up ever more claims against future prosperity.
2013-07-26 00:00:00 China Property: A Tough "Bubble" to Pop by Henry Zhang of Matthews Asia
Irecently came across an old newspaper article from February 1989 that described Beijings residential property "bubble," with average selling prices then of about US$430 to US$510 per square meter. The article went on to say that, given that the average college-educated worker typically saved less than approximately US$13 per month, at those prices, it would take a century or so to be able to buy a two-bedroom apartment. The writer concluded that a housing bubble was underway.
2013-07-25 00:00:00 Perspective by Jim McDonald of Northern Trust
Investors have faced a torrent of central bank actions and communications during the last month, and markets continue to differentiate among economies and companies a welcome maturation from the markets? prior regime of ?risk on/risk off.? We believe the Federal Reserve has moved from an easing bias to one of tightening but at an elongated pace that will remain data dependent. Joining in this parsimony are some key emerging-market central banks, including the People?s Bank of China, which is working to control credit risk in the Chinese economy.
2013-07-23 00:00:00 Fantasy versus Factors by Michael Nairne (Article)
Investors who wish to earn market-beating returns have a choice. They can indulge in the fantastical quest for alpha via high-cost active managers or they can construct factor tilts in their equity allocations via low-cost exchange traded or enhanced index funds. It doesnt take a PhD in mathematics to determine which route is more likely to take an investor to higher performance.
2013-07-20 00:00:00 Any Bonds Today? by John Mauldin of Millennium Wave Advisors
Given the acknowledged limitations of the CPI, we nevertheless use it in myriad ways. It governs cost-of-living adjustments for Social Security beneficiaries, government employees, and many labor union members. CPI is baked into the general cake, even though we know it is an imperfect fit in almost every situation.
2013-07-19 00:00:00 Asia's Startup Incubators by Jerry Shih of Matthews Asia
As some of our readers may already know, Matthews Asia is headquartered in San Francisco and just north of Silicon Valley, home to some of the worlds largest technology corporations as well as a hotbed for tech startups. The rise of Silicon Valley has been bolstered by its connections to nearby Stanford University as well as to the emergence of the areas venture capital industry on Sand Hill Road since the 1970s. This energy and entrepreneurial culture has helped create many innovative ventures that have disrupted traditional businesses.
2013-07-19 00:00:00 Challenging a Long-Held Assumption about Commodities by Frank Holmes of U.S. Global Investors
It is widely accepted that China spurred higher commodity prices in the past decade. And if the country was the force behind the boom, then the assumption is that China?s lower, but still healthy growth will be a drag on commodity prices. But recent research challenges this assumption.
2013-07-18 00:00:00 ASEANSeeking Further Integration by In-Bok Song of Matthews Asia
Southeast Asia is pushing ahead with an economic initiative analogous to the E.U. called the ASEAN Economic Community (AEC). The 10-member bloc is striving to make this partnershipwhich envisions creating a single market and production base and developing closer economic ties both within the region and the broader global economya reality by 2015. In-Bok Song, takes a look at the benefits and hurdles that may be expected in this lengthy process for further integration of such aspects as liberalized trade, investment, skilled labor and free flow of capital.
2013-07-18 00:00:00 The Death of Disasterism by Steven Vincent of BullBear Trading
From late 2012 I have been gradually layering and developing the thesis that a secular bull market started in November of 2012 (with a possible revised start date of June 2012), ending the sideways secular bear market that started in 2000. Here are the basic components of that thesis through the last report.
2013-07-16 00:00:00 Herbert Huebscher (1926-2013) by Robert Huebscher (Article)
My dad passed away on July 8. My eulogy is below.
2013-07-12 00:00:00 Deregulating Korean Telecom by Soo Chang Lee of Matthews Asia
Renowned as the worlds most wired country, South Korea has been quick to adopt and distribute cutting edge communications technology when it comes to both wired and wireless Internet gadgets.
2013-07-12 00:00:00 Hasenstab: Emerging Out of the Consensus Trade by Michael Hasenstab of Franklin Templeton Investments
Just when is a potential long-term reward worth the short-term risk? Investors are often most focused on the short-term pain of a particular event (hard to blame them), losing sight of possible outcomes farther out into the future. That could partially explain whats going on in the emerging markets right now, at least according to Michael Hasenstab, co-director of the International Bond Department, Franklin Templeton Fixed Income Group.
2013-07-12 00:00:00 Commodities 2013 Halftime Report: A Time to Mine for Opportunity? by Frank Holmes of U.S. Global Investors
It was a challenging first half of the year for most commodities, with only two resources we track on our Periodic Table of Commodities Returns rising in value. Natural gas and oil rose 6.5 percent and 5 percent, respectively, while silver lost a third of its value and gold lost a quarter of its price from the beginning of the year.
2013-07-11 00:00:00 Turmoil and Transition in China by Scott Minerd of Guggenheim Partners
Tensions in Asia are rising, as China attempts to move toward a more market driven economy. This, combined with the ongoing ultra loose monetary conditions in Japan, has elevated the threat of a financial crisis in the region between now and the end of 2013.
2013-07-11 00:00:00 Pacific Basin Market Overview June 2013 by Team of Nomura Asset Management
Equity markets in Asia ended generally lower in the second quarter of 2013 due to concerns over the U.S. Federal Reserves apparent shift towards a more balanced monetary policy stance following Chairman Bernankes statements suggesting a tapering of its asset purchase program.
2013-07-09 00:00:00 Whitney George on 2Q13: Stocks Continue to Look More Appealing Than Fixed Income by Whitney George of The Royce Funds
In addition to detailing what sectors currently look attractive to him from a valuation standpoint, Co-CIO, Managing Director, and Portfolio Manager Whitney George discusses three stocks that exemplify his approach, the current case for active small-cap management, why stocks look more attractive than fixed income, and his opinions on the markets decline in late June.
2013-07-05 00:00:00 Accessing Myanmar's Growth by Frank Holmes of U.S. Global Investors
Did you know that in the first half of the last century, Myanmar had twice the GDP per capita of China? What a difference a few decades and government policies make, as China is ten-fold the size of Myanmar today, according to UBS Research. The change in wealth between the two nations is a prime example of how government policies can have a tremendous effect on a countrys growth.
2013-07-05 00:00:00 The Asian Giant Stampeding into Gold by Frank Holmes of U.S. Global Investors
In this environment, gold should remain attractive. However, as the West flees the precious metal, another set of gold buyers has come forward with the aim to preserve wealth. Take a look at the chart below which shows total gold production compared to the gold deliveries on the COMEX and the Shanghai Gold Exchange.
2013-07-04 00:00:00 The Free-Trade Charade by Joseph E. Stiglitz of Project Syndicate
The negotiations to create a free-trade area between the US and Europe, and another between the US and much of the Pacific (except for China), are not about establishing a true free-trade system. Instead, the goal is a managed trade regime managed, that is, to serve the special interests that have long dominated trade policy in the West.
2013-07-03 00:00:00 Getting Back to Normal by Douglas Cote of ING Investment Management
Though markets were whipsawed by the announcement, the Feds plan to step aside and allow normalization is a good thing. The primary risk to hedge is now economic growth and the strong equity returns it tends to produce not financial Armageddon. While risks in Europe and China persist, U.S. fundamentals look relatively strong. Its not too late for investors to move away from defensive positioning and back toward a standard allocation.
2013-07-02 00:00:00 The 2013 Mid-Year Geopolitical Update by Bill O'Grady of Confluence Investment Management
At mid-year, we customarily publish our geopolitical outlook for the second half of the year. This list is not designed to be exhaustive. As is often the case, a myriad of potential problems in the world could become issues in the second half of the year. The lineup listed below details, in our opinion, the issues most likely to have the greatest impact on the world. However, we do recognize the potential for surprises which we will discuss throughout the year in upcoming weekly reports.
2013-07-02 00:00:00 Let's Barbecue It... by Blaine Rollins of 361 Capital
Equity investors finished June with the first down month in 8 for the S&P500. Bond investors took a Tommy Boy two by four across the face. And yes, it did leave a mark. Two months ago the "Great Rotation" from bonds to equities was nowhere to be seen. Today the panic out of fixed income funds is happening at the highest levels seen since 2008. As we noted last week, inflection points in major rotations are volatile, scary, and unpleasant. This helps to explain the seven 100 basis point moves in the S&P500 in the month of June, which marks the most volatility in 12 months.
2013-07-02 00:00:00 Stay the Course as Mixed Signals Move Markets by Frank Holmes of U.S. Global Investors
Traders stampeded out of gold, emerging markets and bonds this month, setting record monthly outflows in June. Ever since the Federal Reserve hinted in May that signs of a stronger economy could allow for a slowdown of stimulus, markets have protested the news.
2013-06-28 00:00:00 Stay the Course As Mixed Signals Move Markets by Frank Holmes of U.S. Global Investors
We maintain that gold is in extremely oversold territory and mathematically due for a reversal toward the mean. Yet when gold prices plummet, fear takes over and some investors forget the fundamental reasons to own gold: Gold is a portfolio diversifier and a store of value. It is a finite resource with increasing global demand.
2013-06-28 00:00:00 Investment Bulletin: Global Equity Strategy by Team of Bedlam Asset Management
For the first five months of the year the global portfolio enjoyed a net gain of 21.0%, 350 basis points better than the index, edging ahead further in May. Recent smoke signals from the Federal Reserve Bank implying - subject to a wide range of get-out clauses that less money might be put into the system, have caused market hysterics. Bond investors have rightly been stampeding out, ending a 32-year old bull market. Its longevity had caused dangerous complacency and overexposure, especially to illiquid and expensive emerging market debt through open-ended vehicles.
2013-06-28 00:00:00 Short-Term Pain, Long-Term Gain by Richard Gao of Matthews Asia
Chinas economy has seen plenty of headwinds recentlyweak exports numbers, slower growth in both services and manufacturing and a weak recovery of corporate earnings despite rapid credit growth. Chinas equity markets have performed weakly too and have been extremely volatile. But much of the recent volatility has less to do with sagging growth and much more to do with a cash crunch and tight liquidity in Chinas banking system. What is going on?
2013-06-26 00:00:00 Sock Puppet Kabuki; Nikkei Today Parallels Dot-Com Bust by Peter Schiff of Euro Pacific Capital
The Japanese stereotype of excessive courtesy is being confirmed by the actions of prime minster Shinzo Abe who is giving the world a free and timely lesson on the dangers of overly accommodative monetary policy. Whether or not we benefit from the tutorial (Japan will surely not) depends on our ability to understand what is currently happening there.
2013-06-26 00:00:00 2 Ways to Play the US Energy Boom by Russ Koesterich of iShares Blog
Russ offers two ideas one perhaps obvious and one perhaps not for investors looking to potentially benefit from the US energy renaissance.
2013-06-25 00:00:00 Despite More Downside Risk, Stick with Stocks by Russ Koesterich of iShares Blog
Despite stocks recent declines and the rocky road ahead, Russ explains why he still prefers equities over bonds.
2013-06-21 00:00:00 Asia Brief: China's Energy Demand by Edmund Harriss, James Weir of Guinness Atkinson Asset Management
China has the worlds largest unconventional gas reserves, but these so far remain untapped despite its growing demand for energy. China is now trying to follow the example of the US, and the government has set aggressive targets for unconventional gas production. As the demand for transportation fuels grow over the next decade, this gas could be a major contributor to meeting that need.
2013-06-21 00:00:00 A Toast to Change by Hardy Zhu of Matthews Asia
In China, there is a distilled white liquor that is as revered as wine is in France. Known as Chinas national wine, maotai, or "baijiu" in Chinese, has been celebrated for thousands of years. Having such a high-end branded white spirit on your banquet table is seen as a sort of status symbol or the hallmark of an auspicious occasion, such as a wedding or formal dinner. As recently as last year, some bottles were commanding more than US$300 each, with prices rising partly from the strong demand related to government and business sector events.
2013-06-21 00:00:00 End of Quantitative Easing Tapers Asian Returns? Part I by Robert Horrocks of Matthews Asia
Historically Asian markets have done well in periods of a weaker U.S. dollar and faster growth, so lowering peoples growth expectations and causing them to bid up the U.S. dollar is about the worst combination for Asian equities historically. And I do not think that Asias relation to global markets has changed significantly enough to nullify this past relationship. However, there are reasons to think that the effects on Asias equity prices may be a little more muted this time.
2013-06-21 00:00:00 End of Quantitative Easing Tapers Asian Returns? Part II by Teresa Kong of Matthews Asia
While yields have come off their historical lows in the U.S. and Asia, there is substantially more room for rates to continue to rise. In terms of credit spreads, we have seen investment grade and high yield spreads widen. We believe that spreads will have some room to widen given a repricing of risk across the globe.
2013-06-21 00:00:00 What's an Investor to do in Markets like These? by Frank Holmes of U.S. Global Investors
What should an investor do after a day like yesterday? Stay calm and invest on, as I believe there is opportunity in picking up what the bears left behind. Here are a few ideas to ponder.
2013-06-18 00:00:00 Help Clients Fill the Income Void by Sponsored Content from Legg Mason Global Income Survey (Article)
Affluent investors all over the world just arent getting what they want from their income investments, according to Legg Masons recently released Global Income Survey. Yet there is good news: most say they want to become more knowledgeable about income investing, and theyre eager for financial professionals to point out fresh opportunities.
2013-06-17 00:00:00 Submerging Markets: What the Emerging Market Selloff is Telling Us by Robert Isbitts of Sungarden Investment Research
Investing at its most basic level is about one thing: the return you seek on your investment and the risk you take to get that return. I often emphasize that the biggest risk to investors is volatility, because its the occasional shakiness of markets or market segments that causes investors (whether they manage their money or have someone else do it for them) to react emotionally instead of logically. That plays out every day in markets around the world.
2013-06-14 00:00:00 The Evolution of Emerging Market Corporate Bonds for U.S. High-Grade Fixed-Income Investors by Todd Kurisu, Thomas Brennan of William Blair
Emerging market (EM) investment-grade corporate bonds are an important and growing segment of the core ?xed-income universe. These bonds have evolved to be more like U.S. investment-grade corporate bonds than high-yield or traditional emerging market debt (EMD) securities. This sector has demonstrated favorable risk, return, and diversi?cation bene?ts in the context of a broad market ?xed-income portfolio. Todays ?xed-income investors must have a framework for evaluating new opportunities subject to prudent risk management
2013-06-14 00:00:00 Looking for Growth? Go Small and Global by Liliana Castillo Dearth, Bruce Aronow of AllianceBernstein
In the hunt for growth in todays low-growth world, up-and-coming small- and mid-sized companies are a good place to start. But you need to look everywhere, from Indiana to Indonesia.
2013-06-14 00:00:00 Japan's Crossroads by Jesper Madsen of Matthews Asia
The tone on investing in Japan has changed. In the six months leading up to May 22, the Tokyo Stock Price Index rose 66% in local currency terms, prompting investors to ask themselves the unthinkablewhy have I not allocated more to Japanese equities? During the same time the yen depreciated about 20%, giving Japans exporters some much-needed breathing room. However, while the financial markets have given the nod of approval to the economic policies of Prime Minister Shinzo Abe, or Abenomics, Japan may possibly be missing a learning opportunity.
2013-06-14 00:00:00 Global Small Cap Investing: Unconstrained Opportunities by Blake Pontius of William Blair
Equity asset allocations have become more global in recent years as investors have sought to reduce the long standing home country bias in their portfolios. Further propelling this trend has been the growing aversion to traditional asset class structures and indeed, conventional asset class definitions, in the aftermath of the 2008-2009 global fi nancial crisis. Against this backdrop, global equity strategies have continued to garner asset fl ows in Europe and have slowly begun to gain traction in the U.S. after years of tepid demand.
2013-06-14 00:00:00 A Sweet Find on an African Adventure by Frank Holmes of U.S. Global Investors
The heart of Africa has been beating strong in recent years due to elevated commodity prices and resilient domestic demand, despite the global economic slowdown. Among the sub-Saharan African countries, Sierra Leone was the fastest growing country last year, according to the World Bank. Its economy experienced growth that is as rare today as Fancy Red diamonds. GDP increased a whopping 18 percent.
2013-06-13 00:00:00 China's Services Revolution by Sherry Zhang of Matthews Asia
Historically, China has focused on infrastructure and heavy industries at the expense of the service sector. Two years ago, service industries in China, such as hospitality, advertising, insurance and tourism, contributed a mere 43% of the countrys GDPwell below that of more developed economies like the U.S. and U.K, which saw nearly 80%. This month Sherry Zhang takes a look at the more balanced growth China will need in order to continue its economic trajectory over the next decade.
2013-06-13 00:00:00 Pacific Basin Market Overview May 2013 by Team of Nomura Asset Management
After a positive start, many Pacific Basin Markets ended the month lower amid concerns that the Federal Reserve (Fed) will soon begin to gradually scale back its quantitative easing measures by reducing the pace of central bank asset purchases. The MSCI AC Asia Pacific Free Index including Japan decreased by 4.8% while the MSCI AC Asia Pacific ex Japan Free Index closed 4.3% lower in May. (All performance figures are based on MSCI indices in U.S. dollar terms with dividends included unless otherwise stated.)
2013-06-12 00:00:00 Cyclical Stocks Appeal After Defensive-Led Rally by Vadim Zlotnikov of AllianceBernstein
This years equity market rally was initially led by defensive stocks, as macroeconomic concerns persisted despite improved risk appetite. With valuations in these sectors looking stretched and cyclically oriented stocks starting to rebound in May, is a bigger shift starting to unfold?
2013-06-12 00:00:00 5 Reasons Not to Flee Non-US Dividend Stocks by Russ Koesterich of iShares Blog
As bond yields rise, is it time to flee dividend stocks? Russ explains why the answer is, no, at least when it comes to international dividend payers.
2013-06-12 00:00:00 Bond Realities: The Changing Landscape for Fixed Income and the Death of the Agg' by Andrew Johnson of Neuberger Berman
Earlier this year Andrew A. Johnson, Neuberger Berman?s Chief Investment Officer for Investment Grade Fixed Income, led a series of discussions with institutional clients about the state of the fixed income market and key ideas in approaching opportunistic fixed income investing in the current environment. Here, Mr. Johnson has adapted, and elaborated on, the concepts described at those meetings.
2013-06-11 00:00:00 How Asia's Growth Transitions and Policy Experiments Are Shaping the Global Outlook by Ramin Toloui, Tomoya Masanao, Robert Mead of PIMCO
Our view is that Chinese GDP growth will downshift, averaging 6%-7.5% for the next five years as net exports and investment are reaching their limits. In Asia, Japan is perhaps the economy closest to the T-junction described in PIMCOs global secular outlook: The destination of Japans journey looks increasingly uncertain, with multiple potential outcomes that could stabilize or destabilize the global economy and markets.
2013-06-10 00:00:00 Emerging Markets Mid-Year Pulse Check by Mark Mobius of Franklin Templeton Investments
Global economic growth hasnt been terribly inspiring so far in the first half of the year, but many investors have nevertheless been inspired to pour more assets into the equity markets, some of which have surged to record highs. As we hit the mid-year point, now seems like a good time to take a pulse check of emerging markets and assess our prognosis.
2013-06-07 00:00:00 Is College Overrated? by Vivek Tanneeru of Matthews Asia
Obtaining a college degree in Asia, like elsewhere in the world, is a middle class dream. It is often considered a ticket to increased employment opportunity. But recently there has been some evidence to suggest that this is not always the case.
2013-06-07 00:00:00 As Economy Heats Up, Will Commodities? by Frank Holmes of U.S. Global Investors
Dont wait for the Fed to officially raise rates, as research shows that investors get the most benefit from materials and energy stocks by getting in now
2013-06-06 00:00:00 The Risk of Government Policies and the Rationing of Retirement by Jason Hsu of Research Affiliates
In late April, a group of leading economists and investment practitioners assembled in La Jolla, California, for Research Affiliates 2013 Advisory Panel. Our theme this year touched on two topics that have been front-and-center in recent public debates: the risk of government intervention and the potential rationing of retirement.
2013-06-04 00:00:00 Asia ex-Japan: Outlook and recent trends by Andrew Mattock (Article)
Andrew Mattock, Fund Manager, Pan Asian Equities, reviews Asia ex-Japan markets year to date and touches on some recent trends in the region. He notes Southeast Asia markets have had a strong start to the year while in contrast, north Asia markets have been flat or down year to date. Andrew explains that the rationale for investors going into Southeast Asia more aggressively, relative to North Asia, is the exposure of North Asian companies and economies to both the industrial production cycle in China and also weak export growth coming out of the global economy.
2013-06-04 00:00:00 The Gold Bull vs The Paper Tiger by Peter Schiff of Euro Pacific Precious Metals
Thats all, folks. One look at the headlines will tell you the gold bull market is officially over: the stock market is booming, a modest recovery of the US economy is underway, and the dollar is dominating the forex. Time to sell your bullion and get back into US stocks!
2013-06-04 00:00:00 Wounded Heart by Bill Gross of PIMCO
Joseph Schumpeter, the originator of the phrase creative destruction, authored a less well-known corollary at some point in the 1930s. Profit, he wrote, is temporary by nature: It will vanish in the subsequent process of competition and adaptation. And so it has, certainly at the micro level for which his remark was obviously intended. Once proud, seemingly indestructible capitalistic giants have seen their profits fall short of everlasting and exhibited a far more ephemeral character.
2013-05-31 00:00:00 Just One Day Out of Life by Michael Han of Matthews Asia
During my visit to Korea a few weeks ago, a hot debate over an alternative holiday system caught my attention. When a holiday falls on a weekend in Korea, it is not generally observed by businesses on the prior or subsequent weekday. However, the government has recently sought to change this despite strong opposition from interest groups and the business sector.
2013-05-30 00:00:00 And That's the Week That Was by Ron Brounes of Brounes & Associates
All good things must come to an end (hopefully just temporarily). After a nice month-long weekly winning streak, stocks gave back some ground as investors over-analyzed Fed comments and worried about future monetary policy. (The stimulus will end at some pointthats not necessarily a bad thing.) Japan took the over-analysis the hardest as its market suffered a serious setback, though the rally for the year had been significant and some watchers expected a pullback at some point (just not all in one day).
2013-05-29 00:00:00 Is This the End of the World As We Know It? by Massimo Tosato of Schroders Investment Management
After five turbulent years of decline and unrelenting economic doom there are signs that change could be afoot.
2013-05-24 00:00:00 Sri Lanka's Victory by Teresa Kong of Matthews Asia
Sri Lanka has begun to reap the fruits of peace. By diverting resources that were previously spent on its military toward things like infrastructure, tourism and education, its economy has experienced solid growth. As our small car sat in traffic on the main road leading to the Colombo airport, my driver told me about the newly planned highway scheduled to open later this year. The Colombo-Katunayake Expressway, he said, would reduce my 1.5-hour trip to about 20 minutes. More importantly, I thought, we wouldnt be driven off the road by rickshaws referred to locally as tuk-tuks.
2013-05-24 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust
The two Asian giants have a challenging year ahead. The Fed will be challenged to keep the bond market under control.
2013-05-24 00:00:00 The Love Trade for Gold is Still On! by Frank Holmes of U.S. Global Investors
The more important demand for gold, in my opinion, comes from the enduring Love Trade, as countries like China and India buy the precious metal out of love and tradition.
2013-05-24 00:00:00 Bifurcation Blues by Herbert and Randall Abramson of Trapeze Asset Management
Bifurcation. A very technical sounding word. It merely means ?a division into two parts?, which is what we are witnessing in many areas related to investment, both macro and micro. And it is exhibiting to value investors those areas to avoid and the most attractive to embrace. And giving rise to a wide range of disparate opinions among economic and investment professionals as to what outcomes are likely. Needless to say, we have our own strong views.
2013-05-23 00:00:00 ING Fixed Income Perspectives May 2013 by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management
How do you like them apples? By pointing out some Excel blunders in the data of Harvard economists Reinhart and Rogoff, a UMass-Amherst grad student appears to have gotten their number and in the process discredited their seminal work touting the merits of austerity. Though Good Will Hunting fans may be amused to see a couple of Harvardians get their comeuppance, you don?t need the titular character?s wicked smarts to deduce that harsh government spending cuts may not be the best way to pick up your economy.
2013-05-22 00:00:00 Asia Brief: China's Car Fleet The Largest in the World? by Edmund Harriss, James Weir of Guinness Atkinson Asset Management
Car sales in China have grown rapidly since 2009 and it is on course to outstrip the US in terms of the size of its car fleet by the end of this decade. This presents a major challenge to the Chinese government, which must balance its peoples happiness and political stability with economic development in an environment which has already been compromised. The momentum of demand for new passenger vehicles is likely to make air quality worse and Beijing has introduced emissions and efficiency standards to address the problem.
2013-05-21 00:00:00 A Cry for Help from Income Investors by Sponsored Content from Legg Mason Global Income Survey (Article)
Confronted with the stark realities of income investing now, affluent investors all over the world are rethinking their approach, notes Legg Mason’s just-released Global Income Survey. Yet the Survey also found income investors hungry for more knowledge and ideas -- creating opportunities for savvy financial advisors.
2013-05-21 00:00:00 Capitalism and Democracy by Bill O'Grady of Confluence Investment Management
In the Italian elections, the party that showed the strongest results was the Five Star Movement, led by the comedian Beppe Grillo. Despite this strong showing, the party failed to form a government and refused to participate in any coalitions. This decision not to participate in the political process has been exhibited by other protest groups, such as Occupy Wall Street, the Israeli Tent Movement, and the Spanish Indignant movement.
2013-05-21 00:00:00 As Energy Demand Outpaces Supply, Asia Looks Overseas to Refuel by Raja Mukherji, Taosha Wang of PIMCO
Many Asian countries are encountering growing energy shortages due to declining indigenous resources and domestic consumption growth. Oil companies in Asia frequently engage in overseas acquisitions. In many cases, these transactions help enlarge reserve base, access technological know-hows and enhance corporate profitability. Strong sovereign support is a key investment thesis in the Asian oil and gas sector. Through our bottom-up analysis, we are finding numerous investment opportunities.
2013-05-20 00:00:00 Global Real Estate Is Hot Again, but Where Are the Best Opportunities? by Joe Rodriguez of Invesco
In this low interest rate environment, yield-hungry investors have been moving out of bonds, and many are opting for real estate investment opportunities. Combine that with a structural undersupply of institutional quality real estate in many key cities across the globe, and an attractive case for investment starts to emerge. Heres where we see the most attractive and promising opportunities by region this year.
2013-05-18 00:00:00 All Japan, All the Time by John Mauldin of Millennium Wave Advisors
This week we again focus on Japan. Their stock market has been on a tear, and their economy grew 3.5% last quarter. Is Abenomics really the answer to all their problems? Is it just a matter of turning the monetary dial a little higher and voila, there is growth? Why doesnt everyone try that? And what would happen if they did?
2013-05-17 00:00:00 A Matter of Perspective by Robert Horrocks of Matthews Asia
A Hong Kong investor once told me that he considered Asias capital markets to be like breaking waves; their rhythms often violent, but ultimately, they make a steady progression up the shore. It has often been noted that many Asia investors play these short-term rhythms. But ultimately the tide does come in and there is room for the long-term investor.
2013-05-17 00:00:00 Finding Opportunity Far and Near by Frank Holmes of U.S. Global Investors
Would it surprise you to learn that a vast majority of equity valuation models state that stocks should head much higher over the next five years?
2013-05-16 00:00:00 Investors Living in Emerging Markets are a Bullish Bunch! by Mark Mobius of Franklin Templeton Investments
Part of my job involves putting myself out on a limb at times, and I have taken the risk of being subject to contrary (sometimes enthusiastically so) viewpoints. Ive even been accused of being too optimistic about emerging markets, perhaps partly because my views often represent a stark contrast to dramatic news headlines. So when I took a look at the findings of Franklin Templeton Investments 2013 Global Investor Sentiment Survey (GISS),1 I was pleased to discover my longstanding optimism about emerging markets seems to be spreading among investors.
2013-05-15 00:00:00 Speaking of a Great Week... by Blaine Rollins of 361 Capital
I left the office each day thinking that I just saw another walk off game winning home run by the S&P500. The bears were given their chance in April with the weak economic data and slightly less than exciting earnings, but they just couldnt break it. In return, the employment data was a bit better, the global central banks came out swinging (ECB, Australia, and South Korea), then the markets broke the Yen, Bonds, and Gold, and the Bulls absolutely skinned the Bears.
2013-05-15 00:00:00 Is Japan's Sun Rising Again? by Kenichi Amaki of Matthews Asia
Japans stock market continues to rise while its currency heads in the other direction. Its new leaders, now enjoying high approval ratings, are battling deflation and trying to jump-start its economy with a new determination. This month Kenichi Amaki takes a look at what, if anything, is different this time.
2013-05-15 00:00:00 Pacific Basin Market Overview by Team of Nomura Asset Management
Pacific Basin equity markets continued to rally in April, led by Japan where the central bank announced that it intends to double the monetary base and inject liquidity into the markets. The MSCI AC Asia Pacific Free Index including Japan gained 4.9% while the MSCI AC Asia Pacific ex Japan Free Index closed 2.6% higher in April. (All performance figures are based on MSCI indices in U.S. dollar terms with dividends included unless otherwise stated.)
2013-05-14 00:00:00 Nouriel Roubini: Four Reasons Investors Should be Worried by Robert Huebscher (Article)
Despite a modest recovery from the nadir of the financial crisis, the global economy still faces tail risks, according to Nouriel Roubini. Roubinis forecast is not as gloomy as the one that earned the moniker Doctor Doom, when he correctly predicted the housing market collapse and the ensuing global recession. But, in a talk May 1, he identified todays biggest danger points in Europe, the U.S., China and geopolitics which he said threaten to destabilize the global economy.
2013-05-14 00:00:00 Guide to Working with Monetary Napalm by Scott Colyer of Advisors Asset Management
Napalm is a highly incendiary form of jellied fuel. It was used extensively in the Vietnam War to quickly ignite massive fires over large areas of land. In the world of financial incendiaries, the Feds overwhelming monetary stimulus has ignited asset prices in the United States with the force and effectiveness of napalm. Is the fire short lived? Are the gains in asset prices temporary or can they be believed? Are the housing and stock markets on fire just because of the Feds quantitative easing (QE) or could there be a much more fundamental reason?
2013-05-13 00:00:00 Skills, Education, and Employment by John Mauldin of Millennium Wave Advisors
It is graduation time, and this morning finds me swimming in a sea of fresh young faces as a young friend graduates, along with a thousand classmates. But to what? I concluded my final formal education efforts in late 1974, in the midst of a stagflationary recession, so it was not the best of times to be looking for work. It turned out that I had a far different future ahead of me than I envisioned then. But I would trade places with any of those kids who graduated today, as my vision of the next 40 years is actually very optimistic.
2013-05-13 00:00:00 Investment Bulletin: Global Equity Strategy by Team of Bedlam Asset Management
Equity markets remained strong and the portfolio continued to outperform well, with a monthly gain of 3.2% vs 0.6% for the index. After two decades of policy torpor, Japans government has rapidly adopted a trio of policies to kick start the economy: monetary and fiscal stimulus, plus a weak yen. This is shock and awe relative to GDP, being far greater than any experiment in any developed country since the Second World War.
2013-05-09 00:00:00 Make Way for the MIPS by Scott Minerd of Guggenheim Partners
Emerging markets still provide excellent opportunities for outperformance in equities, with Malaysia, Indonesia, the Philippines and Singapore being among the best positioned for the decade ahead.
2013-05-08 00:00:00 6.7 Million Missing Workers Where Did They Go? by Gary Halbert of Halbert Wealth Management
Today we will touch several bases. We begin with last Fridays unemployment report which was hailed by the mainstream media, but had a lot of bad news to go with the good. From there we look at the estimated 6.7 million missing workers in this economy and ponder if theyre permanently gone from the employment rolls.
2013-05-07 00:00:00 Niall Ferguson: Four Reasons Why the U.S. is Failing by Robert Huebscher (Article)
Niall Ferguson is the champion of anti-Keynesian economists. Last week, he explained why America’s pursuit of Keynesian policies is leading to disastrous consequences.
2013-05-07 00:00:00 Mutual Fund Companies Need to Prepare for a Changing Environment Fund Industry Turbulence Ahead by Paul Franchi (Article)
The mutual fund industry grew explosively from the 1980s on a rare tonic of a low-inflation credit expansion powered indirectly by international trade flows. That run reached a peak in 2008 when the application of quantitative easing (QE) served to prevent industry collapse with a softer form of transition, which continues today but must end when inflation returns.
2013-05-07 00:00:00 Syria and the Red Line by Bill O'Grady of Confluence Investment Management
On Thursday, April 25, Secretary of Defense Hagel acknowledged that evidence that chemical weapons exposure occurred in Syria was probably accurate. This news dominated the Sunday talk shows, mostly because President Obama had indicated that Syrian military use of chemical weapons would be a game changer and a red line that would trigger a U.S. and international response. Now that it appears that somehow chemical weapons exposure did occur, the world awaits to see what exactly the president meant by a response.
2013-05-04 00:00:00 The QE Sandpile by John Mauldin of Millennium Wave Advisors
Sell in May and go away? What about "risk off?" And ever more QE? Todays letter is a quick note and a reprise of a popular letter from yesteryear (with a bit of new slant), as I am at my conference in Carlsbad.
2013-05-03 00:00:00 Asia's Resource Riches vs. Reform by Sharat Shroff of Matthews Asia
In recent years, the rate of acquisitions of local Asian firms by multinational companies has generally increased, particularly in China. This has happened across many industries such as industrials, medical devices and consumer staples. In many cases, if the multinational firms are not acquiring an entire company outright, they are taking a controlling stake, rather than a minority stake as a passive shareholder.
2013-05-01 00:00:00 Emerging Asia Pacific: Regional Economic Review by Team of Thomas White International
Major emerging Asia Pacific economies, which picked up growth momentum during the latter half of 2012, struggled to carry forward the economic pace during the initial months of 2013. China, India, and Indonesia, some of the most populous countries in the region and in the world, faced significant headwinds to growth as key engines of the economy investment, consumption, and exports came under strain.
2013-05-01 00:00:00 There Will Be Haircuts by Bill Gross of PIMCO
It has been the objective of the Fed over the past few years to make even more innovative forms of money by supporting stock and bond prices at cost on an ever ascending scale, thereby assuring holders via a Bernanke put that they might just as well own stocks as the cash in their purses. Gosh, a decade or so ago a house almost became a money substitute. MEW or mortgage equity withdrawal could be liquefied instantaneously based on a never go down housing market. You could equitize your home and go sailing off into the sunset on a new 28-foot skiff on any day but S
2013-04-30 00:00:00 Letters to the Editor by Various (Article)
A number of readers responded to Robert Huebscher’s article, The New Challenges to Reinhart and Rogoff, which appeared last week.
2013-04-29 00:00:00 Developed Asia Pacific: Regional Economic Review by Team of Thomas White International
After facing subdued economic conditions for the most part of 2012, developed Asia Pacific economies started 2013 on a cautious note. While most countries opined that downside risk to GDP growth declined substantially, challenges to growth arose from a recessionary scenario in key developed economies, especially from the European Union.
2013-04-26 00:00:00 The Return of the Asian Tigers: Guinness Atkinson Asset Management Asia Brief by Edmund Harriss, James Weir of Guinness Atkinson Asset Management
Often overlooked by international investors, South East Asia encompasses some of the worlds best performing equity markets in recent years, putting the more established emerging markets in the shade. This performance is backed by good economic results and the favourable demographics of some of these countries, with youthful populations ready to improve productivity and increase consumption. One catalyst for future growth is the Association of Southeast Asian Nations (ASEAN) free trade area, which will bring down trade barriers between the South East Asian nations.
2013-04-26 00:00:00 An Update on the Global Business Cycle by Investment Strategy Group of Neuberger Berman
Understanding where we are in the an important aspect of investing, as the behavior of asset classes may vary throughout that cycle. Recent data indicate that the U.S. remains in its fourth year of expansion, but payroll and retail numbers have disappointed. Outside the U.S., Europe continues to be mired in recession while Chinas growth rebound recently has appeared to sputter. In this edition of Strategic Spotlight, we review what these developments mean for the global business cycle and how to position portfolios accordingly.
2013-04-26 00:00:00 Asia's Reverse Innovation Trend by Beini Zhou of Matthews Asia
In recent years, the rate of acquisitions of local Asian firms by multinational companies has generally increased, particularly in China. This has happened across many industries such as industrials, medical devices and consumer staples. In many cases, if the multinational firms are not acquiring an entire company outright, they are taking a controlling stake, rather than a minority stake as a passive shareholder.
2013-04-26 00:00:00 A Playbook for Investors: How to Shoot, Score, Win by Frank Holmes of U.S. Global Investors
So, in the competitive spirit of the NBA playoff season, I?ve gathered a series of plays that investors can use to shoot, score and win during this year?s market. I?m happy to say they include all the elements of an exciting game, including a comeback kid, an upset and an underdog.
2013-04-24 00:00:00 Growth From the Ground up in Iskandar by Mark Mobius of Franklin Templeton Investments
Our emerging markets team isnt too keen on following crowds. Part and parcel of Templetons contrarian approach is traveling to places others arent, and thinking about the long-term potential in specific industries and companies that may not be on others radar screens. One place weve had our eye on for several years now is Iskandar, Malaysia, which has recently been attracting more investor attention. I think it could be viewed as an example of the potential we see in Southeast Asia.
2013-04-19 00:00:00 Fast Emerging Asia by Taizo Ishida of Matthews Asia
Over the past 20 years, Asia has come a long way to evolve into an asset class in itself. China and India have famously led the way as symbols of emerging nations. But when I think about seeking growth in Asia, I am particularly drawn to the regions smaller equity markets as attractive hunting grounds for investment opportunities. Asia continues to change at a rapid pace, and this change is not restricted to Chinas ever-changing landscape, but to many other areas that may see fewer media headlines.
2013-04-19 00:00:00 F.I.R.S.T.: Bond Market Outlook by Christine Hurtsellers, Matt Toms, Mike Mata of ING Investment Management
Amid heightened political uncertainty in Europe and subdued global growth expectations, global investors owe Hiroki Kuroda a big domo arigato for his pledge to inject about $1.4 trillion into the moribund Japanese economy by the end of 2014. The newly appointed BOJ governor?s unprecedented plan to buy Japanese government bonds,
2013-04-19 00:00:00 India's Gas Sector Dilemma by Siddharth Bhargava of Matthews Asia
In India, the fertilizer sector has long depended on gas as a key input. Over the last decade, several power plants that run on gas have been set up as well. Demand has grown 10% each year since 2002 while supplies, largely managed by state-owned enterprises (SOEs), have failed to keep pace. Inefficient capital allocation, lack of incentives and populist policies aimed at maintaining low prices have led the country to import 25% of its gas needs. This has further exacerbated Indias current account deficit, which now stands at 6.7% of GDP.
2013-04-19 00:00:00 Gold Buyers Get Physical As Coin and Jewelry Sales Surge by Frank Holmes of U.S. Global Investors
Even with the gold price dropping, why are gold coins selling at a premium? Its Economics 101: The coin supply is limited and the demand is high. This buying trend isnt only occurring in the U.S. In Bangkok, Thailand, for example, crowds of buyers were filling stores, eagerly waiting in multiple lines to purchase gold jewelry and coins.
2013-04-18 00:00:00 Emerging Markets Investment Bulletin by Team of Bedlam Asset Management
The benefits of focusing on attractively priced, well managed and growing businesses, irrespective of their inclusion in an index, continued to aid fund performance. Thus it was virtually flat in March, capping a strong quarter in absolute and relative terms with a gain of over 10%, again beating the 5% gain by the index. These - achieved through a combination of a valuation discipline that sets the entry and exit prices and the focus on quality businesses. Not surprisingly, stock selection has been a consistent factor behind the outperformance, both this year and previously.
2013-04-17 00:00:00 Present and Emerging Risks to the Gold Trade by Amit Bhartia, Matt Seto of GMO
The notion of gold as a hedge against systemic risks is flawed. We believe that the concept of golds role as an insurance policy needs to be narrowed significantly.
2013-04-17 00:00:00 What's Driving Emerging Markets? by James McDonald, Daniel Phillips, Phillip Grant of Northern Trust
Emerging market (EM) equities have historically outperformed as the global economy gained momentum, as shown in Exhibit 1. After a great catch-up rally in the second half of 2012, the stocks finished the year as global outperformers only to lose that momentum in the first quarter of 2013. What is behind the recent underperformance, and what does it say about the outlook? Our research points to a number of contributors to the recent weakness.
2013-04-17 00:00:00 Emerging Markets Equity Commentary by Team of Thomas White International
Emerging market equities corrected for the second successive month in March, on concerns that continuing weakness in European demand could hurt export growth for several countries in Asia and Latin America. These economies had seen a revival in their export fortunes during the second half of last year as U.S. consumer demand turned healthier. However, the moderation in U.S. consumer sentiment during March has somewhat dulled the optimism.
2013-04-16 00:00:00 All That Glitters Is Not Gold by Scott Colyer of Advisors Asset Management
This quote from Shakespeares Merchant of Venice is apropos given the nosedive in the gold markets today. In our 2013 Best Ideas piece we labeled gold a neutral as gold had not had a significant correction since 2008. Our research indicated a significant slowing of bullion purchases by gold Exchange Traded Funds (ETFs) in 2012 versus 2011. We looked for a correction and now need to contemplate whether we are in the end of the commodity bull market or merely a pause that refreshes.
2013-04-16 00:00:00 The Asian Economic Crisis and the IMF by Bill O'Grady of Confluence Investment Management
In May 1997, a speculative run against the Thai baht became the first clear signal that a problem was developing in Asia. Over the next three years, Asia and other emerging markets, including Russia and Brazil, were rocked by a historic financial crisis. These nations recovered strongly in the following eight years and generally made it through the 2007-09 global financial crisis in relatively good shape. However, the impact of the Asian economic crisis remains a major factor in the behavior of these emerging nations.
2013-04-15 00:00:00 The (Up) Beat Goes On, Part II by Bob Doll of Nuveen Asset Management
We wrote Part I of this theme on February 11 during the first quarter rally, when the S&P 500 closed the week at 1518. This past week the S&P ended at 1589, after increasing 2.3%. Global stock prices continue to push to new highs and thus provide support for a pro-equity bias. One nuance is that the composition of the equity rally has been abnormally defensive.
2013-04-12 00:00:00 Asia's E-Commerce Evolution by Michael Oh of Matthews Asia
Korea and Japan have been trailblazers in terms of making the virtual marketplace platform, through which merchants and manufacturers of all sizes can sell goods to consumers, an e-commerce model in Asia. Unlike in the U.S. and Europe, where many retailers sell directly to customers from their own websites and handle the details of commerce themselves, most Asian e-commerce takes place on megasites or virtual markets.
2013-04-11 00:00:00 Global Investing in 2013: Policy Dominance, Active Management and a New Paradigm in Currencies by Scott Mather of PIMCO
We expect that the impact of ongoing global policy experimentalism on real economic growth and financial markets will likely vary substantially from country to country, creating both risks and opportunities. With flexible, active global strategies investors can potentially benefit from a broader opportunity set and the ability to go off benchmark in an effort to both avoid risks and tap opportunities.
2013-04-11 00:00:00 Emerging-Market Debt: Pure High-Yield Strategies Come of Age by Marco Santamaria of AllianceBernstein
We believe investors should be thinking about emerging-market debt in terms of credit quality buckets (investment grade or high yield) rather than sectors (sovereign or corporate). For some types of investor, pure high-yield strategies can offer significant advantages.
2013-04-10 00:00:00 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn
Stocks were slightly lower last week as the troubles in Europe, Asia (Japan & North Korea) dovetailed with a really lousy employment report here at home on Friday.
2013-04-10 00:00:00 Pacific Basin Market Overview by Team of Nomura Asset Management
Supportive U.S. economic data drove most markets higher during the first quarter of 2013. China underperformed the region amid concerns that the economic recovery may not be as robust as previously expected, while the National Peoples Congress in March failed to provide any incentives to the equity market given the absence of pro-growth policies. The MSCI AC Asia Pacific Free Index including Japan gained 5.5% while the MSCI AC Asia Pacific ex Japan Free Index closed 2.0% higher during the quarter.
2013-04-09 00:00:00 PIMCO Cyclical Outlook for Asia: How Leadership Changes Are Shaping Asia's Outlook by Q&A with Ramin Toloui, Tomoya Masanao and Robert Mead of PIMCO
For Asia, slow but not slowing global growth will likely keep external demand neutral, and policy developments will therefore help shape the economic outlook. In Japan, we see a significant boost to aggregate demand coming from the concerted monetary and fiscal expansion of the new Abe government. In China, concerns about inflation, housing market excesses, and long-term financial stability are prompting policy restraint that should keep growth below 8% this year.
2013-04-09 00:00:00 The Return of the Ottomans by Bill O'Grady of Confluence Investment Management
Over the past two weeks, Turkey has taken two significant actions. First, while President Obama was visiting the region, Israeli PM Netanyahu offered Turkey an apology for the 2010 commando raid on the MV Mavi Mamara, a Turkish ship that was delivering aid to the Gaza Strip. The vessel was trying to run an Israeli blockade, which was put in place to prevent the region from receiving arms shipments. In the raid, nine people on the Turkish ship died, including eight Turks and one American. Ten Israeli commandos were wounded.
2013-04-08 00:00:00 The Theology of Inflation by John Mauldin of Millennium Wave Advisors
We begin this week with a simple pop quiz. Is inflation good or bad? Answer quickly. I?m sorry your answer is wrong. Or rather, we can?t know if your answer is right or wrong because we are not sure what is meant by the question. We may think we know and we may be right but we can?t be sure, because the word inflation has different meanings for different people in different places and different times. In fact, even the same people in the same place and time can?t agree on a precise definition.
2013-04-05 00:00:00 Could Consumers Change Japan's Tide? by Team of Matthews Asia
This year, investor attention has focused on Japan and its macroeconomic policy with hopes that rising inflation expectations might spur businesses to invest and consumers to spend. Since Prime Minister Shinzo Abe and Japans ruling Liberal Democratic Party (LDP) regained power late last year and proposed more aggressive monetary policies, including an ambitious inflation target, the yen has weakened more than 20% against the U.S. dollar and more than 15% against the euro.
2013-04-05 00:00:00 China's Uncertainties Won't Stop Renminbi's Rise by Hayden Briscoe of AllianceBernstein
Recent data releases and the transition to new political leadership have created some uncertainty about Chinas short-term economic outlook. While positive growth surprises are unlikely in 2013, we still think nothing can stop the long-term appreciation of Chinas currency, the renminbi (RMB).
2013-04-04 00:00:00 Absolute Return Letter: The Need for Wholesale Change by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners
The seeds of the next crisis have probably already been sown as a consequence of the lax monetary policy currently being pursued. Frustrated with the lack of direction from political leaders, most recently witnessed in the handling of the crisis in Cyprus which was a complete farce, central bankers from around the world are likely to demand change, but politicians will have to be pushed into a corner before they will respond to any such pressure. Hence nothing decisive will happen before the next major crisis erupts.
2013-04-04 00:00:00 Teachings from Recovered Markets by Richard Michaud of New Frontier Advisors
Domestic indices all-time record highs indicate that U.S. domestic equity markets have largely recovered from the 2008 Great Recession. It may have taken four years but it still seems a remarkable achievement given the Dows low of 6620 in March 2009. It is worth noting that prior highs were attained in an era with a poor savings rate and wide use of levered strategies. The last four years were widely characterized by a low return market mantra and fear of equities stoked by many doomsayers, pundits, and strategists who greeted every upturn with pessimism.
2013-04-03 00:00:00 When Does The Great Recession Become the Great Rotation? by Gene Tannuzzo of Columbia Management
Given the strong flows into the bond market over the past few years, many pundits have pondered the beginning of the Great Rotation when bond investors begin to move money into the equity market. Investors fear that this shift could cause losses in bond funds as investors flee. Indeed since the start of the Great Recession in 2008, investors have plowed into bond funds as an alternative to equity volatility.
2013-04-03 00:00:00 A Man in the Mirror by Bill Gross of PIMCO
Am I a great investor? No, not yet. To paraphrase Ernest Hemingways Jake in The Sun Also Rises, wouldnt it be pretty to think so? But the thinking so and the reality are often miles apart. When looking in the mirror, the average human sees a six-plus or a seven reflection on a scale of one to ten. The big nose or weak chin is masked by brighter eyes or near picture perfect teeth. And when the public is consulted, the vocal compliments as opposed to the near silent/ whispered critiques are taken as a supermajority vote for good looks.
2013-03-28 00:00:00 China Talks of Trimming the Fat by Winnie Chwang of Matthews Asia
Chinas new leaders are talking tough about fighting government corruption and imposing a culture of frugality among Communist Party cadres. Sensitive to growing criticism about government excess, incoming President Xi Jinping has promised to crack down on officials who abuse their power and engage in illicit behavior, regardless of their rank.
2013-03-27 00:00:00 What Happened to That Export-Led Recovery? by Mike Amey of PIMCO
With nearly 50% of the UKs total exports going to Europe, an economic area constantly flirting with its own recession, it is no surprise to see that UK trade performance has been challenged.As the US continues to re-heal, and trade becomes more geographically diversified, we should see exports start to grow once more, albeit off a modest base. The easing in sterling is undoubtedly welcome and will improve prospects for exports, but it is unlikely to be a game changer.
2013-03-26 00:00:00 A Cry for Help from Income Investors by Legg Mason Global Income Survey (Article)
Confronted with the stark realities of income investing now, affluent investors all over the world are rethinking their approach, notes Legg Masons just-released Global Income Survey. Yet the Survey also found income investors hungry for more knowledge and ideas -- creating opportunities for savvy financial advisors.
2013-03-22 00:00:00 K-Pop Culture by Soo Chang Lee of Matthews Asia
During my last trip to Seoul, I had meetings with several media companies that left me feeling more confident about the strength of Koreas popular culture as an emerging growth driver for the country. The rapid growth of South Korean pop music, or K-pop, across the media and entertainment industries has been helped not only by Koreas strong culture of social media, but also by a broader and more global breadth of production. Last years hit single Gangnam Style and accompanying video by artist PSY is one such memorable phenomenon that crossed int
2013-03-22 00:00:00 In Gold We Trust by Frank Holmes of U.S. Global Investors
Poorly thought out government policies hurt the formation of capital and destroy people?s trust in paper money. Leaders may have good intentions, but some of their actions show disrespect for private property and individualism. This only reemphasizes gold as an important asset class.
2013-03-20 00:00:00 Global Real Estate StocksTime to Get Out? by Eric Franco of AllianceBernstein
Real estate stocks have now rebounded from the crash during the global financial crisis. But we think valuations are still reasonable, especially as property fundamentals continue to improve in key markets.
2013-03-19 00:00:00 Keeping Up With Changes In Emerging Market ETFs by Jun Zhu of Leuthold Weeden Capital Management
In this report, we highlight benchmark changes in a major player, a potential substitute (with cheaper fees) for another major player, a new player with an innovative weighting scheme and provide an overview of the Emerging Market ETF space available to investors.
2013-03-18 00:00:00 Finding the Sweet Spot by Mark Kiesel of PIMCO
Where is the investment sweet spot in todays global financial markets? The uneven global growth outlook means there are opportunities and risks for both credit and equity investors.
2013-03-18 00:00:00 Outlook for the Yen by Team of Nomura Asset Management
For several quarters ahead, we estimate that the Yen will remain range bound near the level of PPP (purchasing power parity), which is estimated to be between 90 to 95 Yen/USD. Though currency movements will be affected by various factors, we think the monetary policies of both Japan and the U.S. are the most important.
2013-03-15 00:00:00 Emerging Markets Equity Commentary by Team of Thomas White International
Emerging market equities saw a moderate correction in February, broadly similar to the rest of the world. Prices reacted negatively to renewed concerns of a worsening European fiscal crisis as the results of the recent Italian elections turned out to be inconclusive.
2013-03-15 00:00:00 Whats Next, Mr. Finance Minister? by Sudarshan Murthy of Matthews Asia
Every February, Indias federal government releases its annual budget to outline revenues and spending plans. In the years following Indias independence in 1947, when government-owned enterprises dominated the economy, the budget was of utmost importance to market watchers. With the countrys economic liberalization in the early 1990s, the significance of this annual budget process diminished somewhat. However it is still meaningful, and this years budget exceeded US$300 billion in expenditures.
2013-03-14 00:00:00 Newsletter by Harold Evensky of Evensky & Katz
In the latest edition of his client newsletter, Harold Evensky highlights a number of interesting bits of news, including a must-see destination for your friends, your kids and your grandkids, some advice from Warren Buffett, a tip from Albert Einstein and the latest data on hedge fund performance.
2013-03-14 00:00:00 Global Currency Battles: A Waiting Disaster or a Win for All? by Team of Knowledge @ Wharton
To many, Japans recent moves to devalue the yen looked like the spark that could ignite a global currency war -- a series of competitive devaluations that, last century, helped plunge the world into the Great Depression. Until now, central bankers have been resisting the urge to politicize exchange rates. However, while currency skirmishes can be dangerous and require monitoring, they are also necessary for establishing equilibrium in markets and will help in the global economic recovery, some experts say.
2013-03-13 00:00:00 Argentina on Sale by John Mauldin of Millennium Wave Advisors
(From Cafayate, Argentina) There are some who worry whether the path that Argentina has taken to monetary ruin on multiple occasions (and that it seems intent on taking again) is one that the US may also find itself on. That worry has crossed my mind a few times, I must confess. Today we will look at Argentina more in depth. From a monetary perspective, it deserves attention. And once again there will be opportunity.
2013-03-12 00:00:00 Pacific Basin Market Overview February 2013 by Team of Nomura Asset Management
Monthly returns for February 2013 were somewhat mixed, but the Pacific Basin regional markets generally ended in positive territory this month. Outside of Asia, political instability in Italy and concerns that the Federal Reserve might begin to scale back its monetary stimulus in the U.S. led to weaker investor sentiment. Economic data from China was weak, largely due to the effect of the Chinese New Year.
2013-03-12 00:00:00 U.S. Dominates World Markets for the Trifecta by Douglas Cote of ING Investment Management
While large-cap indices get all the headlines, mid and small caps have continued to excel. Frontier markets have picked up the slack as major emerging markets stumble. Global risks persist, though U.S. fundamentals appear solid. The move toward U.S. energy independence should soon result in a trade surplus, boosting GDP.
2013-03-12 00:00:00 The 2030 Increasing Inequality Scenario by Bill O'Grady, Kaisa Stucke of Confluence Investment Management
Last month we started looking at the 2030 alternative world development scenarios as laid out by the National Intelligence Council (NIC). The NIC forecasts the likely paths that are either currently underway or are forecast to occur in the future. In its most recent report, the NIC projects four possible global political and economic states based on expected trends. Last time, we presented the most likely best case scenario. This week, we will explore the third scenario, under which the world gets wealthier as a whole, but inequalities increase.
2013-03-08 00:00:00 The Hustle of Hong Kong by Colin Dishington of Matthews Asia
The strength of the retail environment in Hong Kong has been well documented, but the scale of shopping malls sprawling through large parts of the city is somewhat staggering. In the more central districts, product offerings tend to cater to the high-end crowd with luxury international brands apparent on every street corner.
2013-03-07 00:00:00 Guanxi, Mianzi, and Business: The Impact of Culture on Corporate Governance in China by David Smith of Aberdeen Asset Management
There are two key cultural and sociological issues of particular importance when evaluating Chinese companies: guanxi (relationships and networks) and mianzi (face). When analyzing the potential of a Chinese company, it's important to understand how guanzi and mianzi affect transactions, board composition and deliberations, and shareholder engagement, among other issues.
2013-03-07 00:00:00 A New Chapter for Turkey? by Frank Holmes of U.S. Global Investors
In 2012, Turkey was the best performer among the emerging markets we track on our Periodic Table showing a decade of returns. All developing countries rose last year, but stocks in Turkey climbed an astounding 56 percent.
2013-03-06 00:00:00 U.S. Sequester: How Significant is it for the Global Economy? by Team of Thomas White International
Since the U.S. has been one of the brightest spots in the current global economic environment, any negative development that restricts activity in the U.S. could have a magnified impact on the economic prospects for the rest of the world.
2013-03-01 00:00:00 Health Is Wealth: Health Care Spending As An Emerging Market Growth Engine by Amit Bhartia, Alvaro Pascual of GMO
Amit Bhartia and Alvaro Pascual, members of GMO's Emerging Markets Equity team, write to institutional clients in a new white paper about the correlation in emerging markets between public healthcare spending and domestic consumption.
2013-03-01 00:00:00 Is China's Health Care on the Mend? by Sherry Zhang of Matthews Asia
Despite the many challenges facing Chinas health care sector, I believe the recent initiatives and the markets continued growth could create many future investment opportunities in areas ranging from medical device manufacturing, insurance, pharmaceutical and a range of general and specialized care facilities.
2013-03-01 00:00:00 Greetings from Istanbul! by Frank Holmes of U.S. Global Investors
As I travel around Turkey, I am reminded how vital good government policies are to the health of a nation. Following a decade of fiscally responsible actions, Turkey is the picture of a growing prosperity. Perhaps Americas elected officials could take a tip from this vibrant country overseas.
2013-02-27 00:00:00 Love, Money or Disappointment: What Will Asian Credit Investors Find in Their Red Envelopes? by Robert Mead, Raja Mukherji of PIMCO
Our cyclical economic outlook for Asia in 2013 is unusually dependent on breakthroughs in structural policies. Although we continue to favor select opportunities in key sectors, in general Asian credit spreads are trading historically tight. Bottom-up research is critical, along with careful top-down views on shifting economic conditions, and investors need adequate compensation for taking credit risk. Some sectors and companies can grow significantly faster than their respective economies.
2013-02-26 00:00:00 Global Investment Review First Quarter 2013 by Team of Bedlam Asset Management
At the beginning of last year the prospects for capital markets were grim yet the results surprisingly good: positive returns and modest economic growth. The cause was central banks in developed countries acting as a backstop for sovereign and other large debts, through direct purchasing funded by accelerated money printing. This also ensured low interest rates. Subsequently, mountainous debt problems are slowly being tackled, even as they appear to increase.
2013-02-26 00:00:00 Horse Feathers by Michael Kayes of Willingdon Wealth Management
While wisdom and experience are certainly very important to long-term investment success, I do believe it is also necessary to begin each day with an open mind. Flushing the senses, so to speak, allows new information to be processed through an unbiased filter. In short, markets change, and investment thinking must be adaptable.
2013-02-25 00:00:00 Dodging the bullets by Team of Bedlam Asset Management
Although the year is barely a month old there are already signs that the long-awaited rotation out of the perceived safety of bonds and into inflation-proofed equities may have begun. Given the dismally low yields on offer it seems likely that, at the very least, it is the beginning of the end of the bond market bubble. Some of the biggest bubbles in the bond market, and thus most at risk from a sell-off, are in high yield and emerging market debt.
2013-02-22 00:00:00 Emerging Markets Outlook: Will Emerging Markets Continue Their Run in 2013? by Scott Klimo of Saturna Capital
A number of times we have been asked whether emerging markets will continue their run in 2013. Our response typically begins with the following clarification: "Emerging markets" may be a handy way to refer to the countries that constitute a generally recognized asset class, but this group is far from monolithic. Widely differing levels of development, economic drivers, opportunities to invest, and returns exist under the emerging markets umbrella. For this reason it's not entirely correct to imply that "emerging markets" had a run in 2012.
2013-02-22 00:00:00 Finding What's Real in Real Estate by Team of Franklin Templeton Investments
The U.S. financial crisis in 2008-2009 left many investors with a reluctance to take investment risks, particularly those related to any of the world's wilted housing markets. However, as your local real estate agent would likely tell you, the market in one location can be vastly different than it is in another. Wilson Magee, co-manager of Franklin Global Real Estate Fund would agree that the adage "location, location, location" applies not only to individual home buyers and sellers, but to investors seeking opportunities in the commercial real estate sector, too.
2013-02-22 00:00:00 Only Do What Only You Can Do by Satya Patel of Matthews Asia
Sri Lanka is a tiny country of approximately 21 million people, with roughly the same population as the city of Mumbai and a total land mass nearly as big as Ireland and slightly bigger than the U.S. state of West Virginia. Despite being diminutive relative to other Asian countries, exports are an important part of Sri Lanka's economy, just as they are for its neighbors.
2013-02-22 00:00:00 A Test of Strength for Gold by Frank Holmes of U.S. Global Investors
This week, we saw the gold bears growling louder and gaining strength, as the worlds largest gold-backed ETF, the SPDR Gold Trust, experienced its largest one-day outflows since August 2011. The Fear Trade fled the sector following the Federal Reserves meeting that revealed a growing dissension among some of its members over the central banks bond-buying program.
2013-02-21 00:00:00 Tapping China's Growth via Dividends by Yu Zhang of Matthews Asia
When the long-term historical performance of global equity markets is considered, investors can see that the contribution of dividends to total return is significant. In this regard, China has been no exception. Between 1999 and 2012, 46% of the total return of the MSCI China Index was derived from dividends received and reinvested. This month, Yu Zhang, CFA, explores the ways in which a dividend-investing approach can be an effective investment strategy in China.
2013-02-20 00:00:00 The 2030 Most Likely Best Case Scenario by Bill O'Grady Kaisa Stucke of Confluence Investment Management
Two weeks ago we started looking at the 2030 alternative world development scenarios as laid out by the National Intelligence Council (NIC). The NIC forecasts the likely paths that are either currently underway or are forecast to occur in the future. In its most recent report, the NIC projects four possible global political and economic states based on these expected trends. Last time, we presented the most likely worst case scenario. This week, we will explore the most likely best case scenario.
2013-02-20 00:00:00 Whatever It Takes by John Mauldin of Millennium Wave Advisors
Was it only a few years ago I visited the Emerald Isle of Ireland? The collapse of its largest banks foreshadowed the demise of many other European banks that had borrowed money from British, German, and other European banks to lend against homes and property. The Irish government had to guarantee deposits and bond holders in order to prevent a bank run. I think I am correct when I state that the Central Bank of Ireland was the first central bank to avail itself of large-scale use of the Emergency Liquidity Assistance (ELA) provision of the European Central Bank.
2013-02-16 00:00:00 When It Comes to Gold, Stick to the Facts by Frank Holmes of U.S. Global Investors
During short-term gold corrections, its much more important to focus on the facts, including the fact that gold is increasingly viewed as a currency. Rather than buying real estate, lumber or diamonds, central banks around the world are buying gold. According to the World Gold Council (WGC), over 2012, central bank demand totaled 534 tons, a level we have not seen in nearly 50 years.
2013-02-16 00:00:00 The Squeeze: Reassessing the Japan/Korea/China Manufacturing Nexus by John Longhurst of PIMCO
If the yen settles between 95 and 100 to the dollar, it could be a game changer for Japanese companies which have restructured to become profitable at 75 yen to the dollar. Some Korean companies, especially those in heavy industry, may be squeezed by intensified Japanese and Chinese competition. We expect Korean firms to fish in profit pools in businesses related to their core competencies, chiefly to the detriment of Asian and European competitors.
2013-02-15 00:00:00 Latest OECD Data Shows Global Economy in State of Flux by Steve Rumsey of Optimus Advisory Group
According to the OECD ("Organisation for Economic Co-operation and Development"), the US economy managed to stage a leading indicator "rally" into the most favorable northeast quadrant. The red six month lagging tail on the graph clearly shows the economic leading indicators moving from expansion to slowdown, only to move back to the expansion quadrant in late 2012.
2013-02-15 00:00:00 International Equity Commentary January 2013 by Team of Thomas White International
International equity prices sustained the uptrend in January, helped by data releases that supported the growing optimism over healthier global economic growth. Though the U.S. and U.K. economies declined unexpectedly during the fourth quarter of last year, the pace of growth improved in several Asian countries, including China, during the period.
2013-02-15 00:00:00 China's New Year for Shopping by Sherwood Zhang of Matthews Asia
This week's Lunar New Year celebration, also known as the Spring Festival in China, is not only a time of tradition for families during which they reunite over a feast, it is also one of the busiest shopping seasons of the year. As with Christmas in the West, the Spring Festival is a time of gift giving for friends and relatives. Children receive money in red envelopes as part of the tradition and stores often hold large-scale holiday sales to attract shoppers.
2013-02-15 00:00:00 Thailand: Land of the Smiles by Mark Mobius of Franklin Templeton Investments
China and India may be Asia's largest economies, but they aren't the only countries with growth potential on the continent. Southeast Asian countries can also offer compelling investment opportunities. Thailand, known as the land of the smiles because of the expression its natural beauty and friendly people inspire, is a country where we believe the economic prospects could give investors reasons to smile too.
2013-02-14 00:00:00 Pacific Basin Market Overview January 2013 by Team of Nomura Asset Management
Improving expectations for global economic growth underpinned a solid start to 2013 for the Asia Pacific equity markets. In Asia, interest focused on China, as economic data showed further signs of recovery. On the other hand, the depreciating Japanese yen drew concerns that Asia's main exporters, which include Korea and Taiwan, will become relatively less competitive. The MSCI AC Asia Pacific Free Index including Japan gained 3.0% while the MSCI AC Asia Pacific ex Japan Free Index closed 2.6% higher during the month.
2013-02-13 00:00:00 Concerned by Recent Economic Data? Look Closer by Marco Pirondini of Pioneer Investments
We've seen a lot of GDP data recently that, at first look, may seem a bit concerning. But if we take a moment for analysis, much of the news is actually good for the economy and the markets.
2013-02-08 00:00:00 A More Savvy Insurance Market by Tarik Jaleel of Matthews Asia
During my last visit to Hong Kong, I attended a conference to discuss various opportunities in financial services along with industry experts and executives from both Asian and global institutions. The key theme that emerged from the event was how Asia is typically viewed as the world's primary growth market in this important sector, particularly given the slowdown in Europe and the regulatory environment in the U.S.
2013-02-08 00:00:00 A Different Playbook by Equity Investment Team of Janus Capital Group
Asia's handset market is developing quite differently than in Europe or the U.S., creating an entirely different playing field for Apple and other handset makers. Major brands are being challenged by the rise of cheap, but very capable generic smartphones. If major brands cannot innovate above and beyond the new offerings of these emerging cheap smartphones, they will not be able to command the high prices, and corresponding high profit margins, that have underpinned their success.
2013-02-08 00:00:00 Out With the Dragon In With the Snake by Frank Holmes of U.S. Global Investors
Over 2013, we expect the Chinese government to continue its accommodative efforts, which should reinforce the equity rally. In addition, the new pyramid of power is focused on growth, as it seeks to improve and reform policies that will provide its residents with opportunities and social security, increase incomes and raise standards of living, which should encourage domestic consumption. Growth is set to be considerable over the next several years.
2013-02-05 00:00:00 Australia in the Asian Century by Team of Thomas White International
Early in 2011, The Economist magazine ran a cover story titled 'The Next Golden State.' The title, incidentally, referred to Australia. Today, Australias citizens enjoy some of the highest standards of living anywhere in the world. With a real income of $62,000 per person in 2012, the country ranked 13th worldwide. Five of the ten best livable cities in the world are in Australia. But, for all its advantages, the country's contribution to the world economy in absolute terms is small. It accounted for just over 1 percent of world GDP in 2011.
2013-02-05 00:00:00 Currency War or Something Altogether Different? by Niels Jensen, Nick Rees,Tricia Ward of Absolute Return Partners
"Who is afraid of currency wars?" asks Gavyn Davies in the FT. I have known Gavyn for 25 years and have to confess that he is way out of my league intellectually. He is one of the smartest people I have ever met and, thankfully, also one of the humblest. He rarely gets things wrong so, when I occasionally disagree with him, it always makes me slightly uneasy.
2013-02-04 00:00:00 A Gross Underestimate by Jonathan Coleman, Soonyong Park of Janus Capital Group
As we enter 2013, we felt it would be an appropriate time to revisit one of last years most controversial predictions of future equity performance. We acknowledge that equities in general may not continue to deliver the same real rate of return they have over the last century; however, we believe the glum outlook for the asset class forecasted by Bill Gross last year misses the mark. Our estimates of future equity returnsbased on three different approachesall point to a meaningfully higher forecast than Gross' pessimistic prediction.
2013-02-04 00:00:00 2013 Annual Forecast by Clyde Kendzierski of Financial Solutions Group
It's that time again. January will be over by the time you read this which means we are out of holiday excuses or "just ramping up for the new year" reasons for not getting back to work. Having said that, I'd like to offer my excuse for the Annual Forecast getting to you in February instead of the first week of the year. Hand over my heart, we started early this go-round.
2013-02-01 00:00:00 Q412 Portfolio Commentary by Jay Compson of Absolute Investment Advisers
While much of the fundamental picture has played out as we expected over the past 18-24 months, the financial markets appear to be concerned solely with the existence or non-existence of macro headlines and events. There seems to be a disconnect between market movements and fundamentals which means doing real work based on intellectual honesty and logic puts you at a disadvantage. Chasing momentum and profiting from central bank market manipulation appear to be the current winning strategies.
2013-02-01 00:00:00 Monthly Investment Bulletin by Team of Bedlam Asset Management
Financial discipline is collapsing and with it, trust in the value of money. Many heavyweight thinkers in America, such as Nobel laureate Paul Krugman have suggested that a solution to avoid national debt ceilings imposed by Congress would be to mint a trillion dollar platinum coin. Meanwhile, heavyweights close to policy makers in Britain and Japan have been musing whether their central banks should write-off the mountains of government bonds they have bought recently.
2013-02-01 00:00:00 A Gross Underestimate by Jonathan Coleman and Soonyong Park of Janus Capital Group
The glum outlook for the asset class forecasted by Bill Gross last year misses the mark. Our estimates of future equity returnsbased on three different approachesall point to a meaningfully higher forecast than Gross pessimistic prediction.
2013-02-01 00:00:00 Protests of the Common Man by Sunil Asnani of Matthews Asia
At times, some recent protests have been criticized for a lack of organization and demands that may seem irrational such as the death penalty for juvenile suspects of serious crimes. But for all their faults, Indias recent demonstrations are an essential step toward a more participative democracy, and may help to spur an overhaul of the countrys judicial and administrative machinery that I believe has not kept pace with its economic development.
2013-01-31 00:00:00 Hasenstab: Little Value in U.S. Treasuries Right Now by Team of Franklin Templeton Investments
The financial markets may have let out a collective sigh of relief on January 1 when U.S. politicians managed to avoid falling off the fiscal cliff, but the fact is the fundamental issue plaguing the U.S. still hasn't been addressed mounting debt. As a result, Dr. Michael Hasenstab, co-director of the International Bond Department and portfolio manager for the Templeton Global Bond Fund, says he doesn't see much value in U.S. Treasuries right now. He does see it elsewhere in the world, though, including Ireland and select emerging markets where fiscal houses appear in much better order.
2013-01-25 00:00:00 Americas: Regional Economic Review 4Q 2012 by Team of Thomas White International
The outlook for most economies in the Americas region improved during the fourth quarter as domestic consumption growth was sustained and the anticipated revival in global demand has lifted the prospects for export growth this year. Partly helped by fiscal and monetary policy measures introduced since 2011, consumer demand has held up across most countries in the region.
2013-01-25 00:00:00 Resource Investors: Why You Can Expect Sunnier Days Ahead by Frank Holmes of U.S. Global Investors
During the current commodity supercycle, there have been occasionstoo many to countwhen investor psyche has been damaged by reports about slowing U.S. growth, a hard landing in China or a debt crisis in Europe. Yet just behind the gloom, significant and positive trends are taking hold, causing the storms to start dissipating.
2013-01-25 00:00:00 The Case for Japan with a Caveat by Russ Koesterich of iShares Blog
While Im optimistic that Japanese stocks can move higher in coming months, Id advocate investing in them only if dollar-based investors have the flexibility to hedge the currency effect of a weaker yen (more on that below). So with that caveat out of the way, here are four reasons why I think Japanese stocks can move higher in the near term.
2013-01-25 00:00:00 Japan: Another Season of Downturn Abe? by Milton Ezrati of Lord Abbett
The returning prime minister is trying to spark the moribund economy with the same old remediesbut bolder action is needed.
2013-01-24 00:00:00 German Gold Claw Back Causes Concern by John Browne of Euro Pacific Capital
Last week the Bundesbank (the German central bank) surprised markets around the world by announcing that it will repatriate a sizable portion of its gold bullion reserves held in France and the United States. To many, the news from the world's second largest holder of gold signaled a growing, if clandestine, mistrust among central banks, possibly fueled by diverging policy goals. The Germans have attempted to tamp down the alarm by highlighting the myriad of logistical, practical and historical reasons that qualified the announcement as unremarkable.
2013-01-24 00:00:00 Emerging Asia Pacific: Regional Economic Review 4Q 2012 by Team of Thomas White International
Emerging Asia Pacific economies showed strong signals of a rebound in economic activity amidst generally rising exports and stabilizing inflation. While some major economies like China, which had cut interest rates throughout 2012 to stimulate the economy, saw a mild resurgence in inflation, many countries like South Korea, Taiwan, Malaysia and Philippines saw inflation stabilize significantly during the quarter. Still, India, the region's second largest economy, continued to be troubled by rising prices despite high interest rates.
2013-01-23 00:00:00 Economic Backdrop Supports Stocks, Credit Sectors and Munis by Russ Koesterich of BlackRock Investment Management
Thanks to solid earnings, some decent (if mixed) economic news and indications that the debt ceiling debate may be delayed slightly, stocks posted additional gains last week, continuing their strong start to 2013. For the week, the Dow Jones industrial average climbed 1.2% to 13,649, the S&P 500 index advanced 1.0% to 1,485 and the NASDAQ composite rose 0.3% to 3,134. Bonds have remained relatively steady, with the 10-year Us treasury closing the week at a yield of 1.84%, two one-hundredths lower than the previous Friday close.
2013-01-23 00:00:00 Developed Asia Pacific: Regional Economic Review - 4Q 2012 by Team of Thomas White International
Developed Asia Pacific economies witnessed mixed economic fortunes during the fourth quarter of 2012. While the group's largest economy, Japan, suffered from stubborn deflation and slumping trade due to a bitter territorial dispute with China, Singapore and Hong Kong managed to fare better.
2013-01-22 00:00:00 Ten for '13 by Investment Strategy Group of Neuberger Berman
Last year, despite the noise surrounding the U.S. elections and the ongoing European debt crisis, the main drivers of asset prices arguably were the large-scale bond-buying programs put in place by global central banks to alleviate systemic pressures. In 2013, we anticipate fewer aggressive central bank actions as the pace of global growth gradually picks up. We believe the largest influential factors to our outlook are premature fiscal tightening in the U.S. and a potential resurgence of eurozone problems.
2013-01-22 00:00:00 Puppet Show by John Hussman of Hussman Funds
What's fascinating is that in the presence of what are not thin strings, but massive cables supporting the economy like a puppet, the only response that Wall Street can muster is "Hey! He's walking!" as if the puppet is capable of motion without being propped up to a nearly reckless extent.
2013-01-18 00:00:00 2013 International Outlook by Colin Moore of Columbia Management
We continue our outlook for 2013 with a review of select international economies and financial markets. Similar to the U.S. the road to recovery will be bumpy and we expect financial markets to continue being affected by macroeconomic uncertainties. While the overall environment remains uncertain, some of the significant headwinds in 2012, e.g. the Chinese leadership transition and a complete disintegration of the eurozone, are perhaps less concerning for markets than they were a year ago.
2013-01-18 00:00:00 The Allure of Panda Coins by Teresa Kong of Matthews Asia
While I waited in another long line in San Francisco International Airport recently, I struck up a conversation with the gentleman behind me. It turned out we were both returning from research trips in China. But rather than being an investor of securities as I am, this fellow traveler was an investor in Chinese coins, specifically, panda coins.
2013-01-18 00:00:00 4 Sensational Facts About Gold Investing That You Might Not Know by Frank Holmes of U.S. Global Investors
1. Gold has been a consistent performer over the decades. 2. Gold should remain a hot commodity in 2013. 3. Gold is the least volatile commodity on the table. 4. The last four years were better than you thought.
2013-01-17 00:00:00 International Equity Commentary December 2012 by Team of Thomas White International
International equity prices made robust gains in December, as further improvement in economic trends across most regions lifted the outlook for 2013. Policymakers in the U.S. managed to put together an agreement at the last minute and averted the 'fiscal cliff', one of the major risks that had restricted investor sentiment during earlier months. In Europe, though economic signals remain largely weak, the further fall in bond yields of the troubled countries has helped sustain optimism about resolving the region's fiscal crisis this year.
2013-01-16 00:00:00 Global Economic Overview - December 2012 by Team of Thomas White International
The global economic outlook brightened further in December, as economic data from most regions indicated sustained, though moderate, improvement in both domestic and external demand. Europe showed further signs of stabilization in the financial markets, as bond yields of the most troubled countries continued to decline in response to the earlier assurance by the European Central Bank (ECB) to buy unlimited quantities of sovereign bonds.
2013-01-16 00:00:00 The Rise of Asia's REITs by Sherwood Zhang of Matthews Asia
Real estate investment trusts (REITs) in Asia are following in the footsteps of their U.S. counterparts as they become an increasingly important asset class attracting investors looking to gain exposure to a diversified pool of real assets and relatively high yields. In the past decade, REITs have become a growing force in the regions investment universe. This month Sherwood Zhang, CFA, takes a look at just how far Asia's REIT markets have come, and what new opportunities as well as risks may still exist.
2013-01-15 00:00:00 Demographics and the Decline of Equity Mutual Funds by Paul Franchi (Article)
Until the last few years, mutual fund flows followed performance. Recently, however, money has flowed disproportionately into bond funds and out of US equity funds despite a strong rally in the equity markets. Changing demographics explain this shift, which has important implications for advisors and the mutual fund industry.
2013-01-15 00:00:00 Japan: Tip of the Spear by Bill O'Grady of Confluence Investment Management
On Sunday, December 16, 2012, Shinzo Abe, the leader of the Liberal Democratic Party (LDP), led his coalition to a decisive electoral victory in Japan. The LDP won 294 out of 480 seats and, with the additional 29 seats captured by its coalition partner, the New Komeito Party, will control the lower house in the Japanese Diet. Abe was named the new prime minister ten days later.
2013-01-15 00:00:00 Emerging Markets Equity Commentary: December 2012 by Team of Thomas White International
Emerging market equities outperformed during the month of December, helped by signs of further improvement in the economic growth outlook. Economic data released over the month were largely positive for most emerging countries, and strengthened the optimism that these markets could see a moderate improvement in growth rates during 2013.
2013-01-14 00:00:00 The More Things Change... by Liz Ann Sonders, Brad Sorensen, Michelle Gibley of Charles Schwab
One crisis averted...another one on the way? Of course, but we're still positive on the US economy and stock market.
2013-01-11 00:00:00 Special Edition: The Outlook for 2013 by Team of Northern Trust
At this time of the year we typically get warm and generous wishes for the New Year and, of course, numerous questions about what our crystal ball has in store for 2013. While many economists publish their perspectives prior to January 1, we opted to wait in the hope of having a clear fiscal picture for the United States. A lot of good that did us...
2013-01-11 00:00:00 On the Road in India by Mark Mobius of Franklin Templeton Investments
India appears to be on its way to becoming a major market for motor vehicles. Annual car and truck sales currently in India are roughly one third of the 15 million units produced in the U.S., but the pace of growth has been high. The total population of registered motor vehicles in India numbered more than 100 million in 2008- 2009, with consumer vehicles (passenger cars, motorcycles and scooters) accounting for about 4/5 of the total.
2013-01-11 00:00:00 New Year's Vantage Point: Norm Boersma by Norman Boersma of Franklin Templeton Investments
As we ring in a new year, it's a good time to gain some perspective on where we've been, and where we might be headed. Norm Boersma, CFA, chief investment officer of Templeton Global Equity Group, takes a look at the current headwinds facing the global equity markets, from fiscal imbalances to growth challengesand how market uncertainty can result in market mispricings.
2013-01-11 00:00:00 Abe's Return May Prod Japan Forward by Kenichi Amaki of Matthews Asia
Japan's politics have entered 2013 with a mixed freshness. Former Prime Minister Shinzo Abe has clinched a rare second shot at the prime minister's post. His first term, which began in late 2006, lasted only about a year and ended with his sudden resignation. But following its landslide victory last month, his Liberal Democratic Party (LDP) has secured a two-thirds majority in the 480-seat Lower House, giving it the constitutional power to override Upper House opposition, where no single party holds a majority, on almost all issues.
2013-01-11 00:00:00 Pacific Basin Market Overview - December 2012 by Team of Nomura Asset Management
Equity markets ended the year on an upbeat note, shrugging off concerns over the impending "fiscal cliff" while focusing on better economic data from the U.S. and China. In Japan, expectations of a higher inflation target and a depreciating yen brought some overseas investors back to the Tokyo stock market. The MSCI AC Asia Pacific Free Index including Japan gained 5.6%, while the MSCI AC Asia Pacific ex Japan Free Index also closed 5.6% higher in the October-December quarter of 2012.
2013-01-10 00:00:00 A New Years Vantage Point: Michael Hasenstab by Michael Hasenstab of Franklin Templeton Investments
As we ring in a new year, it's a good time to gain some perspective on where we've been, and where we might be headed. In the first few weeks of January, Beyond Bulls & Bears will be featuring a series of investment commentaries from select Franklin Templeton investment management teams. These professionals provide their insights on the market ups and downs of 2012, and the potential challenges and opportunities that may lie ahead from their respective vantage points. Today we hear from Michael Hasenstab, portfolio manager and co-director of the International Bond Department.
2013-01-08 00:00:00 Surging EM Corporate Bond Issuance: Cause for Concern? by Shamaila Khan of AllianceBernstein
New bond issuance by emerging-market companies boomed in 2012, leading to fears of a bubble. But we think this market growth is positive for investors, rather than a harbinger of soaring debt levels or deteriorating credit quality.
2013-01-04 00:00:00 Ring in the New by Mark Mobius of Franklin Templeton Investments
The "year of the dragon" in 2012 certainly didnt disappoint, as the global markets battled one financial dragon after another. From the Eurozone's sovereign debt crisis to persistently high unemployment in the U.S. and a mayday call from many who worried that China's growth rate was headed for a "hard landing," 2012 certainly was interesting. As we turn the calendar page to 2013, the Eurozone seems to be in less-critical condition and China's economic growth still appears to be flying but as of this writing, the U.S. debt problems still haven't been solved.
2013-01-03 00:00:00 Thailand: M&A Boom a Sign of Economic Resurgence? by Team of Thomas White International
Chaleo Yoovidhya was born in northern Thailand where his immigrant family scraped a living raising ducks and selling fruits. Without any formal education or vocational skills, he had nothing to fall back upon in his youth. But that didn't stop him from founding his own pharmaceutical company and developing what has turned out to be arguably the world's most popular energy drink Red Bull. In March 2012, Yoovidhya died aged 89 the third richest Thai and a towering figure in Southeast Asia's business community.
2013-01-03 00:00:00 And That's the Week That Was by Ron Brounes of Brounes & Associates
Welcome to the end of 2012. Investors are hardly basking in the glow of a positive year for stocks. They are less than enthusiastic about the recovery in housing. They seem to be overlooking the actions of the Fed and the implications for the indefinite low rate environment. Two words remain firmly entrenched in the minds. FISCAL CLIFF. What say you (besides bickering and backstabbing)Prez O, Speaker Boehner, Senators McConnell and Reid? Time is running out and five straight down days proves that investors are growing more and more nervous. Happy New Year (I think).
2013-01-03 00:00:00 2013 Forecast: Good Economy, Challenged Markets by Douglas Cote, Karyn Cavanaugh of ING Investment Management
We enter 2013 bombarded by conflicting signals. While fundamentals have been mixed of late, longer-term themes our "tectonic shifts" like the energy revolution are gaining momentum and promising to make positive contributions sooner rather than later. And while salutary measures taken by policymakers have eased global risks and lessened fears of Armageddon, there is considerable work yet to be done.
2013-01-03 00:00:00 Korea's First Female President by Michael Han of Matthews Asia
South Korea's president-elect Park Geun Hye will become the country's first female leader when she takes office in late February for a single five-year term. The tight December race drew much attention as well as the highest voter turnout (over 70%) for Korea in over a decade. Park defeated Moon Jae In, a human rights lawyer who was once jailed for opposing the dictatorial regime of Park's father, Park Chung Hee.
2012-12-31 00:00:00 And That's the Week That Was by Ron Brounes of Brounes & Associates
Welcome to the end of 2012. Investors are hardly basking in the glow of a positive year for stocks. They are less than enthusiastic about the recovery in housing. They seem to be overlooking the actions of the Fed and the implications for the indefinite low rate environment. Two words remain firmly entrenched in the minds. FISCAL CLIFF. What say you (besides bickering and backstabbing)Prez O, Speaker Boehner, Senators McConnell and Reid? Time is running out and five straight down days proves that investors are growing more and more nervous. Happy New Year (I think).
2012-12-28 00:00:00 The Year's Surprises in Gasoline, Oil and Resources Stock Prices by Frank Holmes of U.S. Global Investors
On Wednesday, I talked about three of the top 10 commentaries that were popular over 2012. Here are a few more to highlights.
2012-12-28 00:00:00 Don't Wait for the Robins: Investment Strategy for 2013 by Pamela Rosenau of HighTower Advisors
Warren Buffet once remarked, "If you wait for the robins, spring will be over." "Uncertainty" has been an overarching issue since the financial crisis of 2008 and one of the principal reasons that investors have remained on the sidelines away from the equity markets. As it has been a part of the investment lexicon, "uncertainty" will always exist in some capacity. In 2012, investors began by focusing on European issues, then the U.S. election, and now the fiscal cliff. In fact, when there is little uncertainty and investors appear unafraid, one should be more concerned.
2012-12-19 00:00:00 PIMCO's Cyclical Outlook for Asia: Awaiting the Policy Breakthrough by Tomoya Masanao, Robert Mead, Ramin Toloui of PIMCO
Our base case for China includes incremental policy reform, but we also see an increased chance of a potential positive surprise on reform, resulting from the recent changes in leadership. Japan's new government will likely focus on reflating the structurally impaired economy, but policy effectiveness will remain questionable. Australia is being burdened by the unintended consequences of the policy responses of others, accompanied by the impending rebalancing of the Chinese economy.
2012-12-19 00:00:00 The Consumer Catalyst in Asia's Emerging Markets by Andrew Sleeman of Franklin Templeton Investments
There may be no better evidence of the economic power of the consumer than the spending frenzy that occurs this time of yearthe sparkling lights, the must-have gifts and gadgets, the indulgent meals. Whether online, brick and mortar, big box or mom-and-pop, retailers count on the year-end consumer boom.
2012-12-18 00:00:00 Jeremy Siegel on 'Dow 15,000' by Robert Huebscher (Article)
Jeremy Siegel was one of very few individuals to have correctly predicted the strong performance of the equity markets over the last year. The Wharton professor and author of the renowned book, Stocks for the Long Run, forecasts continued strong performance for the year ahead.
2012-12-18 00:00:00 Energy Face-Off: North American Energy Independence vs. Canada's Export Plans by John Devir of PIMCO
President Obama's November 2011 postponement of a decision on whether to permit an oil pipeline from Canada's oil sands to the U.S. Gulf Coast caused a barrage of protests and negative press in Canada. Canada's new focus on building capacity to sell to Asia-Pacific could hinder U.S. ambitions of energy independence from overseas oil, since the U.S. imports roughly 30% of its crude oil from Canada. We see investor opportunities in rail transportation and pipeline systems that possess excess capacity.
2012-12-13 00:00:00 Decoupling From the Eurozone by Scott Minerd of Guggenheim Partners
Recent positive data releases from the U.S. and Asia seem to indicate that global investors should not expect to be severely affected by the ongoing problems in the eurozone.
2012-12-11 00:00:00 Fine Wine - Why it's for More than Just Drinking by Mark E. Ricardo, JD, LLM, AAMS (Article)
For many investors, an ideal asset class would combine superior long-term absolute and risk-adjusted returns with a hedge against inflation and stock market volatility. There's a way to get all of that, in an asset class you might never have thought of until now: fine wine. Investment-grade wine deserves careful consideration, particularly now that - unlike other collectibles, such as art and rare books - it can be traded on a regulated exchange.
2012-12-07 00:00:00 Postcard from Malaysia by In-Bok Song of Matthews Asia
During a recent trip to Malaysia I had the opportunity to visit several oil and gas companies. Northeast Asia, most notably Japan and China, already accounts for a considerable amount of energy consumption and is heavily dependent on imports. Meanwhile, Southeast Asia, which has lower industrial development and warmer weather conditions, has traditionally shown to have relatively abundant oil and gas resources. Naturally, this has led the region to be a major exporter of energy.
2012-11-22 00:00:00 Emerging Asias Rising Productivity by Robert Horrocks of Matthews Asia
Per capita GDP in China has tripled in purchasing power parity terms in the last decade yet Chinese workers still likely have their most productive years ahead of them. Asia as a whole has seen consumption increase by a third since the global financial crisis, even as the West has languished. This month, Robert Horrocks, writes about what is key to the emerging opportunities in Asia: Productivity.
2012-11-15 00:00:00 Rediscovering the Golden Beauty of Myanmar by Frank Holmes of U.S. Global Investors
Myanmar has been called "probably the best investment opportunity in the world right now," by legendary international investor Jim Rogers. In an interview with The Myanmar Times, he compared the country formerly known as Burma to China in the 1970s, when it started opening up to the world. "In 1962, Burma was the richest country in Asia. Then they closed and [now] it is the poorest."
2012-11-15 00:00:00 Pacific Basin Market Overview - October 2012 by Team of Nomura Asset Management
Equity markets derived support this month from improved U.S. economic data and an impression that China's economy might be bottoming out. In addition, the Euro Area Industrial Production numbers came in above consensus. The MSCI AC Asia Pacific Free Index including Japan declined by 0.39% while the MSCI AC Asia Pacific ex Japan Free Index gained 0.44% in October 2012.
2012-11-09 00:00:00 Americas: Economic Review 3rd Quarter 2012 by Team of Thomas White International
Economic trends in most countries across the Americas region saw a moderate recovery during the third quarter, though the pace of growth remains subdued. Slower global demand due to the ongoing European recession and the slower expansion in Asia continues to restrict exports from the Americas. At the same time, domestic consumption growth has been relatively more robust than expected and has helped most regional economies prevent a deeper slowdown.
2012-11-08 00:00:00 Emerging Asia Pacific: Economic Review 3rd Quarter 2012 by Team of Thomas White International
Emerging Asia Pacific economies faced a challenging third quarter in 2012 as exports to key developed markets such as the Euro-zone came under pressure. As the austerity policies implemented by many of the countries in the Euro-zone caused a significant slump in demand, emerging market economies, which serve as the workshop of the world faced significant difficulties. Almost all major export-dependent nations like China, South Korea, Taiwan and Malaysia faced pressure to export growth. Still, most of the economies possessed both monetary and fiscal ammo to overcome the slowdown.
2012-11-06 00:00:00 The Prize for the Fiduciary Standard: Global Market Leadership by Stephen Winks (Article)
Tough times in the brokerage business are about to get tougher. A difficult investment environment and damage to its reputation are threatening the industry, and now it faces regulatory challenges under Dodd-Frank as it evolves from its current sales-driven culture to a professional services culture focused on advice and the fiduciary standard. Bold leadership will be necessary to navigate this challenge; without it, the brokerage industry and their clients will suffer.
2012-11-05 00:00:00 Want to learn Mandarin and Hindi? Go to Australia by Team of Thomas White International
Australia has planned an ambitious 'Asian Literacy' program aimed at boosting cultural and economic ties with Asia.
2012-10-30 00:00:00 The Yield Hunt by Michael Lewitt (Article)
The high-yield market is not in danger of imminent collapse as some have argued. As long as defaults remain relatively low, and interest rates remain invisible, investors will continue to chase yield. But a few things could cause a sharp sell-off in the near future.
2012-10-26 00:00:00 October 2012: Equity Investment Outlook by Team of Osterweis Capital Management
Equity and other "risk" assets rallied in the third quarter in anticipation of further monetary easing by central banks around the world. The prospect of increased liquidity from the central banks appears to have focused investor attention, at least temporarily, away from the generally softer economic data that continue to emerge from Europe and Asia.
2012-09-27 00:00:00 PIMCO'S Cyclical Outlook for Asia: Structural Slowdown Shaping Near-Term Growth Dynamics by Tomoya Masanao, Robert Mead, Ramin Toloui of PIMCO
Rather than a hard landing for China, we foresee a structural downshift that could be called a "New Normal with Chinese characteristics." Australia has considerable scope for additional rate cuts and more expansionary fiscal policy to address regional weaknesses. The Japanese economy will be affected by weak economic growth in China, which will add more pressure for the Bank of Japan to respond.
2012-09-26 00:00:00 Is China Becoming Less Competitive? by Dara White of Columbia Management
Concerns about the pace of economic growth in China and the imminent change in leadership have continued to escalate. At the beginning of the year, we highlighted the potential for the rate of economic growth to slow significantly. I recently visited Asia to get a clearer perspective on the situation in China specifically, and Asia generally.
2012-09-26 00:00:00 Asia is Falling: Let's Chase the Spin by Doug Short (Article)
First there are the facts: Asian stocks are falling at a particular point in time. But that information for the human psyche (at least for those of us who follow the markets), is woefully inadequate. Why are Asian stocks falling? We must have a rationale for every moment in market time.
Or so it would appear.
2012-09-26 00:00:00 Shanghai Composite Update by Doug Short (Article)
Last night the financial press featured the decline in the Asia-Pacific markets: "Asian Stocks Fall on Investor Concern on Stimulus Effect" and "Asian shares fall on wariness over Spain".
Japan's Nikkei fell 2.03%, dropping it below the 9,000 level. But that's a line in the sand that the Nikkei has crisscrossed many times.
More striking was the 1.24% selloff in the Shanghai Composite. Why?
2012-09-25 00:00:00 Investing in a Resource-Constrained World by Richard Vodra, JD, CFP (Article)
The potential consequences of stagnant oil production and climate change for society are written about frequently, but here is a simpler question that is important to our community: How are these and related facts likely to affect investment returns going forward? How can we even frame such questions usefully?
2012-09-19 00:00:00 Boomer Demographics: The Shift Ahead by Doug Short (Article)
Following up on my posts yesterday on the Census Bureau's latest data for household incomes (by quintile and age bracket), I've now updated my U.S. population pyramids based on Census Bureau's historical data and estimates.
I've been maintaining a set of these pyramids to give us snapshots at 10-year intervals spanning seven decades. My pyramids differ from the ones available at the Census Bureau website in one key respect.
2012-09-14 00:00:00 Surviving a Downturn by Michael Han of Matthews Asia
During my recent trip to Northeast Asia, many managers I met were concerned about the gloomy macroeconomic news still coming out of Europe and were curious to hear from me about the state of the U.S. economy. Given their concerns, companies were preparing for a worst-case scenario and continuing to leverage their competitive advantage as they have done during past downturns. Surprisingly, some companies I met with in more developed parts of Asia seemed to welcome this downturn.
2012-09-07 00:00:00 Policymakers Report Card on Competitiveness by Frank Holmes of U.S. Global Investors
The U.S. dropped to No. 7 on the World Economic Forums newly released 2012 Global Competitiveness Index report. Switzerland retained its top position as the most competitive nation, followed by Singapore, Finland, Sweden, the Netherlands and Germany. Asian countries continue to be among the most competitiveand many are gaining strength. Among the top 20, five are from Asia.
2012-08-31 00:00:00 While Everyone Worried About Europe by Robert Horrocks of Matthews Asia
We all do it. We all refer to Asia as an export-driven economy. It's one of those seemingly useful bits of shorthand. Unfortunately, I believe it has come to do more harm than good. Along with "emerging economies," I would like to banish the phrase to the ranks of outlawed jargon.
2012-08-29 00:00:00 Reconnaissance: Strategy Notes by Douglas Clark Johnson of Codexa Capital
The Non-Aligned Movement summit in Tehran is probably the most important conference hosted there since the 1979 revolution. Iran is doing its best to use the forum as an opportunity to assert its position in world affairs. In market activity, we think fundamentals in India call for less exuberance in gold than some would suggest. Our outlook for South Asia meanwhile recognizes valuation opportunities in the smaller markets of Sri Lanka and Bangladesh.
2012-08-10 00:00:00 Where Wealth Thrives and Innovates by Frank Holmes of U.S. Global Investors
A surprising wealth of information about the world's most prosperous people can be discovered in two new reports. The Chinese Millionaire Wealth Report 2012 found that there are now a million millionaires in China. On average, a Chinese millionaire is 39 years old, has an average of four luxury watches, vacations in France, and owns a business. KPMG;s The Wealth Report 2012 found that there are 18,000 centa-millionaires in Southeast Asia, China and Japan.
2012-08-09 00:00:00 Reconnaissance: Strategy Notes by Douglas Clark Johnson of Codexa Capital
India's massive power failure was a gift to both investment bankers and asset managers. There will likely be a surge in infrastructure-related financing and investment activity directed at South Asia. We also look at sovereign wealth fund transparency; the UAE funds rank comparatively well. Our allocation guidelines for North Africa focus on Morocco, where we believe we will see sustained gains for both portfolio and direct investors once the European situation stabilizes.
2012-08-08 00:00:00 Emerging Markets Equity Monthly Product Commentary: July 2012 by Team of Thomas White International
Emerging market equities made modest gains during the month of July, as global markets sustained the optimism from the last week of the previous month. Select markets in Asia, such as Indonesia, Korea, and Malaysia, as well as Turkey and South Africa outperformed during the month. Repeated assurances by European policymakers over further policy action helped assuage market concerns about the region's fiscal crisis worsening, though economic data continues to be relatively weak.
2012-08-08 00:00:00 Monthly Product Commentary: International Equity - July 2012 by Team of Thomas White International
International equities made modest gains during the month of July on repeated assurances from European policymakers that they will explore all possible steps to prevent a collapse of the monetary union and arrest further economic decline. Developed markets in Europe's Nordic region and the Asia Pacific, excluding Japan, as well as select emerging markets in Asia ended with healthy gains for the month.
2012-08-06 00:00:00 Global Overview: July 2012 by Team of Thomas White International
Global equity prices made modest gains in July, helped by strong gains in the developed markets in Europe's Nordic region as well as in the Asia Pacific, excluding Japan. Most major emerging markets in Asia also saw price gains during the month, while Spain, Italy, and select other markets in Europe lost further ground. U.S. GDP growth for the second quarter declined below the previous quarter's pace, but was marginally ahead of expectations.
2012-08-03 00:00:00 A Funny Thing Happened on the Way to the Recession by Martin Pring of Pring Turner Capital Group
Every day it seems the media are filled with forecasts of dyer economic times ahead based on troubles in Europe, Asia, and the Fiscal Cliff. The list goes on. Indeed the latest unemployment and GDP numbers, reflect a declining growth rate that is on the verge of going negative. Consequently, a number of commentators have used a projection of these trends to forecast an imminent recession. This is typical of crowd behavior, which has a strong tendency to extrapolate the recent past.
2012-07-23 00:00:00 Emerging Asia Pacific: Economic Review 2nd Quarter 2012 by Team of Thomas White International
Emerging Asia, which posted strong results during the first quarter of 2012 on optimism that Europe's sovereign debt problems would be solved quickly, returned to struggling ways during the second quarter of 2012 as prospects for Europe continued to wobble throughout the period. The uncertainty about Greece's fate in the European Union and the destiny of the single market itself kept industrial firms in Europe guessing for the most part of the second quarter.
2012-07-19 00:00:00 Developed Asia Pacific: Economic Review 2nd Quarter 2012 by Team of Thomas White International
Developed Asia Pacific economies experienced significant headwinds during the second quarter of 2012. While optimism about business conditions in the Euro-zone helped sustain export growth during the first quarter of 2012, significant challenges from the Euro-zone hampered both investor and consumer sentiment in most developed Asian economies during the second quarter.
2012-07-17 00:00:00 Breaking Bad by Michael Lewitt (Article)
With our largest business and government institutions committing every conceivable act of legal or moral anomie, we have every right to ask who is going to protect the rest of us from those who have been entrusted with so much power and influence. The institutions that were supposed to be the lifeblood of our economy are the same institutions that inflicted the greatest harm on society. When the family has to be protected from the man who is supposed to protect the family, the family is in serious trouble.
2012-07-13 00:00:00 Moving to Indonesia by Kenichi Amaki of Matthews Asia
I just returned from a two-week trip to Asia, meeting with companies in Japan, Indonesia and Singapore. One notable change I observed in Tokyo - and confirmed in Jakarta - was the emergence of Indonesia as an investment destination for Japanese companies. All of the auto-related companies I met with in Japan were either building or had plans to build new capacity in Indonesia.
2012-07-11 00:00:00 The Ascent of South Korea by Michael Oh of Matthews Asia
One country in Asia that seems to attract less attention than it might deserve, considering its modern-day achievements, is South Korea. While index provider MSCI this year (once again) left South Korea classified as an emerging market, both FTSE and Standard & Poors have placed Korea in the developed market camp for several years now.
2012-07-10 00:00:00 One Way Pockets by Jeffrey Saut of Raymond James Equity Research
This morning I awoke to headlines "Asia Signals Drop In Global Demand," "Euro Zone Fragmenting Faster Than EU Can Act," "European Worries Send Shares Lower," and "Investors Brace For Shaky Earnings Season." Such musings have the S&P 500 futures off about six points. Somewhat offsetting these negative quips are these headlines, "Fed Officials Favor QE3" and "Obama To Seek One-year Extension For Some Of Bush Tax Cuts;" but alas, this morning the negatives are outweighing the positives.
2012-07-05 00:00:00 Looking for Bubbles by Niels Jensen, Nick Rees, Tricia Ward, Thomas Wittenborg of Absolute Return Partners
This month's Absolute Return Letter picks up on the question we left hanging in the air back in May - is Asia a potential re-run of Europe? Although policy rates appear to be dangerously low, and thus encouraging further borrowing, Asia has come a long way since 1997 and there is no immediate risk of a financial meltdown. Australian property prices and commodity prices - in particular crude oil prices - are more likely 'credit event' candidates in our opinion.
2012-06-26 00:00:00 Jeremy Grantham: US Stocks are Expensive and Bonds are Disgusting by Robert Huebscher (Article)
Jeremy Grantham, who has consistently identified overpricing in the US equity markets - he flagged both the Dot Com bubble and the irrational pricing that preceded the financial crisis, for instance - said last week that US stocks are 'a little expensive' and bonds are 'disgusting.' But his sternest warning to investors concerned the longer-term threat posed by global resource constraints.
2012-06-12 00:00:00 Asia's Role in Global Economic and Portfolio Rebalancing by Tomoya Masanao, Robert Mead, Ramin Toloui of PIMCO
We expect that the reallocation of global investor portfolios toward more balanced allocations to emerging market bonds the Great Migration to support Asia in the coming years. To pivot to a growth model that emphasizes domestic demand, China must alter government policy on taxes, profits of state-owned enterprises as well as make other structural changes. Japans growth will continue to be challenged by secular dynamics, and by the countrys inability to respond to them.
2012-06-04 00:00:00 Is Global Financial Reform Possible? by Paul Volcker of Project Syndicate
Nowadays there is ample evidence that financial systems, whether in Asia in the 1990s or a decade later in the United States and Europe, are vulnerable to breakdowns. The cost in interrupted growth and unemployment has been intolerably large. But, in the absence of international consensus on some key points, reform will be greatly weakened, if not aborted.
2012-06-01 00:00:00 Asia, Europe, and value plays by multiple advisors (Article)
David Herro, CIO, International Equities, Harris Associates, covers these topics on Natixis Global Asset Management?s Market Talk
2012-05-29 00:00:00 Asia Exposed by Stephen Roach of Project Syndicate
For the second time in less than four years, Asia is being hit with a major external demand shock. This time it is from Europe, with financial and trade linkages leaving Asia highly vulnerable to a raging sovereign-debt crisis that threatens to turn a mild recession into something far worse. There are no oases of prosperity in a crisis-prone globalized world. That is equally true for Asia, the worlds fastest-growing region.
2012-05-22 00:00:00 Niall Ferguson - The West's Six Killer Apps by Robert Huebscher (Article)
For five centuries, the West dominated Eastern economies. But, beginning with the fall of the Berlin Wall in 1989, the East has now caught up, according to Niall Ferguson. It did so by downloading six "killer apps."
2012-05-18 00:00:00 Postcard from Southeast Asia by Lydia So of Matthews Asia
A recent research trip I took to Thailand and Indonesia was a welcome break from watching gloomy macroeconomic data flash across my office computer terminals. Being on the ground, and literally on the streets, in Bangkok, Jakarta and several smaller Indonesian towns offered a reality check on the economic potential of Southeast Asian countries. This is not to say that these countries dont face challenges at their respective stages of economic developments. But speaking face to face with management teams offered me a fuller perspective.
2012-05-18 00:00:00 Global Real Estate Securities April 2012 Review and Outlook by Team of Cohen & Steers
North America fundamentals are on a slow but positive trajectory. European economic challenges keep us focused on high-quality names. Policy easing trends likely to benefit Asia Pacific.
2012-05-18 00:00:00 International Real Estate Securities April 2012 Review and Outlook by Team of Cohen & Steers
European economic challenges keep us focused on high-quality names. Policy easing trends likely to benefit Asia Pacific.
2012-05-14 00:00:00 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn
Stocks have endured a rough couple of weeks as it has finally become obvious to everyone that the socalled recovery in the US has been a mirage while the difficulties in Europe have never been addressed. The latter problem is due to the flawed structure of the European Monetary Union, while our problem has to do with an incorrect mixture of policy choices from Washington and in many of our larger states such as California and Illinois. Last week saw a decline of 1.7% for the Dow Jones and .76% for the NASDAQ Composite. These declines were very modest compared to the carnage in Europe and Asia.
2012-05-10 00:00:00 International Equity: Monthly Product Commentary April 2012 by Team of Thomas White International
International equity prices remained subdued during the month of April as concerns over the European fiscal crisis continued to cloud market sentiment. Accordingly, price declines were the greatest in Europe while select markets in Asia and Latin America outperformed. As expected, the economies of both the U.K. and Spain contracted during the first quarter, and underscored the mild recession the region is facing at the moment. Bond yields of some of the troubled countries such as Spain and Italy have increased in recent weeks, and investor response to new bond issues remains lukewarm.
2012-05-08 00:00:00 Eurozone Election Hangover by Axel Merk of Merk Funds
The euro is recovering after a dire Monday morning; keep in mind, though, that much of Asia had a holiday and missed digesting the disappointing U.S. unemployment report; liquidity is low, as London is closed for a holiday. Medium term, however, our bigger concern is that big money, such as the Norwegian sovereign wealth fund, is taking a step back from the Eurozone. As such, the odds of more liquidity provisions from the ECB have increased. We believe the euro will underperform other European currencies; note, though, that the world, including the U.S., will remain awash in money.
2012-05-08 00:00:00 A New Economic Era: The Usual Rules No Longer Apply by Dawn Bennett of Bennett Group Financial Services
Against this backdrop of economic woes in the U.S. and Europe, business activity in Asia and Latin America is on the rise. The developing economies and emerging markets are where we see the better metrics, not in the US, Europe or Japan. One needs to look at the BRIC countries connection to commodities growth, and understand how they are getting on top of inflation. We believe China will lead the emerging markets in 2012. They will lean towards easing so their consumers will not be hurt by the less than healthy European export business as well as the weaknesses in the exports to the U.S.
2012-04-27 00:00:00 All in the Family by Tarik Jaleel of Matthews Asia
A recent study revealed that family-run businesses are at the heart of Asia, representing half of all listed companies with a market capitalization equal to one-third of Asia's GDP. Naturally, these businesses are a critical source of private wealth creation for the region. In researching Asia's small companies, we note that the role of ownership is important, especially when owners have significant financial interests in a firm, allowing them to take a long-term perspective in running their businesses.
2012-04-26 00:00:00 Shareholder Letter and Commentaries by Robert Horrocks of Matthews Asia
How the markets behave in the near future, including the size and duration of any pullback, is unknowable. However, we remain confident in the long-term growth and prosperity of Asia. Therefore, our approach, in the midst of what are admittedly absorbing macro discussions, has been to focus on finding good businesses, rather than try to speculate on events. As much as we all like to discuss the big issues of the day, the real excitement and challenge comes in discovering businesses whose future prospects are underappreciated by the average view of the investment community.
2012-04-23 00:00:00 Emerging Asia Pacific: Economic Review 1st Quarter 2012 by Team of Thomas White International
Emerging Asia Pacific economies, which reported dismal economic numbers during the fourth quarter of 2011, recovered some lost ground during the first quarter of 2012. Export-led growth in many Asian countries, which had come under pressure during the last months of 2011, witnessed slight improvements in 2012 thanks to receding fears about a sovereign debt crisis in the EU and a stronger-than-expected recovery in the U.S. China, the regions largest economy, however, signaled that it will accept a slightly lower growth rate of around 7.5 percent over the coming years.
2012-04-23 00:00:00 Americas: Economic Review First Quarter 2012 by Team of Thomas White International
Optimism over economic prospects increased across the Americas regions during the first quarter of the year, as economic data showed sustained improvement and global risks eased somewhat. Despite costlier fuel, consumer spending climbed in most countries across the region, especially in the U.S. The European fiscal crisis now appears less worrisome when compared to last year, while the slowdown in Asia has turned out to be milder than expected earlier. Commodity prices have recovered after the correction during the second half of last year, on an improved outlook in global demand.
2012-04-17 00:00:00 Asia-Pacific Portfolio Committee on PIMCOs Cyclical Outlook by Robert Mead, Tomoya Masanao and Ramin Toloui of PIMCO
We do not expect to see aggressively expansionary policy to combat the incremental economic slowdown in China. We believe that most countries in emerging Asia will continue to put their currency appreciation on hold, as inflation is expected to remain subdued over the cyclical horizon. We are concerned about the sustainability of Japans economic growth beyond 2012, as the governments reconstruction spending will fade in 2013. Relatively speaking, Australia is indeed a beneficiary of higher commodity prices as a result of the strong demand for coal, iron ore and liquid natural gas.
2012-04-13 00:00:00 Developed Asia Pacific: Economic Review 1st Quarter 2012 by Team of Thomas White International
Developed Asia Pacific economies showed more promise in the first three months of 2012 compared to the gloomy scenario witnessed during the last quarter of 2011. A marked upturn in the U.S. economy along with receding fears about the debt crisis in Europe gave a fillip to export-based economies in Asia such as Japan and Singapore. Whats more, inflation in most of the developed Asia Pacific economies became less of a concern during the first two months of 2012, with Singapore, Hong Kong and New Zealand all reporting subdued inflation.
2012-04-10 00:00:00 HBS Research: The Role of Business in Society by Michael Edesess (Article)
Many people believe that society needs to change for market capitalism to be sustainable - and it turns out a surprising number of business leaders are among them. That's the finding of a recent series of forums, organized by three Harvard Business School professors. Based on these discussions, the HBS professors advance a bold proposal - that business itself - not government, or even public-spirited nonprofits - should lead the charge to make the necessary changes to our capitalist system.
2012-03-30 00:00:00 The World's a Little Richer by Frank Holmes of U.S. Global Investors
The World Bank released an update to its consumption poverty estimates in developing countries, and for the first time ever, the organization found progress in all the regions they track. In terms of the number and percentage of people living on $1.25 a day at 2005 prices in 130 developing countries, the world is a little richer. The area seeing dramatic progress was East Asia, reports the World Bank. Back in the 1980s, this region had the worlds highest incidence of poverty. Nearly 80 percent of people lived on less than $1.25 each day; In 2008, the number dropped to 14 percent.
2012-03-30 00:00:00 Singapore Gateway to Southeast Asia by Mark Mobius of Franklin Templeton
Viewing the region from the now 20-year old seat of our Singapore office, what we see in Southeast Asia is a generally favorable combination of rising per-capita incomes and a relatively young population, a recipe with the potential to fuel the appetite for a wide variety of consumer goods. The challenges Southeast Asian markets face must not be easily dismissed, but overall I am optimistic about the regions long-term growth potential.
2012-03-23 00:00:00 International Real Estate Securities- Investment Review & Outlook - February 2012 by Team of Cohen & Steers
International real estate securities added to their year-to-date gains in February, although the pace of the rally moderated. Most markets in Europe and Asia Pacific continued to benefit from the retreat of macro risk concerns. Europes difficult grapple with its fiscal crises has made for a negative macroeconomic backdrop, and we expect a moderate recession as a base-case scenario for the region. Given this environment, we seek to invest in companies that are best able to shield themselves from the most adverse effects of slowing economies and a general deleveraging.
2012-03-23 00:00:00 Global Real Estate Securities Investment Review and Outlook February 2012 by Team of Cohen & Steers
Global real estate securities added to their year-to-date gains in February, although the pace of the rally moderated. Most markets in Europe and Asia Pacific continued to benefit from the retreat of macro risk concerns. U.S. REITs, which advanced in 2011 while other regions struggled, had a modest decline.
2012-03-23 00:00:00 Eye on Myanmar by Xin Jiang of Matthews Asia
Since the U.S. declared that the Asia-Pacific region is America's new priority, its strategic moves in Southeast Asia have included the notable visit to Myanmar in December by U.S. Secretary of State Hillary Clinton. The visit was generally viewed as an endorsement of the reform processes that Myanmar has slowly begun to roll out over the past year or so. On my recent trip there, I was able to take a first-hand look at some of these developments.
2012-03-20 00:00:00 Bob Rodriguez on the Dangers in Today's Markets by Robert Huebscher (Article)
Bob Rodriguez is the managing partner and chief executive officer of Los Angeles-based First Pacific Advisors. In this interview, he discusses how the challenges faced by the US economy will impact the capital markets.
2012-03-19 00:00:00 Emerging Markets Equity Product Commentary February 2012 by Team of Thomas White International
The renewed market optimism that surfaced towards the end of last year persisted in February as well, as emerging market equities again outperformed the developed markets. Though GDP growth forecasts for most emerging economies have been scaled lower for the current year and for 2013, it is widely expected that the risk of a further slowdown in economic activity is limited. Emerging markets in Europe and the Middle East continued to lead during the month, followed by Asia and Latin America. Egypt sustained its recovery during the month while Thailand, Russia, and Chile also outperformed.
2012-03-16 00:00:00 Why Invest in Asia Bonds? by Teresa Kong of Matthews Asia
The development of Asias bond markets is one of the regions most profound economic changes of the last decade. This month Teresa Kong, CFA, writes about the diversification Asias bond markets can offer investors, and their three primary return drivers: credit, currency and interest rates.
2012-03-14 00:00:00 Pacific Basin Market Overview - February 2012 by Team of Nomura Asset Management
We still have a broadly positive view of the outlook for the Asia Pacific equity markets. The European Central Banks efforts to provide long-term liquidity support have alleviated the default risk among the peripheral Euro-zone countries. It also appears that the Federal Reserves easy money policy is beginning to have a positive impact on the U.S. economy. Given this optimism, we believe that equities in the region will continue to rally, particularly in the oversold cyclical sectors such as Industrials, Technology and Consumer Durables.
2012-03-13 00:00:00 Europe's ?Back-door QE?: Good News for Global Bond Investors by OppenheimerFunds, Inc. (Article)
By restoring confidence in the global financial system, the European Central Bank's Long Term Refinancing Operation has allowed global bond investors to participate in attractive opportunities around the world.
2012-03-13 00:00:00 Europe Needs a Good Crisis by Michael Edesess (Article)
When it comes to economies in general and financial crises in particular, it's remarkable how little we actually understand. While global financial actors struggle to restructure Greece's debt and to avoid contagion throughout Europe's periphery, we should recall the lessons of the Asian-Russian crisis 15 years ago. As the writings of Joseph Stiglitz and Martin Wolf remind us - and those events illustrate - crises are part of an evolutionary process, and the afflicted economies often emerge with surprising vigor.
2012-03-07 00:00:00 Winning the War in Europe by Scott Minerd of Guggenheim
Given my view on the global liquidity glut, it probably will come as no surprise that I remain bullish on U.S. investments, including equities, high yield bonds, bank loans and other risk assets, as well as art and collectibles. I believe the United States has entered a period of self-sustaining economic expansion, driven primarily by the aggressive monetary policy of the Fed, which is now being reinforced by the ECB. U.S. growth is necessary to reduce domestic unemployment and to provide support to the struggling economies in Europe and Asia.
2012-02-28 00:00:00 Woody Brock on Healthcare Reform and Trade Relations with China by Robert Huebscher (Article)
Dr. Horace 'Woody' Brock is the founder Strategic Economic Decisions, an economic research and consulting service. In the second part of this two-part interview, he discusses his recently published book, American Gridlock, and focuses on how to fix two of our nation's most pressing problems: the crisis in health care - made worse by ObamaCare - and our trade relations with China.
2012-02-21 00:00:00 International Equity - January 201 by Team of Thomas White International
International equity prices recorded strong gains in January on increased optimism that the global economy is not headed for a significant downturn this year. Markets across all regions, led by Asia, recovered during the month. Emerging markets, which had seen price declines during the second half of last year, outperformed the developed markets. Economic indicators from most regions, except Europe, have been relatively healthy and suggest expansion. EU leaders have now agreed to set tighter fiscal rules for member countries, including limits on fiscal deficits and aggregate public debt.
2012-02-17 00:00:00 Digital Content in Asia by J. Michael Oh of Matthews Asia
Most companies I met with were still cautious over the years outlook, which was evidenced by unusually low inventory levels going into the Chinese New Year holiday shopping season. Smartphone sales, however, continue to be one bright spot for markets in Asia. While second-generation mobile handsets still dominate the regions markets, 3G phones and smartphone sales have been taking off in some economiesmost notably in Asias more developed countries, with Singapore showing the highest smartphone penetration rate in the world (at over 50%), followed by Hong Kong.
2012-02-16 00:00:00 Hasenstab Sticks to His Guns by Team of Franklin Templeton
Michael Hasenstab, Portfolio Manager of the Templeton Global Bond Fund, doesnt scare so easily. As he reiterated recently, he actually sees times of market panic as opportunities to make investments where he sees long-term value. The key thoughts he shared: The challenge during periods of volatility is that, although investors can take a short-term hit, this volatility can create opportunity. Fears Europe will sink Asia appear overblown. China not likely to see a hard landing. The Eurozone drama continues to unfold.
2012-02-10 00:00:00 A Stock for its Dividends - Revisited by Jesper Madsen of Matthews Asia
Since investors often turn to Asia looking for growth, they may overlook that the region offers a well-diversified universe of dividend-paying companies in terms of sectors and countries. This month Jesper Madsen revisits the notion that the Asia Pacific region should play an essential role for investors seeking yield and growth in income.
2012-02-07 00:00:00 Neel Kashkari on PIMCO's Equity Strategy by John Heins (Article)
Bond titan PIMCO has been methodically building its equity-investing expertise. Here the architect of that effort, Neel Kashkari, and his first major hires describe their strategy and how they're uncovering value in today's market.
2012-02-07 00:00:00 Where to Find Value in Emerging Asia by Russ Koesterich of iShares Blog
Im updating my views on some of the emerging market countries in Asia. While Im upgrading Chinese equities from neutral to overweight, Im downgrading South Korean and Indian stocks from neutral to underweight. Starting with China and South Korea the two countries are both highly exposed to global growth, but China currently appears to be the better positioned and is likely to hold up much better. To be sure, South Korean equities are also cheap compared to other emerging markets. Im downgrading India in response to the countrys recent surge in valuations and persistently high inflation.
2012-01-31 00:00:00 Barry Eichengreen on the End of the Dollar by Dan Richards (Article)
Barry Eichengreen is a professor of economics and political science at the University of California, Berkeley and a former senior advisor to the International Monetary Fund. In this interview, he discusses the future of the dollar as the reserve currency and the role of the IMF in the Eurozone crisis. This is the transcript of the interview.
2012-01-27 00:00:00 International Real Estate Investment Commentary - Full Year 2011 by Team of Cohen & Steers
We remain materially underweight Europe and Japan, and overweight Asia Pacific (ex-Japan). We have selective allocations to well-established companies in emerging markets whose business models are positioned to benefit from secular growth in consumer spending among emerging middle classes. We are overweight high-quality retail and offices in major city centers globally, where tenant demand has been more resilient and supply more constrained. Finally, we have allocations in property sectors and geographies where stronger cyclical recovery is emerging as a driver of outsized cash flow growth.
2012-01-24 00:00:00 The Global Economic Outlook: Diverging Paths by Thomas D. Higgins of Dreyfus
The global economy can weather a mild eurozone recession, but is too fragile to absorb a severe financial shock such as a breakup of the euro. Higgins expects Central and Eastern Europe are likely to be most negatively affected by a eurozone recession, followed by the UK, the US and other advanced economies, given their respective trade dependencies. The least vulnerable regions would be Asia and Latin America. Long-term value in popular safe havens such as U.S. Treasuries and gold, preferring to focus on U.S. non-financial corporate credit as well as emerging market local currency debt.
2012-01-23 00:00:00 Willful Optimism in the Face of Pessimism by Robert Horrocks of Matthews Asia
The U.S. has an unemployment problem, Europe is insolvent and Chinas banking system and property developers face the prospect of rising bad loans. The only thing that appears to be sustainable in investors minds is depression. Indeed, this has led to ongoing pessimismand perhaps too much of it. This month Robert Horrocks, PhD, takes a dissenting view on all the negativism as central banks in Europe, the U.S. and Asia appear to be shifting to more accommodative stances as inflationary pressures subside.
2012-01-19 00:00:00 Asia-Pacific Portfolio Managers Discuss PIMCOs Cyclical Outlook by Robert Mead, Isaac Meng and Raja Mukherji of PIMCO
We expect emerging Asia growth below the market consensus due to its less aggressive policy responses compared to 2008-2009. The Asia-Pacific region is less affected than others by eurozone turmoil but contagion is still a risk through direct trade and the regional production chains that characterize Asias export-oriented economies. In this environment, we favor Australian government bonds for their high credit quality, low-beta currencies such as the Chinese yuan, corporate issuers that have delevered, covered bonds and mortgage-backed securities.
2012-01-17 00:00:00 An Essential Client Conversation ?Will I be able to pay for my hip replacement at age 85?? by Dan Richards (Article)
Advisors face a big challenge in planning for boomers. Your assumptions about how long they'll live and the nature and cost of their lifestyle as they age will dramatically impact your planning decisions. Conversations with boomers about those topics and about the implications of funding health care are difficult but important.
2012-01-13 00:00:00 Chinese Debt Restructuring at Work? by Teresa Kong of Matthews Asia
How long a restructuring takes will also have a notable bearing on recovery value. Given the myriad of jurisdictions involved, the legal battles will likely take many months if not years to resolve. Given the time value of money, a penny recovered today is worth more than a penny recovered tomorrow. Hence, investors must weigh the cost in terms of time and legal costs against any future recoveries. Asia offers great opportunities, but one has to be mindful that some of the regions markets are still developing.
2012-01-12 00:00:00 The Perils of 2012 by Joseph E. Stiglitz of Project Syndicate
The pragmatic commitment to growth that one sees in Asia and other emerging markets today stands in contrast to the Wests misguided policies, which, driven by ideology and vested interests, almost seem to reflect a commitment not to grow. As a result, global economic rebalancing is likely to accelerate, almost inevitably giving rise to political tensions.
2012-01-12 00:00:00 Pacific Basin Market Overview December 2011 by Team of Nomura Asset Management
For much of the fourth quarter of 2011, anxiety surrounding the ongoing European sovereign debt crisis has kept the Pacific Basin equity markets largely range bound, although most indices managed to trend higher from their October lows with the help of unexpectedly buoyant economic data from the U.S. The MSCI AC Asia Pacific Free Index including Japan gained 0.66% and the MSCI AC Asia Pacific ex Japan Free Index gained 3.96%, resulting in declines of 17.31% and 17.98%, respectively, for the full year.
2012-01-11 00:00:00 Emerging Asia Pacific: Economic Review 4th Quarter 2011 by Team of Thomas White International
Emerging Asia Pacifics economic expansion slowed considerably beginning in October 2011. In many economies, export growth along with investments grew at their slowest pace since the summer of 2009. Although the Purchasing Managers Index improved across key economies in November the index was still under the 50 mark, which generally means a contraction in manufacturing activity. Almost all the countries in emerging Asia Pacific posted slower third quarter expansion over the year-ago period.
2012-01-11 00:00:00 Developed Asia Pacific: Economic Review by Team of Thomas White International
Developed Asia Pacific economies faced economic headwinds for the greater part of the fourth quarter of 2011 beginning in October. Major export-oriented economies such as Japan, Hong Kong, and Singapore witnessed slowing export growth as consumer confidence in key markets such as the U.S. and the EU remained weak. Although China boosted exports from Developed Asia Pacific economies, overall exports to emerging economies across the world came under pressure. Furthermore, the resilience of the labor market was also tested by the slowing export and domestic markets.
2012-01-06 00:00:00 A Balanced Asia Strategy for 2012: Income, Quality & Growth by Carl Delfeld of Chartwell Partners
When investors think of Asia, they usually think of growth investing. When I was making my three-week swings through Tokyo, Hong Kong and Sydney to visit clients the issue of dividends and income rarely came up at all. Since then, the region has matured - representing more than a third of world GDP and world stock market value. Asia is a big deal and is at the sweet spot of dividend yield, growth and quality. But the challenge of volatility still lurks.
2012-01-04 00:00:00 On Tap for 2012: More Bond Market Transparency by Matt Tucker of iShares Blog
In 2011, 102 new fixed income funds launched across exchanges in Europe, Canada, Asia and the United States. How will the landscape continue to evolve in 2012? Matt Tucker is here to provide a few insights, including his expectation that new fund launches will help to make the bond market more transparent.
2011-12-23 00:00:00 Twenty Years of Investing in Asia by Paul Matthews and Mark Headley of Matthews Asia
This month Asia Insight speaks with Paul Matthews and Mark Headley to get their thoughts on 20 years of investing in Asia. Why were you so convinced of Asias growth prospects at a time when few others were? Paul: As a young businessman trying to build an asset management firm focused on Asia ex Japan, the challenge for me was that Japan was 95% of the investment universe and also a majority of the market for asset gathering. While based in Hong Kong, I was given the task of looking for ways to build the business and so I was attracted to the markets that were open and growing.
2011-12-23 00:00:00 Outlook 2012: Living In Interesting Times by Victoria Marklew, Asha G. Bangalore, James A. Pressler, and Ieisha Montgomery of Northern Trust
Setting aside the debate over the appropriateness of various policy directives, this Outlook considers which countries or regions are vulnerable as we head into 2012. Not surprisingly we start off with Europe, then go through the U.S., industrialized Asia, and Latin America, finishing with a brief discussion of the political powder keg that is the Middle East.
2011-12-23 00:00:00 European Investment Commentary by Team of Cohen & Steers
Our global macro view has turned more positive given the recent shift toward monetary easing in Asia Pacific and emerging markets, as well as U.S. economic data confirming slow but positive growth. However, we expect Europe to struggle in the intermediate term as austerity measures introduced by a variety of governments continue to hinder growth.
2011-12-23 00:00:00 Global Real Estate Investment Commentary by Team of Cohen & Steers
Our macro outlook has turned more positive given the recent shift toward monetary easing in Asia Pacific and emerging markets, as well as U.S. economic data confirming slow but positive growth. However, Europe is likely to remain an overhang, as the region appears to be heading into recession, making a resolution to its debt crisis considerably more difficult.
2011-12-23 00:00:00 International Real Estate Investment Commentary by Team of Cohen & Steers
Our macro outlook has turned more positive given the recent shift toward monetary easing in Asia Pacific and emerging markets, as well as U.S. economic data confirming slow but positive growth. However, Europe is likely to remain an overhang, as the region appears to be heading into recession, making a resolution to its debt crisis considerably more difficult.
2011-12-15 00:00:00 Asia: Diverging Outlooks Going Into 2012 by James A. Pressler of Northern Trust
With most of the industrialized world focusing on all things European, we thought it might be worthwhile to see just what was happening on the other side of the Ural Mountains. Asia has not become embroiled in the debt problems sweeping through the likes of Greece and Italy, and its exposure to the euro is contained. However, what happens in Europe will inevitably drift into Asia, so a look at its major economies might provide insight into what awaits the region in 2012. In particular, we are focusing on the two most populous countries in the world China and India.
2011-11-28 00:00:00 Another Asian Wake-Up Call by Stephen S. Roach of Project Syndicate
For the second time in three years, global economic recovery is at risk, with the crisis in 2008, triggered by subprime crisis made in America, now followed by Europe's sovereign-debt crisis. The alarm bells should be ringing loud and clear across Asia an export-led region that cannot afford to ignore repeated shocks to its two largest sources of external demand.
2011-11-18 00:00:00 Big Shift in Gold Demand by Frank Holmes of U.S. Global Investors
In 1970, according to the latest World Gold Council (WGC) report, half of the worlds gold was purchased in two regionsNorth America and Europe. Ten years later, that figure jumped all the way to 68 percent during a period of high inflation, a weak economy and spiking gold prices. At the same time, China and India (broadly represented in the chart as East Asia and Indian Sub continent) saw their combined share of gold demand diminish from 35 percent to 15 percent.
2011-11-15 00:00:00 Michael Aronstein on Today's Key Macro Trends by Robert Huebscher (Article)
Michael Aronstein is the president and chief executive officer of Marketfield Asset Management. Since its inception in 2008, his fund has returned 31% while the S&P has been down 15%. I spoke with him about the key macroeconomic and strategic issues facing investors today.
2011-11-15 00:00:00 Capital Flows: Asias Quiet Revolution by Gerald Hwang of Matthews Asia
As markets evolve, so do regulations. The reflexive rebuke of capital controls once voiced by Western regulators has given way to a more flexible approach in times of extreme volatility. Asias regulators have observed the efficacy of volatility-dampening measures, and thus far, appear to have avoided the worst excesses. As fears continue over diminishing U.S. dollar power, Asias bonds remain attractive diversifiers for their yields and good credit ratings. However, one should never forget the volatile history of currencies in Asia.
2011-10-27 00:00:00 Asia-Pacific Portfolio Committee Discusses Cyclical Outlook for Globe and Region by Robert Mead, Tomoya Masanao and Isaac Meng of PIMCO
China will likely focus more on rebalancing of the investment-focused domestic economy this time, rather than on reflating of the economy to engineer higher growth as it has done in 2008 to 2009. Japans fiscal policy will need to be expansionary to facilitate reconstruction efforts. We believe Australian government bonds have the potential to outperform U.S. Treasuries on a local currency basis, particularly in a left-tail global economic scenario.
2011-10-21 00:00:00 Asia Pacific Real Estate Securities by Global Real Estate Team of Cohen & Steers
Asia Pacific real estate securities declined sharply in the third quarter, a negative and volatile period for stocks broadly. Markets were roiled by reduced global growth expectations and intensified European sovereign debt concerns. Economic growth throughout most of Asia Pacific remains relatively strong, driven in large part by demand from China. The regions property markets have encountered policy headwinds, but the outlook for slower global growth has eased inflationary concerns.
2011-10-21 00:00:00 European Real Estate by Global Real Estate Team of Cohen & Steers
European real estate securities fell sharply in the risk-averse environment that defined the third quarter. The region underperformed North America and Asia Pacific, which also had double-digit declines amid slowing global growth and concerns regarding Europes unresolved sovereign debt problem. We believe the European financial system is in need of substantial equity recapitalization. Until banks are able to achieve this, corporate financing in Europe, combined with austerity measures introduced by a variety of governments, is likely to remain restrictive.
2011-10-20 00:00:00 Global Infrastructure by Global Infrastructure Team of Cohen & Steers
Global infrastructure stocks are in a position to perform well in the current economic environment as historically, their cash flows have been relatively resilient in the face of slowing economic growth. On a regional basis, we remain overweight the U.S. and underweight Europe, given the high degree of uncertainty regarding a solution to sovereign debt issues and the long-term impact of austerity on the regions growth outlook. Our Asia Pacific outlook is mixed: our investments in Japan remain defensive, and we are cautious on Australia, given the potential impact of a slowdown in China.
2011-10-19 00:00:00 Pacific Basin Market Overview September 2011 by Team of Nomura Asset Management
Europes inability to find a solution for its current fiscal problems and the weakening macroeconomic outlook sent equity markets into a downward spiral during the July-September quarter. In Asia, concerns about the risk of a hard landing in China resurfaced as well. All country and regional indices declined, with the MSCI AC Asia Pacific Free Index including Japan and the MSCI AC Asia Pacific ex Japan Free Index declining 16.35% and 21.28%, respectively, for the quarter. In the short term, the rush to raise cash could lead to further declines in markets
2011-10-19 00:00:00 Emerging Asia Pacific: Economic Review September 2011 by Team of Thomas White International
After battling inflation for over a year, many emerging Asia Pacific economies are now facing challenges over stimulating growth. A year of persistent monetary tightening in emerging Asia Pacific has unfortunately coincided with slowing growth prospects in the developed world. The U.S. and the European Union are the largest trading partners for many export-dependent emerging Asian economies like South Korea, Taiwan and even China. With economic growth slowing in the U.S. and the European Union, many emerging Asian nations are rightly worried about their export prospects.
2011-10-19 00:00:00 Developed Asia Pacific: Economic Review September 2011 by Team of Thomas White International
Developed Asia Pacific nations continued to face headwinds to growth in September. With factory output across the world slowing down to a trickle, major developed Asia Pacific economies ranging from Japan to New Zealand started witnessing pressure on their economic output. As exports still act as the backbone for many of Asias developed countries, a global decline in manufacturing is causing concerns. A slowdown in the U.S. and Europe also cast a shadow on the economic prospects for Asian nations.
2011-10-18 00:00:00 Bob Doll: Why the US is Positioned Strongly by BlackRock (Article)
Investor unease has risen dramatically over the past quarter in the face of growing concerns about the world's economic and financial health. The focal point has been the intensifying debt crisis in Europe. The issues facing Europe are highly complex, but essentially are underscored by a single question: Is Europe facing a solvency crisis or a liquidity crisis?
2011-10-11 00:00:00 The Global ?Old Normal? by Michael Nairne (Article)
Amidst a torrent of dismal economic news and plunging stock prices, investment horizons have become increasingly short-sighted. The new normal of faltering growth and painful deleveraging appears to be only too true. However, investors capable of taking a long-term, global view will find forces at work that will likely drive resurgent world growth akin to that which occurred in the decades right after World War II.
2011-09-16 00:00:00 APEC Forum Convenes by Robert J. Horrocks of Matthews Asia
The Asia-Pacific Economic Cooperation (APEC) forum, representing 21 Pacific Rim countries, kicked off a summit this week in San Francisco. The summit will address issues including energy, transportation and womens economic participation in preparation for an APEC heads of state meeting in Hawaii this November. The topics being addressed during the summit are of great interest to those seeking to understand some of Asias long-term growth trends. Female participation in Asias labor force can be quite low.
2011-09-14 00:00:00 Asian Bonds Fund Manager Interview: A Misunderstood Opportunity by Team of Aberdeen Asset Management
Global investors remain under-invested to Asian bonds. Exposure is often made through global debt benchmarks; however, these benchmarks typically have low allocations to Asia, may not be particularly active, have allocations to less creditworthy countries and possess limited local currency exposure. Many investment opportunities in the Asian region have been overlooked. Asia provides a diverse set of markets and a broad set of country issuers across the credit spectrum, offering what we believe are good opportunities for investors to enhance portfolio yields.
2011-09-13 00:00:00 The Risks of Exchange-Traded Products by Dennis Gibb (Article)
Every major financial crisis has been foretold by timely but ultimately ignored warnings. At the end of mania, the rush to secure more fees, investment performance and status trumps common sense. In the last few months, the drumbeats of warnings from financial journals and regulators about exchange-traded funds have been sounding. Few seem to be listening.
2011-09-08 00:00:00 Developed Asia Pacific: Economic Review August 2011 by Team of Thomas White International
Developed Asia Pacific countries faced increasing headwinds to economic growth during August. Lukewarm growth figures in developed Western economies such as the U.S. and the European Union are troubling the growth prospects of many export-oriented markets such as Singapore, Japan and Hong Kong. Despite some support from emerging markets, export orders for Singapore and Hong Kong have slowed down substantially. In Japan the current account surplus slid, while the Singapore government revised its export growth figures down for the rest of the year.
2011-09-08 00:00:00 Emerging Asia Pacific: Economic Review August 2011 by Team of Thomas White International
Emerging markets across Asia experienced flagging equity prices as fears of a global slowdown, triggered by the downgrade of the U.S. sovereign credit rating and concerns over the debt crisis in Europe, gripped markets. Stock markets in some of the emerging Asian economies flirted with yearly lows. The Asian Tigers including South Korea, Hong Kong, Taiwan, Malaysia, and Thailand reported slower growth for the second quarter ended June 2011. Even China, the worlds second largest economy, reported headwinds to growth.
2011-09-06 00:00:00 No Way Out by Michael Lewitt (Article)
There aren't enough Steve Jobs and Mark Zuckerbergs to innovate our way out of the Everest of debt we have built for ourselves (and will continue to build for the foreseeable future). The good news (a purely relative evaluation) is that astute investors will find enormous opportunities in today's markets as they increasingly reflect unsustainable fiscal and monetary imbalances.
2011-08-23 00:00:00 A Fundamental Investment Strategy for Today's Environment by Robert Huebscher (Article)
We spoke with Tim Hartch and Michael Keller, who are co-managers of the Morningstar 5-star BBH Core Select Fund (BBTEX) from Brown Brothers Harriman. The fund's strategy is strictly bottom-up, with investments in established, cash-generative businesses that are leading providers of essential products and services with strong management teams and loyal customers.
2011-08-15 00:00:00 Emerging Europe: Economic Review July 2011 by Team of Thomas White International
The European Bank for Reconstruction and Development (EBRD) has sounded a cautionary note for the east European region after a new $229 billion aid package for Greece by the Euro-zone leaders was awarded in July. The bank, which was established to help the former communist states in their transition to market economies, said Eastern Europe and central Asia are at serious risk from the Euro-zone debt crisis, according to a news report published by Bloomberg. Still, the EBRD upped its economic forecast for the current year for the countries where it has investments.
2011-08-15 00:00:00 Emerging Asia Pacific: Economic Review July 2011 by Team of Thomas White International
China, India, Taiwan and Philippines and other Asian economies seeing inflation accelerate to new highs in June. In most of these countries higher fuel costs and food prices were the primary culprits. While large economies such as India and China hiked interest rates aggressively, many countries increased bank reserve ratios to drain excess liquidity and rein in credit growth. The lone exception to the inflation-ridden scenario in Asia was Indonesia. Indonesia has successfully navigated inflationary pressures by allowing its domestic currency to strengthen strongly.
2011-08-15 00:00:00 Developed Asia Pacific: Economic Review July 2011 by Team of Thomas White International
Reconstruction spending in some key countries in the region, like Japan and New Zealand, also played a key role in improving labor markets. In Australia, however, labor markets turned sour as job losses inched up during the quarter. Inflationary pressures have become acute in Singapore and Hong Kong mainly due to labor shortage and a relentless rise in property prices. Economies that depend on China for their export industries are worried about a weakening in the Chinese economy in the quarters ahead.
2011-08-09 00:00:00 Does Government Intervention in Financial Markets Slow Economic Growth? by Michael Edesess (Article)
As we saw with the Dodd-Frank legislation and the Consumer Financial Protection Bureau, the question underlying the debate over financial regulation is whether it stifles economic growth. Leo F. Goodstadt's book, Reluctant Regulators, provides useful insights from the experiences of Hong Kong and China. It also causes us to ponder whether our measurement of economic growth is fundamentally flawed.
2011-08-09 00:00:00 Weekly Aisa Update by Robert J. Horrocks of Matthews Asia
Italys government bond yields have been spiking as investor concerns threaten to become self-fulfilling prophecies that raise the specter of default in Italy and dismemberment of the euro. While, China is stepping more than a little lightly on the monetary brakes, along with other countries across Asia, over fears that inflation is getting out of control. And the markets response is to push up the price of U.S. bonds and sell down equities across the globe. Obviously, slowing growth is of far greater concern to investors than the opinion of the rating agencies.
2011-08-09 00:00:00 Pacific Basin Market Overview July 2011 by Team of Nomura Asset Management
Equity markets in the Pacific Basin edged higher in July despite the ongoing sovereign debt issues troubling both Europe and the U.S. and the pressure from a slowdown in Chinas economy. Smaller ASEAN (Association of Southeast Asian Nations) economies continued to provide support this month, so the MSCI AC Asia Pacific Free Index including Japan and the MSCI AC Asia Pacific ex Japan Free Index closed 1.33% and 0.03% higher, respectively.
2011-07-15 00:00:00 Thailand's First Female Prime Minister by Tarik Jaleel of Matthews Asia
Phue Thai?s campaign, ?Thaksin Thinks, Phue Thai Acts? ran on a platform which tapped on Thaksin?s populist program for the rural poor. Thailand is one of Asia?s structurally polarized societies with divisions running along the lines of the affluent population in Bangkok and the South and the rural poor (often farmers) in the North. These divisions have been reinforced by one of the highest ratios of rural poverty in Asia. Although recent increases in agriculture commodity prices have led to a mini boom in the northern region, the income gap is still the widest in Southeast Asia.
2011-07-14 00:00:00 Pacific Basin Market Overview ? June 2011 by Team of Nomura Asset Management
Faced with the imminent withdrawal of the Fed?s QE2 policy, the ongoing sovereign debt woes in the Euro-zone, and concerns over a slowdown in China, the Asian equity markets were at best only able to range trade during the second quarter. The broad indices remained relatively flat, with the MSCI AC Asia Pacific Free Index declining by 0.50% while the MSCI AC Asia Pacific declined 0.87%. As the immediate concerns over the sovereign debt crisis in Europe subsided, a steady recovery in domestic production also helped to lift the Japanese market and trigger a late rebound in equity prices.
2011-07-12 00:00:00 Developed Asia Pacific: Economic Review June 2011 by Team of Thomas White International
Developed Asia Pacific economies continued to face headwinds in June as the outlook for demand from both developed markets such as the U.S. and Europe, and emerging markets cooled. In the U.S., a lukewarm labor market caused concerns about the pace of economic recovery. In the emerging markets, persistent inflation fears were prompting higher interest rates. Both these factors are putting pressure on exports from Developed Asia Pacific economies. Japan, which specializes in exporting machinery and consumer durables, is feeling the heat of a slowdown in demand from consumer countries.
2011-07-12 00:00:00 Emerging Asia Pacific: Economic Review June 2011 by Team of Thomas White International
Emerging Asia Pacific economies continued to be troubled by persistent inflation in June. Almost every country in the region had to either hike benchmark interest rates or bank reserve requirement ratios to rein in lending and credit growth. The monetary tightening effects are largely expected to make capital more expensive and this in turn is expected to crimp growth across many emerging markets. Inflation, which thus far has been more pronounced among food and fuel items, now seems to be spilling over to structural inputs like labor as well.
2011-06-21 00:00:00 Turkey: A Rising Power Bridging Europe and Asia by Mark Mobius of Franklin Templeton
Turkey is the land where the European and Asian continents meet. I asked Carlos von Hardenberg, who is based in Istanbul and oversees our frontier market strategies, to share his views from the center of Eurasia: Since the implementation of the customs union agreement with the European Union (EU) in 1996, Turkey?s trade with EU countries has grown substantially in certain areas. In particular, the Turkish automobile sector has been growing at a fast pace and has become highly competitive. Between 1999 and 2008, auto production in Turkey grew by 285% to 1.15 million vehicles per year.
2011-06-14 00:00:00 What Fama and French?s Latest Research Doesn?t Tell Us by Michael Edesess (Article)
With the high name recognition and respect that the team of Eugene Fama and Kenneth French enjoys in the world of finance, anything they publish warrants attention. Their latest offering, Size, Value, and Momentum in International Stock Returns, offers some interesting data on global equity performance. But they fail to offer any insights that explain the reasons behind their findings.
2011-06-13 00:00:00 Developed Asia Pacific: Economic Review May 2011 by Team of Thomas White International
Developed Asia Pacific economies largely managed to boost output by leaning on exports in May. For some of the economies affected by natural disasters earlier this year, exports proved to be a blessing. Australia, which was affected by floods in February this year, not only managed to increase raw material exports but also gained by the investments associated with its export-oriented mining sector. Earthquake-hit New Zealand and Japan, however, faced difficulties in increasing output. New Zealand, which depends on food exports and tourism, suffered because of a strong domestic currency.
2011-06-13 00:00:00 Emerging Asia Pacific: Economic Review May 2011 by Team of Thomas White International
Aggressive interest rate hikes by emerging markets in the past twelve to eighteen months have started showing some results. Although food inflation in many emerging markets remains at elevated levels, the pace of inflation seemed to slow in some countries. Further, inflation expectations are expected to cool, primarily due to anticipation of record harvest of food grains in many countries. The threat from oil prices, which grew at a menacing pace during the first quarter of the year, also subsided a bit in May. Nonetheless, many central banks across Asia were cautious over monetary policy.
2011-06-07 00:00:00 Why Jim Rogers is Bullish on Gold by Dan Richards (Article)
The veteran investor Jim Rogers explains why he is bullish on gold and the US dollar, and offers his thoughts on Asian economies why he chose to move his family to Singapore. This is the transcript of the interview.
2011-05-26 00:00:00 Why Asia is the Epicenter of Oil Demand Growth by Frank Holmes of U.S. Global Investors
A few weeks back we highlighted the strong link between GDP growth and oil consumption by showing you how oil consumption per capita has risen in selected countries as per capita incomes rise. Specifically, we noted the potential for China?s oil consumption?already the second-largest oil consumer in the world?to catch up on a per capita basis with other Asian countries such as Taiwan and South Korea. That?s where we think China?s oil consumption is headed, but this shows how strong oil consumption per capita growth has been over the past 50 years.
2011-05-24 00:00:00 Inflation?Which Prices Aren't Changing by Robert J. Horrocks of Matthews Asia
Inflation has been one of the big buzzwords in Asia's markets this year. Wages, interest rates and prices for commodities, assets, goods and food have all been on the rise. The problem with much of the discussion is that it treats inflation in all these areas as though they were the same?a single phenomenon that is an unqualified evil. In my view, not enough has been done to distinguish between cause and symptom. Perhaps this is because when one does try to distinguish between cause and symptom, the topic of inflation becomes much more complex.
2011-05-20 00:00:00 Common Misperceptions about Asian Investing by Robert J. Horrocks of Matthews Asia
During my recent travels and meetings with investors around the world, I have found that interest in Asia is abundant. But what has struck me most is that certain perceptions about investing in Asia permeate regardless of whether we speak with investors in Europe, the U.S. or even Asia itself. I find this an opportune time to address three of the common "misperceptions" about investing in the region. 1: The best way to invest in Asia is by investing in multinational companies 2: To invest in Asia, I must accept higher valuations and 3: When investing in Asia, market timing is very important.
2011-05-19 00:00:00 Chart of the Week: Emerging Europe's Middle Class by Frank Holmes of U.S. Global Investors
Middle-class, affluent, bourgeois - they describe a group of people who enjoy a comfortable life, have access to healthcare and, have discretionary income. And across developing nations, there is a growing group that are just settling in to this lifestyle. A few weeks ago we discussed how economic power is gradually shifting eastward and highlighted a McKinsey Global Institute report that showed China, Latin America and South Asia are projected to account for most of the middle class children by 2025. Those regions aren?t the only ones. A surging middle class exists in Eastern Europe as well.
2011-05-12 00:00:00 Pacific Basin Market Overview - April 2011 by Team of Nomura Asset Management
Equity markets in Asia continued to gain ground in April after a volatile first quarter of 2011. Stock markets ended higher as companies reported strong earnings, while expectations that inflation may have peaked out also helped to support market sentiment. Disruption to manufacturing industry supply-chains and ongoing problems surrounding the Fukushima nuclear power plant have continued to weigh on Japanese stock prices, although the market was able to stabilize from the massive sell-off that followed the Tohoku earthquake.
2011-05-10 00:00:00 Emerging Asia Pacific: Economic Review April 2011 by Team of Thomas White International
Faced with persistent inflation, central banks across emerging Asian economies turned more active in the foreign exchange markets during April, aggressively raising interest rates. However, these actions have coincided with a loose monetary policy in the developed markets. Consequently, the investment capital, which typically chases high interest rates, continued to flow from the developed markets to emerging markets, pushing up the value of the currencies of emerging markets. To prevent a sudden appreciation of their respective currencies, central banks turned into buyers of the U.S. dollar.
2011-05-10 00:00:00 Developed Asia Pacific: Economic Review April 2011 by Team of Thomas White International
Developed Asia Pacific economies that were hit by natural disasters during the initial months of 2011 registered mixed economic performance with some countries in the group recovering faster even as other countries are still dealing with the aftermath of the crisis. While Japan, finalized a fiscal and monetary plan, investment-led growth was helping Australia recover from floods. New Zealand, which also suffered a devastating earthquake, showed a considerable rise in dairy exports. Other advanced economies continued to do well, although strong growth has been stoking inflation.
2011-05-06 00:00:00 Opportunities in Southeast Asia (video) by Mark Mobius of Franklin Templeton
Asia presents a wealth of investment opportunities. Economic giants like China and India, with their increasing demand for commodities and natural resources, play a pivotal role for growth in the region, including emerging markets in Southeast Asia. I think the outlook for Southeast Asia remains very positive. Countries like Thailand and Indonesia have seen very rapid growth in the last decade, and frontier markets like Vietnam and Laos, with their strong growth potential, are also very interesting to us.
2011-05-03 00:00:00 Q1 2011 Portfolio Commentary by Jay Compson of Absolute Investment Advisors
In a nutshell, the Fed-induced "risk trade" is once again at a crossroads with commodity/oil prices and the real economy. You know the endgame is near when the Bernanke/Yellen team dismiss the "bad stuff," much like they did with sub-prime. Investors should be prepared for a possible reversal of some of the above trends as they relate to the US dollar, European Union difficulties, and the potential ending of the credit boom across Asia. Given the high sensitivities and correlations across most global asset classes, diversification can be incredibly difficult.
2011-04-19 00:00:00 Emerging Asia Pacific: Economic Review March 2011 by Team of Thomas White International
Inflation continued to be the watchword for the emerging Asia Pacific economies in March. The world?s second largest economy, China, has slowly but firmly gained control over its banks, whose relentless lending had stoked inflation. Consequently, fears about excess inflation affecting China?s economy are expected to come down over the next few months. However, worries over the damage done to Japan by an earthquake could affect a number of export-based emerging economies in the Asia Pacific region. In other emerging Asian economies, monetary tightening continued at an accelerated pace.
2011-04-19 00:00:00 Developed Asia Pacific: Economic Review March 2011 by Team of Thomas White International
During March, most developed Asian economies faced headwinds to export growth. Continued efforts to tighten credit in China, inflationary pressures and strengthening currencies were some of the factors affecting export growth across many developed Asian economies. However, a devastating earthquake that struck Japan in early March disrupted supply chains across Asia. Japan, which accounts for 9 percent of the worlds GDP, plays a crucial role in the functioning of the global auto and electronics industry. It is estimated that Japan will require another 2-4 quarters to recoup the losses suffered.
2011-04-14 00:00:00 Pacific Basin Market Overview by Team of Nomura Asset Management
Asian equity markets began the year in a particularly volatile state as they came to terms with regional inflationary pressure, unrest in the Middle East and North Africa, and the natural disaster in Japan. Notwithstanding these negative factors, most markets in Asia rebounded in late March to end the quarter on a positive note. The MSCI AC Asia Pacific Free Index including Japan, however, decreased by 1.4% in the first quarter of 2011, while the MSCI AC Asia Pacific ex Japan Free Index increased by 1.5%.
2011-04-13 00:00:00 Japan's Production Shortfall Drags on EM Asia Supply Chain by Michael Manetta, Arpitha Bykere and Adam Wolfe of Roubini Global Economics
The amplified shock from Japan?s March 11 earthquake, then tsunami, then nuclear crisis has rippled through the supply chain of its emerging Asia (EM Asia) neighbors. Production shutdowns and weakened demand in Japan began to register in Asia?s trade channels in the weeks following the disaster. As the extent and duration of disruptions to production in Japan become more apparent, the severity of regional supply chain interruptions and the effects on EM Asia's industrial production and export volumes and prices through 2011 can be better anticipated.
2011-04-13 00:00:00 Powering Up Asia by Team of Matthews Asia
Energy is a fundamental building block of all modern economies. As such, it should not be an overstatement to say that the availability, or lack of energy has been a primary driver of growth. This is why it has been imperative for all nations, to secure stable sources of energy. With Japan?s current nuclear crisis and high oil prices causing concern, the topic has drawn recent attention. And as Asia's population continues to climb, the region?s energy demands are also set to soar. China and India, are expected to develop ever greater appetites for energy sources, such as nuclear power.
2011-04-12 00:00:00 Ten Trends that will Reshape the Fund Industry by Robert Huebscher (Article)
For advisors scouring among thousands of mutual funds, bargains and inefficiencies will be harder to find in coming years. Intense competition among funds for shelf space will not translate to lower fees, and the new class of broad asset allocation funds is unlikely to live up to its marketing promises. Those were among the surprising forecasts from Geoff Bobroff, with whom I met last week.
2011-04-08 00:00:00 Postcard from Indonesia by Lydia So of Matthews Asia
During a recent research trip to Southeast Asia, I spent time meeting management teams in Bangkok, Jakarta, Singapore and Kuala Lumpur. I always find it valuable to be able to compare growth opportunities and challenges facing various industries and companies within the region while I am on the ground. Compared to a decade ago, these Southeast Asian cities have all developed relatively high levels of urbanization, affording residents and visitors the modern comforts and conveniences of such things as public transportation, financial services and easy access to fast food chains.
2011-03-30 00:00:00 Middle-Class Middleweights to be Growth Champions by Frank Holmes of U.S. Global Investors
Over the next 15 years, the number of children in middle-class households in emerging market cities around the world may grow 10 times faster than those in developed countries. This future generation living in places such as China, Latin America and South Asia should drive the demand for goods and services, housing and transportation that extend beyond the basic necessities of life. In McKinsey's report, ?Urban world: Mapping the Economic Power of Cities,? the researchers focus on demographic and economic trends to determine which cities will provide the most economic growth in the future.
2011-03-24 00:00:00 Revolution is in the Air: What Upheaval in the Middle East Means for China by Edmund Harriss of Guinness Atkinson Asset Management
The long term growth story in China and Asia remains unchanged. Economic reform and liberalization accompanied by investment and rising wages are creating consumer markets in the world?s most populous region. Higher oil prices inevitably hurt a region that is based so heavily on manufacturing and has a high dependency on imported oil, but this will not result in sustained damage to the economic model. The region?s finances are strong both at the national and at the corporate levels. After good stock performance in both 2009 and 2010 we believe this could provide a good entry opportunity.
2011-03-18 00:00:00 China's Urbanization Driving Housing Demand and Car Sales by Frank Holmes of U.S. Global Investors
It?s been an eventful week in Asia. The world turned its attention to Japan as it copes with the most powerful earthquake in the country?s history. The markets reacted, with Asian shares declining and uranium sentiment negative as investors rethink nuclear power. We are optimistic that a resilient Japan will turn from tragedy to opportunity by stimulating its economy through a reconstruction of the nation. This week, China was recognized for an achievement of its own. The country has resumed the leadership as the world?s top manufacturing country by output over Britain and the US.
2011-03-15 00:00:00 The Latest, and Most Devasting Supply Shock by Louis-Vincent Gave of GaveKal
It has been a rough year so far in Asia, with unprecedented floods across Queensland, droughts in Sri Lanka, southern India and northern China, the Christchurch earthquake and now, most devastating of all, the Japanese earthquake and tsunami. Of course, there is already no doubt that in terms of human suffering and economic cost, this latest tragedy dwarfs all the others; at times like these, it is very hard to not feel either highly emotional, or completely despondent. As such, in an attempt to gain clarity, it is normal to fall back on history, and rely on it as a guide.
2011-03-12 00:00:00 And That?s The Week That Was ? by Ron Brounes of Brounes & Associates
The volatility is back. In Jan., the Dow encountered but two days of triple digit moves. In Feb., that number jumped, but only to three. Already by March 11, the index has moved by 100 point or more (up or down) on four occasions this month. Geopolitical events in the Middle East, Asia, and Europe have brought renewed uncertainties to the marketplace and prompted some recent profit taking and maybe even a flight-to-quality into treasuries. This week, the ?nays? had it as the Libyan conflict continued and threats of its spreading to oil giant Saudi Arabia remained fresh on investors minds.
2011-03-11 00:00:00 Asia Pacific: Economic Review February 2011 by Team of Thomas White International
Asian economies recorded some of their best performance for the full year 2010. In particular, Southeast Asian nations witnessed a banner year, clocking their best performance in recent memory. However, although the full year record was exemplary, growth in the final months of 2010 began to cool off. While a rising currency continued to trouble export-based economies, inflation haunted almost all central banks in the region. Central banks, having to choose between raising interest rates and attracting foreign capital, opted to hike rates.
2011-03-11 00:00:00 Cross Selling in Asia by Michael Oh of Matthews Asia
I recently spent about two weeks in Asia, primarily visiting technology-related companies in Beijing, Seoul and Tokyo. It was nice to be able to contrast these firms in the context of the three capital cities?each at distinctively different stages of their development. Even the difference in air quality levels was visibly evident. While traffic in Beijing wasn?t as bad as I had feared following the recent lunar holiday, it was obvious that China?s automobile culture has taken off, and air quality has suffered as a result. Japan, on the other hand, seemed the most orderly and clean.
2011-03-09 00:00:00 Searching for Growth in Asia by Taizo Ishida of Matthews Asia
There are many ways one might define ?growth? and go about uncovering it. There are a few key elements I look for: main drivers of growth, sustainability and scope of growth, and market expectations. Many global investors today are seduced by the last several years of strong stock performance in China and India, fueled by robust economic growth. However, economic growth alone does not guarantee good stock performance. In fact, many studies argue that, historically, there has been little correlation between stock market performance and economic growth.
2011-03-08 00:00:00 The Sweet Spot by Michael Nairne (Article)
Today?s low interest rates and lackluster stock valuations suggest portfolio returns going forward will be modest. Investors in search of higher return opportunities need to consider small-company value stocks. We explore how this asset class can improve portfolio performance for long-term, patient investors and deal with its risks and limitations.
2011-02-25 00:00:00 Asia Insights from EM Analyst Conference by Allan Lam of Franklin Templeton
Many tend to focus on China and India, the two rising Asian economic powers, and there are reasons why we believe both, which are currently among the top five largest economies in the world will likely be among the top three in 2020. Land and labor costs remain cheap in China. In addition, the country appears to have a competitive edge in terms of work ethics, relatively flexible labor laws and excellent logistics. India?s strength is in its young, growing and increasingly well-educated population, which is fluent in English. This has enabled the country to become a leader in IT consultancy.
2011-02-25 00:00:00 Inflation: Coming to a Store Near You by Jesper Madsen of Matthews Asia
During the past decade, consumers (and central bankers) in developed economies have grown accustomed to the cost benefits of outsourcing their manufacturing to Asia. This resulted in lower prices at the cash register, which in effect gave households in the U.S. greater purchasing power. The outsourced manufacturing model has historically hinged upon the availability of relatively cheap labor, undervalued currencies, access to preferential tax treatments and ongoing improvements in productivity. However, it has become apparent that this model may be under some strain.
2011-02-23 00:00:00 Asian Emerging Markets Will Grow on You by Peter Nielsen and Bryce Fegley of Saturna Capital
A year has passed since Saturna put staff on the ground in the heart of Kuala Lumpur, Malaysia, at the offices of our subsidiary, Saturna Sdn. Bhd. As expected, we have gained valuable insight into the emerging markets of Asia. We find the key to unlocking the opportunities these markets have to offer is an understanding of the intersection of market structure, demographics, economic growth, and asset allocation. Our analysis of trends in these four areas reveals an economic environment with favorable prospects for long-term growth.
2011-02-22 00:00:00 Bruce Berkowitz on the Exceptional Value in the Financial Sector by Robert Huebscher (Article)
Fairholme's Bruce Berkowtiz, US stock-fund manager of the decade, discusses his large position in the financial sector and why he believes the big bets he is making do not amount to Russian roulette. He also comments on his recent nomination of former Florida Governor Charlie Crist to the board of St. Joes.
2011-02-18 00:00:00 Breakfast with Dave by David A. Rosenberg of Gluskin Sheff
The Treasury market retains a nice bid here and equities now look a bit wobbly or at least engaging in a pause. European bourses are in the red column for the most part and Asia was mixed with Japan, Hong Kong, and Korea posting gains but China and India were both clocked for a 0.9% and 1.6% loss, respectively. Even though China raised reserve requirements by a half-point again, the oil price is receiving support from concerns over the spread of social unrest in the Middle East towards Libya and Bahrain.
2011-01-18 00:00:00 A Market Story by Robert J. Horrocks of Matthews Asia
It is not the headline rates of growth in Asia that excite me?it?s the profit-making opportunities within those economies that are necessary to sustain reasonable rates of growth and support the changing lifestyles of Asian households. And that, I hope, is a sentiment with which both the old and the reformed Scrooge might embrace.
2011-01-07 00:00:00 Weekly Asia Update: Postcard from China by Xin Jiang of Matthews Asia
Automation is one of the many possible solutions for China. There is plenty of room for China to catch up with its industrialized Japanese neighbor. China?s current level of industrial automation is comparable to that of Japan in the early 1980s, based on the percentage of computerized machine tools, the market size of the core machinery components needed for factory automation, and the level of automation in vehicle manufacturing.
2011-01-06 00:00:00 Descending a Mine Shaft in the Kazhakstan Steppes by Mark Mobius of Franklin Templeton
Kazakhstan is becoming increasingly important to us as an investment destination. It has vast natural resources such as oil, gas, copper, uranium and a host of other minerals. As a result of the billions of dollars pouring into the country to develop those resources, we believe Kazakhstan has become the economic engine for Central Asia. We have been investing in both the petroleum and mining sectors in Kazakhstan, and the purpose of this visit was to take a closer look at the mining sector.
2010-12-22 00:00:00 Here We Go Again! by David A. Rosenberg of Gluskin Sheff
Market sentiment is as overly optimistic now as it was pessimistic at the July-August lows. Eurozone fiscal deflationary shock. Anti-inflation policy restraint in emerging Asia. Widespread cutbacks at the state and local government level. Debt ceiling issue triggers major rounds of market volatility. Tax breaks that are temporary tend to have marginal economic impact with few multiplier impacts, hence GDP revisions will likely be to the downside post-Q1. Another downleg in home prices undercuts confidence and spending (with around two years? supply of total vacant inventory backlog).
2010-12-14 00:00:00 The End of the Asian Bull Market by Robert Huebscher (Article)
A broadly diversified emerging market investor would have earned nearly 12% annually over the last five years, far outpacing investors in the US and other developed markets. Over the next five or even ten years, investors relying on emerging economies will not be as fortunate, however, according to Louis-Vincent Gave, CEO of the Hong Kong-based research and investment management firm GaveKal.
2010-12-14 00:00:00 Looking Back at a Year of Policy Mistakes by Michael Lewitt (Article)
As we approach the end of 2010, the global economy remains captive to a boom-and-bust cycle resulting from years of pro-cyclical monetary, fiscal and regulatory policies. With very limited exceptions, the same policies that contributed to the 2008 financial crisis remain in place. The only difference is that government balance sheets are far more leveraged than they were heading into that crisis.
2010-12-14 00:00:00 Year-end Letter to Clients: Investment Advice from Winston Churchill by Dan Richards (Article)
For the past 18 months, my draft letters have been designed to balance some of the extreme pessimism among many investors with an objective, positive outlook - the draft year-end letter for 2010 continues with that goal. In it, I borrow from Winston Churchill's insight into the difference between optimists and pessimists.
2010-12-14 00:00:00 A Notable Year of Emerging Market Growth by Mark Mobius of Franklin Templeton
I view 2010 as a year of economic resurgence. Many emerging markets recorded strong GDP growth as they continued to recover from the impact of the 2008 financial crisis. In several cases, robust domestic consumption, government expenditure and intra-regional trade offset weak external demand from developed markets. This led many countries in Asia and Latin America to return to pre-crisis growth levels much faster than expected. China and India were among the world?s fastest-growing major economies during the year, with China overtaking Japan as the world?s second-biggest economy.
2010-12-03 00:00:00 Postcard from Australia by Elizabeth Dong of Matthews Asia
Thanks to its abundant natural resources, Australia managed to escape the recent global financial crisis largely unscathed as it has enjoyed a wave of industrialization from emerging Asian countries. Economic ties between Australia and Asia have broadened from the resources sector to other sectors. Australian financial companies have formed joint ventures and subsidiaries in emerging Asia. One Melbourne-based insurance firm I met with on my recent trip entered into an agreement with the largest bank in China to jointly develop and distribute life insurance products there.
2010-12-01 00:00:00 Allentown by Bill Gross of PIMCO
The global economy is suffering from a lack of aggregate demand. In the U.S. and Euroland, many policies only temporarily bolster consumption while failing to address the fundamental problem of developed economies: Job growth is moving inexorably to developing economies because they are more competitive. Unless developed economies learn to compete the old-fashioned way ? by making more goods and making them better ? the smart money will continue to move offshore to Asia, Brazil and their developing economy counterparts, both in asset and in currency space.
2010-11-26 00:00:00 Tensions Resurface on the Korean Peninsula by Michael Han of Matthews Asia
North Korea remains a constant thorn in the side of Asia and an irritant to regional peace?this much is clear to South Korea, Japan and the U.S. Perhaps this is also increasingly clear to China, which has thus far given the impression of being too tolerant of the North's actions.
2010-11-23 00:00:00 Ned Davis - Still Positive on Stocks by Robert Huebscher (Article)
Just over a year ago, Ned Davis correctly forecast a continuation of the cyclical bull market in stocks. In February of 2008, he foresaw that year's market upheaval, and a year later he predicted the rally that began in March of 2009. Today, Davis is moderately bullish on stocks, as long as the Fed maintains its policy of quantitative easing.
2010-11-23 00:00:00 7 Things to Watch for as 2010 Ends by Isbitts of Emerald Asset Advisors
The cyclical (1-4 year) picture is getting better for U.S. stocks, and even better in the Emerging and Frontier markets. Put us in the camp of people who believe the Fed is too focused on fighting deflation, and at some point in the next half a decade, we will pay for it dearly. Perhaps the most remarkable trend will be the rise of the "Emerging Nations," particularly those in Asia.
2010-11-19 00:00:00 The Korean Discount: Getting What You Pay For? by Jesper Madsen of Matthews Asia
South Korea can be a frustrating place for investors. The country?s companies exhibit such potential and yet many of them trade at a significant discount to their peers both globally and in Asia. My last visit to Korea reminded me of why equities of Korean companies are often not priced in line with the value they create. There have been many attempts to rationalize the discount, with explanations ranging from threats posed by an unpredictable North Korea to the cyclicality of many Korean businesses. However, I believe the issue of corporate governance merits most attention.
2010-11-15 00:00:00 Weekly Commentary & Outlook by Tom McIntyre of McIntyre, Freedman & Flynn
The stock market succumbed to profit taking last week. The reasons are many, but revolved around a poor earnings report from Cisco Systems, a growing skepticism of the Fed?s announced plan to goose the money supply, and finally what the mainstream media is reporting as a rather disappointing trip to Asia by President Obama even as he tried to put his electoral defeat here at home behind him.
2010-11-09 00:00:00 How Modern Is Your Portfolio Theory? by Direxion Funds (Article)
After 58 Years, is there Another Way to Conquer the Efficient Frontier? In the past, active or "tactical" investment management referred to jumping in and out of stocks and bonds - market timing. With the introduction of sophisticated funds that help the masses harness the power of institutional managers and alternative asset classes and strategies, today, tactical management may help to renovate your portfolios - and help you retain and attract assets.
2010-11-09 00:00:00 Waiting for Superman: The Fate of Teachers? Unions by Charlie Curnow (Article)
In 'Waiting for Superman,' the new documentary film about the shortcomings of American public education, director Davis Guggenheim argues that, in order to compete with rival school systems in Asia and Europe, the U.S. must rein in its teachers unions and embrace the free market principles of private schools and privately managed charter schools. Is this a fair assessment?
2010-11-05 00:00:00 Effects of Quantitative Easing on Asia by Teresa Kong of Matthews Asia
While the U.S. intends to stimulate its domestic economy with quantitative easing, the actual effect of QE has been to turbo-charge emerging markets, especially the markets of Asia. There is some concern that short-term portfolio flows or 'hot money' could cause sharp price volatility, and we will continue to monitor these effects and their implications on Asia.
2010-10-29 00:00:00 Four Critical Investment Themes for the Next Decade by Robert Huebscher (Article)
Four investment themes will dominate market behavior over the next decade, according to Martin Murenbeeld, the chief economist at DundeeWealth Economics, a Canadian investment manager and financial advisor. Investors, he said, would be wise to overweight gold and other commodities.
2010-10-27 00:00:00 Convertible Strategy Q3 by David Baccile of Sextant Investment Advisors
Recent earnings growth stems from the economic leadership of developing countries from Asia to Latin America. When those economies soften, the recent improvement in earnings will be called into question. Meanwhile, with interest rates already at rock bottom, equity prices are even more susceptible to future earnings hiccups. The most profitable investment approach over the next several years will therefore be to reduce risk following periods of strong returns, and add risk only when markets have weakened sufficiently.
2010-10-19 00:00:00 Developed Markets and Capitalism in Crisis by Robert Huebscher (Article)
We are not in a globalized world today, according to Ian Bremmer. "The state is back," said the 40-year old president and founder of Eurasia Group, a political consulting firm. Both in the U.S. and throughout the world, governments are exerting their influence through regulation, trade restriction, subsidies, and bailouts, and are threatening the nature of free markets.
2010-10-13 00:00:00 Evolution of the Asia Bond Market by Teresa Kong of Matthews Asia
One of the most profound developments in the history of Asia's capital markets has been the deepening of the domestic bond markets over the last decade. The largest Asian issuers can now diversify their funding sources across both international and domestic currencies. While China's bond market is the largest in Asia outside of Japan, it remains largely inaccessible to most foreign investors. Korea's local currency-denominated bond market is the next-largest at just under U.S. $1 trillion, making it the single-largest bond market readily accessible to offshore investors.
2010-10-07 00:00:00 Global Market Commentary by Monty Guild and Tony Danaher of Guild Investment Management
Inflation, which has heated up in countries like Brazil, India, Indonesia and many others, will eventually make its way to the U.S. and Europe. Attractive areas for investment include Chinese consumer stocks and currencies, stocks and bonds of growing countries in Asia and Latin America, U.S. stocks and gold. The Japanese yen is a short. Japan's quantitative easing, when combined with the QE going on elsewhere, provides a strong impetus for price increases in commodities, gold and stocks.
2010-10-05 00:00:00 A September to Remember by Ron Surz (Article)
In his quarterly market analysis, Ron Surz notes that September has historically been the worst performing month for US stock markets, losing 1% on average over the past 85 years, while the average return in the other 11 months was a positive 1.3%. Not so this September. Surz reviews global market performance and provides his thoughts on peer group analysis and target date funds.
2010-10-01 00:00:00 Postcard from Japan: Before the Dawn by Andrew Foster of Matthews Asia
Matthews Asia portfolio manager Andrew Foster recently returned from Japan, where he met with companies from a variety of industries. As in past trips, many of these companies seemed to be resting on their laurels, even as present growth was flagging. During this most recent visit, however, a subset of companies in different industries seemed to share a realistic outlook, combined with a sense of urgency to improve performance. Each of these companies cited the strength of the yen as a key factor that would allow them to execute overseas acquisitions, especially in the U.S.
2010-10-01 00:00:00 Liquidity Flowing into Asia and Western Latin America by Monty Guild and Tony Danaher of Guild Investment Management
Liquidity will flow into the Asian region raising consumer spending, stock prices and currency values. In the following countries: India, Indonesia, Malaysia, Thailand, Singapore, and China much new liquidity will enter. It will be in the form of foreign direct investment and investment money moving into stocks and bonds. With the exception of China, which is being singled out for a trade battle by the U.S. Congress, all of these countries will see their currencies rise and their economies grow.
2010-09-29 00:00:00 What are Essential Factors for Japan to Return to its Status as the Rising Sun? (Part 2) by Mark Mobius of Franklin Templeton
Japan's immigration policy needs to loosen up to help lower labor costs. In addition, the government needs to reduce spending and taxation so that local small and medium-sized enterprises can grow by expanding into the rest of Asia and to business in places such as China, India and Indonesia. That's because small and medium-sized enterprises are a crucial part of the economy that help to create new business and enterprises. In order for those to flourish, the Japanese government must reduce its role in the economy.
2010-09-22 00:00:00 Too Soon to Call for Asian Decoupling by Nouriel Roubini of Roubini Global Economics
Even without a double-dip, weak U.S. and EU recoveries will cause export-dependent Asian economies to grow below their 2003-07 trends in the coming years. Nonetheless, widening growth differentials with the G7 countries and healthy public- and private-sector balance sheets - along with rising incomes and expanding middle classes - will drive economic growth and foreign investment in Asia and increase intra-Asia and EM trade and investment.
2010-09-14 00:00:00 Redefining Decoupling by Robert J. Horrocks of Matthews Asia
During the second half of 2007, market commentators debated over 'decoupling' - the idea that Asia may somehow be immune to the vicissitudes of the Western economic cycle. Markets are now worried about slowing momentum in the recovery of the developed world. Matthews Asia chief investment officer Robert Horrocks explores decoupling in the current economic environment.
2010-09-07 00:00:00 Cheap Labor Helps Southeast Asia Compete with China, But It Won?t Be Easy by Team of American Century Investments
Labor disputes in China and other emerging market countries have been catching global media attention. As employees in the low-cost workshops of the world fight for higher wages and better working conditions, the longer-term outcome will be better standards of living and rising disposable incomes in emerging market countries. These changes hold positive implications for many global-based companies' present and future growth. A growing consumer class with 'buying power' will certainly be beneficial.
2010-08-27 00:00:00 Postcard From Korea by In-Bok Song of Matthews Asia
During her recent trip to Korea, Matthews Asia research analyst In-Bok Song met with several companies that have been making consistent preparations for the next leg of growth in their core businesses. Though their success remains to be seen, there were a few commonalities in their approach. The most apparent one is their entry into China. Another is structural reorganization, which aims to generate synergies within related business and to strengthen core competitiveness. These efforts in Korea's underlying economy help define the foundation for the country's sustainable economic growth.
2010-08-20 00:00:00 Malaysia, Truly Asia? by Jesper Madsen of Matthews Asia
Malaysia will need to proceed further down the path of liberalization in order to ensure that it stays relevant in an ever more competitive environment and truly grow with the Asian continent. Fortunately, over the past few years, policymakers have scaled back parts of the country's affirmative action system and placed emphasis on the expanding the services sector - both of which are long-term positives that could bode well for Malaysia relevance, not just as a tourist destination, but for long-term capital appreciation.
2010-08-13 00:00:00 Postcard from Inner Mongolia by Winnie Phua of Matthews Asia
Inner Mongolia, not to be confused with Mongolia, is a province in northern China recently visited by Matthews Asia research analyst Winnie Phua. Two dairies in the region command 60 percent of China's dairy market. Unlike most other agricultural industries in China, the dairy business underwent consolidation fairly early on. Over the past decade, it has witnessed rapid production growth of more than 20 percent each year thanks to industry consolidation efforts and increasing milk consumption. These efforts provide insight into how other consolidating industries in China may fare.
2010-08-06 00:00:00 Postcard from Indonesia by Taizo Ishida of Matthews Asia
On paper, Indonesia has made big strides, with annual GDP growth of more than 5 percent in the last several years - including in 2008 when most markets suffered. The country's stock market has also been the best-performing market in Asia since late-2008. But if you stand in the middle of Jakarta you somehow don't get that sense. Indeed, there are still challenges to overcome: infrastructure woes, the country?s widespread poverty and a government lacking checks and balances.
2010-08-04 00:00:00 How the Other Half Looks by Nouriel Roubini of RGE Monitor
The global adjustment process has been delayed. In order to support growth and income generation, the over-saving investment- and export-driven nations - China, emerging Asia, Germany and Japan - continue to look to the overspending countries following an Anglo-Saxon model. There is a risk of a weak recovery of global aggregate demand relative to supply, which could contribute to deflationary pressures. As such, the recovery will continue to be multi-speed and rocky, exit strategies will remain uncoordinated and the risk of policy gridlock is high.
2010-07-27 00:00:00 Active Managers Add More Value in Bull than Bear Markets by Jane Li, CFA, CAIA (Article)
In this guest contribution, Jane Li of FundQuest argues that both active and passive investing have their strengths and weaknesses; it depends on the market segment in question and on the economic climate. Active managers tend to add value in bull markets, but their value is shakier in bear markets.
2010-07-22 00:00:00 Musings on Asia by Vitaliy Katsenelson of Investment Management Associates
The popping of both the Chinese and Japanese bubble economies will lead to higher interest rates. The Japanese government will probably not be able to intervene in the economy for much longer, and so rates in that country will rise and there will be little they can do about it. China's government, meanwhile, seems to be mulling another multi-hundred-billion-dollar stimulus over the next few months. The Chinese government's actions are thus the wild card that will determine the duration and the magnitude of the bubble's pop - the longer they intervene, the direr the consequences will be.
2010-07-16 00:00:00 Postcard from the Shanghai Expo by Andrew Foster of Matthews Asia
Two weeks ago, Matthews Asia portfolio manager Andrew Foster attended the 2010 World Expo underway in Shanghai. The theme of the expo, 'Better City, Better Life,' is intended to demonstrate the benefits of better urban planning, smart growth and a stronger emphasis on the environment. Its message was juxtaposed, however, against the reality that much of the country's growth has been fueled by construction and heavy investment. And while the expo does illustrate China's first steps toward openness, fewer than 2 percent of event participants came from abroad.
2010-07-15 00:00:00 Emerging Asia's On/Off Switch by Nouriel Roubini of RGE Monitor
In 2009 and the first half of 2010, low interest rates and an uncertain global outlook led to strong, volatile capital inflows into some of Asia's most promising economies. Policymakers in these places - which include, among others, Hong Kong, Taiwan, Singapore, South Korea, Indonesia and India - need to tighten monetary policy sooner rather than later. New inflows from the rest of the world might prove problematic, but at present low or negative real interest rates seem to be fueling speculative investment by domestic players, and that too is a dangerous dynamic.
2010-06-22 00:00:00 Niall Ferguson on Japan, China, and the US by Dan Richards (Article)
Harvard's Niall Ferguson is arguably today's leading economic historian. In part two of this interview, Ferguson explains why he fears the future is bleak for Japan, why China may someday be the leading global superpower, and what all this means for the US. We provide a video and a transcript.
2010-06-22 00:00:00 Navigating Fears of the Bond Market by James Pressler of Northern Trust
The need to keep the bond market happy while implementing often far-reaching fiscal reforms is most acute across Europe, where the outlook is for weak real GDP growth into 2011 ? albeit with significant variations between countries. Conversely, the recoveries in Asia and in the Americas have effectively eliminated fears of sovereign defaults but now concerns over economic overheating will dominate. The U.S will eventually have to address its own public debt overhang, but for now is enjoying a temporary safe-haven status.
2010-06-10 00:00:00 Changing Channels: Asia's Shifting Media Mix by Elizabeth Dong of Matthews Asia
A combination of rising consumer demand, emerging technology, market forces and gradual regulatory reform is transforming Asia?s media landscape. Research analyst Elizabeth Dong explores the ways in which China?s publishers and local governments are pushing for reform, and India?s traditional media marketplace has been transformed by private entrepreneurs and foreign players.
2010-06-08 00:00:00 The Phantom Recovery by Peter Schiff of Euro Pacific Capital
Once the euro finally stabilizes against the dollar, commodity prices should resume their rise, especially oil. Normally, the uncertainty created by the disastrous oil spill in the gulf and the resulting moratorium on deep-water drilling would have sent crude oil prices skyrocketing. However, fears of a global slowdown, euro weakness, and general risk aversion have held prices in check. As Asia continues its growth and Europe regains its footing, there should be a delayed surge in oil prices, which will put yet another obstacle on the road to US recovery.
2010-06-03 00:00:00 Spotlight on Southeast Asia by Mark Mobius of Franklin Templeton
The GDP of Southeast Asia is about the same size as India, and within two decades, the region is expected to have a larger and younger population than Europe. It is also a major exporter of soft commodities like palm oil, rice, tapioca, coconut oil, and rubber. Vietnam is one of the key frontier markets in Southeast Asia, and valuations there are among the cheapest in the world. Indonesia's extensive resources and large population put it in a favorable position to attract investments and establish a strong domestic economy.
2010-06-01 00:00:00 Europe: Value or Value Trap? by Dan Trosch, CFA (Article)
European equities seem much cheaper than in the US, says Dan Trosch of Fortigent in this guest contribution. Europe trades at a 26% Price to Book discount and a 20% Price to Cash Earnings discount to the US. Some European industries and stocks are deservedly cheap and value traps; other industries and stocks are attractive and will benefit from global growth in exports and other macro trends.
2010-05-25 00:00:00 Ken Rogoff Expects Slow Growth and Sovereign Defaults by Robert Huebscher (Article)
Among the crush of analysis devoted to the financial crisis, perhaps none has been as influential as that of Kenneth Rogoff and Carmen Reinhart, co-authors of the book This Time is Different. Looking back at 800 years of data on emerging and developed economies, they showed that financial crises - and the recoveries from those crises - follow a highly predictable pattern, and the title of their book was a jab at those who suggest otherwise. Rogoff also spoke at the CFA conference.
2010-05-18 00:00:00 The Next Frontier: Business Services in Asia by In-Bok Song of Matthews Asia
Thanks to improved education levels, Asia now has a bigger pool of quality human resources seeking better employment of their skills. Meanwhile, the cost of this labor in Asia is rising. One area that therefore needs to evolve in Asian economies is business services. Continued productivity growth is one of the most important benefits we can expect from evolving business services. Software and information technology services would arguably have the most direct impact on productivity growth in the industrial, commercial, distribution, technology and health care sectors.
2010-05-04 00:00:00 Four Words of Advice from a Top Advisor by Dan Richards (Article)
Last summer, Dan Richards talked to a thirty-year veteran of the business who's consistently ranked as a top advisor. The week before, he'd talked to a group of rookies just entering the business. In the question and answer period, he was been asked about the single most important thing he learned over the course of his career.
2010-04-30 00:00:00 Europe's Troubles by Robert J. Horrocks of Matthews Asia
In the context of Europe's sovereign debt problems, we do not expect Asia to become a safe haven for investors in the near term. As solvent as China?s sovereign debt position is, questions still remain over the borrowing by local government investment vehicles during the recent stimulus plan and property boom. This is not a benign environment for Asia?s equity markets. But we do take solace in the long term, because these events once again show the relative health of Asia?s economies.
2010-04-27 00:00:00 China: House of Cards or Emerging Superpower? by Robert Huebscher (Article)
Few topics are as contentious as the fate of the Chinese economy. The bulls argue that its growth will propel the global economic recovery and that China will ultimately supplant the United States as the leading world superpower. According to the bears, the Chinese economy has been fueled by unsustainable fiscal stimuliand is a prototypical bubble poised to burst. Five panelists at the Strategic Investment Conference debated this question.
2010-04-23 00:00:00 Postcard from Vietnam by Elizabeth Dong of Matthews Asia
During his recent visit to Hanoi and Ho Chi Minh City, Matthews Asia's Elizabeth Dong had the opportunity to compare some of Vietnam's emerging sectors, as well as some more well-established industries, including its telecommunications industry?one area in which Vietnam has surpassed its neighboring countries. The government has anchored its monetary policy on the depreciation of its currency, the dong. A depreciating currency makes goods cheaper and wages more competitive, which in turn increases foreign direct investment and promotes exports, but also causes high inflation
2010-04-16 00:00:00 Overinvestment in China by Robert J. Horrocks of Matthews Asia
The evidence for overinvestment in China seems to be thin - on the contrary, returns on capital have been stable and rising, suggesting that the productivity of the underlying economy remains strong. The government has tools to combat any concerns about overheating - including interest rates, reserve requirements and allowing the currency to appreciate. This commentary also includes a roundtable discussion with the Matthews Asia Funds Investment Team on a possible China bubble.
2010-04-16 00:00:00 Where is the Next Rising Tide? by Louie Nguyen of Soledad Investment Management
The S&P 500 and Russell 3000 seems closer to fair value than Europe though there may be some room left to appreciate. At the opposite extreme lie several emerging markets, including Russia, Asia ex-Japan, Mexico, and India. While emerging markets may have captured investors? attention because of their projected economic growth potential, we think developed countries may be a source for compelling investments for long term patient value investors.
2010-03-26 00:00:00 Global Market Management by Monty Guild and Tony Danaher of Guild Investment Management
Investors should focus on exporting companies, food-related companies, raw materials producers, iron ore, oil, coal, technology, and on stocks of other countries, especially countries that can export to fast-growing areas such as India, China and Southeast Asia. Even U.S. financial stocks are enjoying a rally as uncertainty ends. Japanese, European and U.S. stocks that produce products for domestic consumption offer poor prospects. Gold is in a trading range, and investors may want to acquire gold shares as it approaches the bottom of that range.
2010-03-13 00:00:00 Postcard from Southeast Asia by Sharat Shroff of Matthews Asia
Asian entrepreneurs are confident about their long-term prospects. Despite this confidence, however, some countries still need to develop stronger institutional frameworks. Billions of dollars worth of new projects for an industrial zone in the Gulf of Thailand have been halted since an environmental lawsuit was filed two years ago. And failings associated with the 2008 government bailout of Indonesia's PT Bank Century point to institutional weaknesses in that country. Failure to address these institutional issues could cost Asian economies crucial capital from foreign investors.
2010-03-12 00:00:00 Assessing India and China by Sunil Asnani of Matthews Asia
Investors often compare India and China. Both countries have been liberalizing their economies for quite some time, and feature entrepreneurial private sectors riding the current waves of growth. While China promises higher but arguably more volatile growth, India seems to be on a relatively more moderate and sustainable growth path. Because the typical U.S. investor is probably growth-starved, this tilts the argument in favor of China. Matthews Asia also includes responses from China and India investment specialists who participated in a roundtable this month.
2010-03-05 00:00:00 A Lengthening Shadow by Andrew Foster of Matthews Asia
The Reserve Bank of Australia announced February 2 that it would leave its key policy rate unchanged following an announcement by Chinese authorities that they would reduce stimulus to their economy. Analysts expected a rate increase based on domestic conditions. The RBA?s announcement suggests that the countries of the Asia Pacific region are moving tacitly toward harmonized currencies and interest rate cycles, dictated by the business cycles of the largest economies of the region.
2010-03-02 00:00:00 Eurozone's Economic Recovery Loses Steam in Fourth Quarter by Team of American Century Investments
Economic growth in the 16-country eurozone stalled in the fourth quarter of 2009, raising concerns about the durability of the region's nascent recovery. Output expanded just 0.4 percent on an annualized basis in the fourth quarter, down from 1.7 percent in the third quarter. Meanwhile, after negative growth in 2009, the world economy is projected to expand by 3.9 percent in 2010 and 4.3 percent in 2011. Asia and emerging markets will lead the charge, while advanced economies such as the eurozone will remain sluggish and dependent on government stimulus measures.
2010-02-02 00:00:00 Chuck Akre on the Akre Focus Fund by Robert Huebscher (Article)
Chuck Akre is the Managing Member and Chief Executive Officer of Akre Capital Management, which he founded in 1989. He has a track record of above-average performance over the last 20-plus years managing mutual funds, separately managed accounts and partnerships, and he discusses the strategy he employs in his new Akre Focus Fund.
2009-12-01 00:00:00 Allen Sinai: Jobless Recovery and the Failure of Current Economic Policies by Robert Huebscher (Article)
As the Democratic leadership in Congress has looked for ways to simultaneously create jobs and reduce the deficit, a key person they have turned to and continue to rely on is Allen Sinai. Sinai now fears the US is in the "mother of all jobless recoveries" and that the economic policies of the Obama administration are not working.
2009-11-18 00:00:00 Obama Tours Asia with a Full Agenda by Nouriel Roubini of RGE Monitor
2009-11-17 00:00:00 Disheartened by Michael Lewitt (Article)
We are again privileged to publish an excerpt from Michael Lewitt's HCM Market Letter. In this issue, titled "Disheartened," Lewitt argues that the powers-that-be are making limited progress addressing the structural problems in the economy, and that the greatest challenge is to achieve budgetary discipline.
2009-11-10 00:00:00 Bruce Greenwald on Structural Problems in the Economy and Unemployment by Robert Huebscher (Article)
Bruce Greenwald is a professor of finance at Columbia University, the Director of Research at First Eagle Funds, and perhaps the foremost expert on value investing. In part one of our two-part interview, he discusses the structural problems facing the economy, the parallels to the Great Depression, and the implications for the unemployment rate.
2009-11-10 00:00:00 Roubini: Fed Policies are Destabilizing the Financial System by Robert Huebscher (Article)
Nouriel Roubini, the once-obscure economist who gained celebrity and the title "Dr. Doom" after correctly forecasting the financial crisis, believes that current Fed policies are destabilizing the markets and pushing the economy toward another collapse.
2009-10-07 00:00:00 Does Asia's Economic Rebound Signal the Return to Stellar Growth? by Nouriel Roubini of RGE Monitor
2009-10-06 00:00:00 A Quarter-End Letter to Send Clients by Dan Richards (Article)
Last fall, Dan Richards began posting quarter-end letters that advisors could adapt for their own use. Many advisors have told him that they have received an outstanding response to the letters they sent as a result, and Dan provides a template for a third-quarter letter.
2009-10-06 00:00:00 Retailers Face the New Frugality by Robert Huebscher (Article)
Whether they sell high-end designer clothing or tractors and pet food, retailers across the country are girding for leaner times. Consumer spending has dropped to 10% below its historical trend line, creating a landscape with far too many stores and far too much merchandise for consumers' thinning wallets to support. Along with the CEOs of Fortune 500 retailers, we attended a conference in New York last week looking at trends in consumer behavior, and we file our report.
2009-08-25 00:00:00 The Case for Optimism by Dan Richards (Article)
Only a few months ago, economist's doomsday scenarios caused widespread concerns that we were about to revisit the Great Depression. That consensus view on the economy has shifted remarkably quickly, with a much more positive outlook for the immediate period ahead. Dan Richards cites two recent articles making a persuasive case for optimism.
2009-08-11 00:00:00 At the Risk of Repeating Ourselves by Michael Lewitt (Article)
We have said before that Michael Lewitt's newsletter is a must-read, and this edition is no exception. Lewitt questions whether we are witnessing a summer calm before the storm, comments on the secured and unsecured debt asset classes, and opines on the abuses of unregulated dark pools of capital. We encourage you to subscribe to this valuable publication through the link we provide.
2009-07-14 00:00:00 Some Signs of Life and Hope for a New Recovery by John P. Calamos and Nick P. Calamos (Article)
Calamos Investments' co-CIOs John P. Calamos, Sr. and Nick P. Calamos discuss the current market climate, implications of Fed and government actions, and investment opportunities in the shorter- and longer-term. Global governmental policies have restored a degree of confidence in the financial markets and many key financial metrics are back to pre-Lehman levels. Many investment opportunities will be available in the future. We thank them for their sponsorship.
2009-07-07 00:00:00 Marty Whitman: The Outlook for Distressed Securities by Robert Huebscher (Article)
Marty Whitman is the founder, Co-Chief Investment Officer, and Portfolio Manager of the Third Avenue Value Fund and a veteran value investor with a long, distinguished history as a control investor. In our interview, he discusses the opportunities in distressed securities created by the financial crisis.
2009-07-07 00:00:00 Riding the Stock Market Wave in the First Half of 2009 by Ron Surz (Article)
Ron Surz provides his award-winning market commentary, reviewing the first half stock market performance around the world. He looks at the past decade, to set expectations accordingly. Have markets become cheap enough yet? He concludes with a realistic and sobering look at our current debt problems - a cause for concern for both young and old.
2009-06-10 00:00:00 Is Eastern Europe on the Brink of an Asia-Style Crisis? by Nouriel Roubini of RGE Monitor
2009-06-09 00:00:00 Let?s Talk Stocks: Berkowitz, Marsico and Weitz by Robert Huebscher (Article)
Three of the industry's most accomplished value investors - Bruce Berkowitz of the Fairholme Fund, Tom Marsico of Marsico Capital Management and Wally Weitz of Weitz Funds - spoke at a panel discussion at the Morningstar Investor Conference on May 28. We present some excerpts of their thoughts on key questions raised during the panel.