Southeastern Assert Management: “We welcome unpredictability”
Ross Glotzbach is head of research and a principal at Southeastern Asset Management, one of the most respected value managers. In this interview, he discusses his investment outlook in an era of political and economic uncertainty.
Gold Gets a Shot in the Arm from Inflation and China
Inflation just got another jolt, rising as much as 2.5 percent year-over-year in January, the highest such rate since March 2012. Led by higher gasoline, rent and health care costs, consumer prices have now advanced for the sixth straight month. In addition, January is the second straight month for rates to be above the Federal Reserve’s target of 2 percent.
Weekly Market Summary
US equities continue to make new all-time highs each week, supported by strong equity fund inflows and macro data that has exceeded expectations. Surprisingly, equities outside the US are actually outperforming the S&P. The current trend is very extended and there are four notable headwinds that may impact equities in the weeks ahead. There is, conversely, a favorable set up in the bond market.
Tax Reform: The Good, the Bad, and the Really Ugly—Part Three
Today we come to part 3 of my tax reform series. So far, we’ve introduced the challenge and begun to describe the main proposed GOP solution. Today we’ll look at the new and widely misunderstood “border adjustment” idea and talk about both its good and bad points
S&P 500 Snapshot: Yet Another Record Close
On Friday, the S&P opened lower than Thursdays' close and was fairly flat until late in the day with a rise a couple of hours before close. The index reached its intraday high at close and ended the day with a gain of 0.17%. Week over week, the index saw a gain of 1.51% ending Friday with another record close.
Big Winners in the Neglected Frontier Universe
Frontier markets were mixed in 2016, with most of the Middle East and Africa lagging the rest of the universe and a few markets surging ahead 30-40% on the year.
Russia: Stagnant Stability
A recent trip to Moscow on the 100th anniversary of the 1917 revolution revealed not a whiff of revolutionary change in the economy, but rather stagnant growth mixed with structural stability. We could simply call it “stagnant stability.”
Global Economic Perspective: February
For all that political events and speculation about policy direction have dominated news cycles over recent months, the US economy’s key fundamentals have changed remarkably little, in our view. The backdrop appears to us to be constructive, as a healthy level of consumer spending has been increasingly reinforced by a recovery in corporate earnings and investment.
An Emerging-Market Evolution
The way investors think about emerging markets has been evolving—along with the markets themselves. One thing we at Templeton Emerging Markets Group emphasize is that one can’t consider emerging markets as one asset class; the opportunities are very differentiated between regions, countries and markets, with different fundamentals shaping them.
Forecasting Factor and Smart Beta Returns (Hint: History Is Worse than Useless)
In a series of articles we published in 2016, we show that relative valuations predict subsequent returns for both factors and smart beta strategies in exactly the same way price matters in stock selection and asset allocation.
Trade Secret: Emerging Markets Constrained by US Policy Uncertainty
Uncertainty about US trade policy changes that could potentially harm emerging market economies dragged them down 4% during the fourth quarter of 2016, underperforming developed markets by 2%.1 Yet emerging market economies generally showed positive signs, with exports beginning to recover, commodity prices rebounding, and inflation remaining benign.
French Election Jitters Underscore Caution When Investing in Europe
Market nerves in anticipation of the French presidential elections in April and May 2017 have driven a spike in 10-year French and Italian government bond spreads, which have climbed 30 to 40 basis points (bps) in recent weeks (to 75 bps and 195 bps over bunds, respectively).
Why European High-Yield ETFs Don’t Deliver
There’s value and opportunity in European high-yield bonds today. But if you’re considering using an exchange-traded fund (ETF) to tap into the market, you may want to think again.
Want to Find the Opportunities? Follow the Sentiment
On Monday I had the opportunity to attend a conference at Goldman Sachs’ Dallas office. Among the dozens of money managers and investors who attended, a combined $1 trillion in assets was represented.