Commentaries

Timely market commentaries from leading investment firms

A Fly in the Economic Ointment?

Imagine this: Rising interest rates and reduced foreign capital flows combine to push housing prices down in places like Vancouver. Leveraged players who own speculative homes start to liquidate their properties, pushing prices down further. Banks find themselves holding properties they neither need nor want. The dominoes begin to topple.

Monetary Targets and Tactics

Most central banks have targets, too. And judged solely by the numbers, monetary policy would be assigned a substandard rating.

You'll Want to Read This Living Legend's Thoughts On Copper

This week the U.S. Global Investors office was visited by a living legend in the junior mining industry, billionaire founder and executive chairman of Ivanhoe Mines, Robert Friedland. In case you don’t know, back in the mid-1970s, Robert was caretaker of an apple orchard south of Portland that one of his buddies from Reed College would often visit. That buddy’s name was Steve Jobs, who later went on to found a little company he named—what else?—Apple.

Fixed Income Outlook: I Hate to Burst Your Bubble, But…

In sum, while there are certainly signs of excessive risk-taking in some areas, we feel that they are not systemic risks such as we saw in 2008. A healthy tailwind to corporate profit growth aided by the recent corporate tax rate cuts means that we will not likely see signs of economic weakness for a few years.

An Alternative Explanation for Walmart’s Announced Employee Bonuses and Wage-Rate Increase

I have an alternative explanation for Walmart’s recent beneficence – a growing shortage of qualified employees.

Economic Outlook January 2018

Our current positioning reflects the following beliefs: Many of 2017’s positive economic tailwinds should continue in 2018, setting the stage for additional upside in stocks and other equity-sensitive assets, including convertible securities and high yield bonds.

Oil and Gas MLPs: Poised for a Rebound in 2018

After a four-year downturn in the oil and gas master limited partnership (MLP) sector, marked by a roughly 47% decline in market value, we believe sentiment toward the sector may be turning. With dividend yields approaching 8% – along with increasing free cash flow and a robust U.S. production outlook...

Will Tax Reform Derail CRTs? Don’t Bet on It

Investors seeking floating interest-rate exposure and high yields are increasingly turning to credit risk–transfer securities (CRTs), a fairly new type of mortgage-backed bond. But could US tax-code changes hurt the housing market and, by extension, CRTs? We don’t think so.

Global Economic Perspective: January

The constructive conditions for the US economy remain in place, in our view, in keeping with an increasingly solid expansion across the rest of the world. US consumers have been benefiting from an economy that appears close to full employment and a stock market at record levels, while a vibrant corporate sector has been buoyed further by recent tax changes.

3 Vital Economic Themes for 2018

Amid the seemingly endless noise that poses as news, Rick Rieder and Russ Brownback focus in on three of the most critical themes that investors need to consider for 2018.

2017 Global Factor Round Up

One of the most important discoveries in finance over the past few decades is that stocks of firms that share certain fundamental characteristics called “factors” exhibit different return and risk characteristics than the overall market.

2018 Sector Teams’ Outlook: Government and Currencies

Investing in the information age can be a noisy endeavor–investors are barraged with new information minute by minute. At Loomis Sayles, our investors count on sector teams as one way to cut through the noise.

Dealing with a Runaway Market

Those of you who have been following us since 2010 will identify us a perma-bulls. Even in the depths of the ECRI 2012 /Hussman recession calls we were firmly bullish on the US economy and stock market – quite contrary to the popular consensus at the time.

How Fund Managers Are Positioned As 2018 Begins

As 2018 begins, cash levels have fallen to the lowest level in 4 years. Allocations to global equities have risen to the highest level in nearly 3 years. In most respects, investors are now bullish. Fund managers remain underweight the US. US equities should outperform their global peers.

What Would It Take to Trigger a Secular Reversal in Bond Yields?

In the fall of 1981, the twenty-year US bond yield peaked slightly above 15% and has been zig zagging down through each successive business cycle since. During the last one hundred and sixty-years or so, the average secular, (very long-term) trend in rates has lasted around twenty seven-years. After thirty five-years of declining rates, the current secular bear is getting long in the tooth.