Can the Trump Administration Make the American Economy Great Again?
Trump’s tax and infrastructure proposals will soon face the reality of US debt and monetary policy. We analyze what to expect next.
Choose Your Own Misadventure: Bronfman E.L. Rothschild 2016 Q4 Review
Part of our early January ritual is to read a number of market and economic projections for the upcoming year. And although they are interesting and (generally) thoughtful, to be frank, the articles are basically all the same…
Weekly Market Summary
Global equities are nearly 25% higher than in February 2016. A tailwind for this rally has been the bearish positioning of investors, with fund managers persistently shunning equities in exchange for holding cash. That's no longer the case. Optimism towards the economy has surged to a 2-year high.
Avoid the Slippery Rungs of the Muni Ladder
Fearing rising rates, some municipal investors have sought protection in passive laddered portfolios. The strategy’s seeming simplicity packs a lot of allure—but also hidden risks.
The Paradox of Chinese Drift
While Chinese growth looks stable into early 2017, a more marked slowdown by the second quarter appears inevitable.
Fear Not: EM Bonds Can Handle Higher Rates, Trump
Higher interest rates, a stronger dollar and Donald Trump: three reasons to avoid emerging-market (EM) debt? Not necessarily. Rising rates seem to be signaling faster growth, and that’s good news for many EM bonds and currencies.
Washington, D.C. moves to center stage…
Time for the new White House and Congress to put pen to paper. While the equity markets have sustained their high levels, intra-day volatility in currencies, bonds and equities have surged as those markets attempt to react to every rumor and tweet out of Washington and Trump Tower.
2017 -- Shades of 1937
As a result of some Fed actions taken in 1936 and 1937, the U.S. economy, after experiencing a robust economic recovery starting in early 1934, slipped back into a recession midyear 1937, which lasted through midyear 1938.
The Long Cycle Continues
GSAM expects the long post-crisis economic recovery to continue in 2017 and prefers equities over credit and credit over rates. Broadening exposure beyond conventional stocks and bonds, identifying opportunities in emerging markets and deploying more dynamic asset allocation strategies are some ways to adapt.
On My Radar: Keep One Eye On Bonds. Keep the Other on Inflation
I hate making predictions. I got the tech wreak and sub-prime right, but was far too early on those predictions.
The Great Rotation
By now, you have likely heard something, either directly or indirectly, about “The Great Rotation” from bonds into stocks.
Media Headlines Will Lead You To Ruin
Since investors are mostly individuals that have a “day job,” the majority of their “research” comes from a daily dose of media headlines. Therefore, since the media tends to “focus” their attention on “market moving headlines,” either bullish or bearish, investors tend to “react” accordingly.
Don’t Drink the Cool Aid that Bonds will Under-perform
Don’t get too far ahead of yourself and drink the cool aid that bonds will underperform. Investor fears of higher interest rates have caused volatility, which we believe presents opportunities in the fixed income markets. Global central banks continue to intervene in the markets in such a way that natural market mechanisms cannot function properly.
Will Q4 Earnings Confirm Recent Economic Strength?
My scorecard for earnings season will look for the following company characteristics: Confidence. I expect most to have a murky outlook, with no reason to set the future bar very high. Important trade relationships – imports or exports. Comments on these fears may create some buying opportunities. Concern about a stronger dollar. Everyone is teed up to watch for this, and we should as well.
Are Investors in Denial?
You’re in denial if you believe that U.S. stocks are fairly valued, the Eurozone does not face a crisis or a strong dollar will support stability in the global economy. Those themes were presented by Albert Edwards and his fellow speakers at annual investment conference sponsored by Societe Generale.