The Emerging Markets Channel

Getting More From Your Equity Allocation

How can equity investors address the triple threat of a low return environment, scarcity of alpha and the tendency to chase performance?

Reflections on Trade: Part IV

This is the final report of our four-part series on trade. This week, our discussion on trade continues with a look at the relationship between trade, employment and inflation. We also conclude the series with market ramifications.

Yawn…

Expectations for U.S. growth continue to slow as distractions in Washington D.C. take away from the aggressive legislative agenda.

Brazilian Markets Tumble as Political Turmoil Returns

Brazil’s stocks and currency took a beating as President Temer was implicated in a corruption scandal, endangering the government’s reform agenda and fragile economic recovery.

What does the election of Emmanuel Macron mean for Europe?

Former Minister for the Economy, Emmanuel Macron, defeated the populist Euro-skeptic candidate Marine Le Pen. He did this by taking more than 60% of the French Presidential runoff vote.

And If You Try Sometimes…

Following the election, stock market participants gained optimism on the view that the new administration would push through a reduction in regulations, sharply boost infrastructure spending, and achieve broad tax reform.

Tax Cut Politics

While some investors are freaking out about investigations, tweets, or the personality of President Trump, we are still watching policy.

Three Geopolitical Shifts to Watch this Summer, a Q&A with Peter Zeihan

We met with Geopolitical Strategist Peter Zeihan for a quarterly update right before the French presidential elections. In addition to calling Macron’s win, Peter outlined the three most important geopolitical shifts for US financial advisors to watch in the coming months.

On My Radar: Near Term Looks Good, Long Term Looks Scary

This is one of the more important pieces I’m sharing with you. It’s a candid look at where we are in the economic cycle and what that likely means for the global markets.

The Great Reset: How Should We Then Invest?

This letter will cover the philosophical underpinnings of my thinking. I’ll also introduce some investment tools (which I will give you access to through a link later on in the letter) that express that philosophy, but you could also design a different answer that fits your own (or your client’s) portfolio construction.

S&P 500 Snapshot: Down 0.38% From Last Week

The S&P opened Friday below Thursday's close and rose until about midday when it leveled off. It closed with a 0.68% daily gain and a 0.38% weekly loss after Wednesday's largest daily loss since September.

Will the Fed Change Course?

The Fed story may well command attention. I classify it as an important story, but not an urgent one. I have some strongly-held viewpoints:

  1. The exact timing of rate hikes is not important for long-term investors. The Fed has been following a policy of rate increases in line with economic data. While many do not believe this, the data are supportive. Tim Duy on recent strength.
  2. That said, the rate increases have second- and third-order effects. The perception of the pace of hikes impacts exchange rates. The weaker dollar affects major corporate earnings – in both directions. This makes the Fed news worth watching.
  3. Current data are stronger than widely thought, but much depends upon how one views the Q1 softness—meaningful or aberrant. Recent Fed speeches suggest a moderation in the rate-hike path.
  4. Rates will be increased more slowly, but the balance sheet will be reduced.

Hedge Fund Managers Pour SALT on U.S. Stocks, Look to Europe

Europe is back on the map. That was one of the main takeaways this week from the SkyBridge Alternatives (SALT) hedge fund conference in Las Vegas, where $3 trillion in assets was represented. Speaker after speaker touted European equities for their attractive valuations and as a means to diversify away from the volatile American market in light of rising U.S. geopolitical risk. France’s election of centrist Emmanuel Macron over far-right nationalist Marine Le Pen this month has especially eased investors’ fears that antiestablishment forces would challenge the integrity of the European Union (EU).

China's Trilemma

On the surface, China continues to outperform expectations. It has sustained a high rate of economic growth for longer than most other developing countries.

ECRI Weekly Leading Index: WLI Growth Index Continues Decline

Today's release of the publicly available data from ECRI puts its Weekly Leading Index (WLI) at 144.5, down 0.2 from the previous week. Year-over-year the four-week moving average of the indicator is now at 6.25%, up from 6.16% the previous week. The WLI Growth indicator is now at 5.0, down from the previous week and has been declining for 14 consecutive weeks.