Commentaries

Timely market commentaries from leading investment firms

State of Inflationary Confusion

Today we’ll extend last week’s discussion by considering how twisted inflation data leads to less-than-ideal policies.

Craftsmanship in Smart Beta

While somewhat at odds with today’s big-data, warp-speed approach to life and work, thoughtful craftsmanship—the product design and implementation elements that are tangible, measurable, and impactful—can create positive, persistent results in portfolio performance.

Budget Busting

U.S. fiscal policy has become unmoored, and it will be difficult to steer it safely back to shore.

Gold and the Global Ticking Debt Bomb

Looking long-term, there are mounting risks involving debt that make gold appear very attractive right now as a safe haven and portfolio diversifier.

Earnings Growth Matched The Rapid Pace of Equity Appreciation in 2017

S&P sales grew 9% over the past year, the best growth in 6 years. Earnings rose 23%, the best growth in 7 years. Profit margins expanded to a new all-time high of 10.8%. Overall, corporate results in the fourth quarter were very good. Earnings during 2017, in fact, rose as much the SPX index itself. The outlook for 2018 appears to also be strong: the consensus expects earnings to grow as much as 18% this year.

Price Change of Long and Short VIX ETPs​

February 2018: A case study in VIX exposure

Three Market Concerns Move to the Fore

Last week brought renewed focus to three areas of concern that I’ve been writing about for some time: populism, protectionism and pressure on debtors. It appears that we may be moving closer to certain outcomes that could be of concern to markets.

Pessimism Amid Plenty

While there is no shortage of challenges facing economies and societies today, they should not be allowed to obscure positive long-term trends. The best remedies for undue pessimism are practical: effective fact-based policymaking, shaped by scientific inquiry and social solidarity.

The Value of Short Volatility Strategies

The authors believe that with today’s heightened valuations across global equity markets, and volatility no longer cheap, now is a fitting time for investors to take a careful look at put writing strategies and consider swapping a portion of their traditional equity exposure for index put-writing. The piece concludes with a “Special Topic” dedicated to examining the recent VIX Blowup.

Defined Contribution: Four Themes for 2018 and Beyond

In our view, the prospective low-return environment calls for a capital-efficient approach that pairs actively managed bonds with passive or enhanced equities in target-date, core and retirement-income allocations.

Inflationado? Muni Investors Should Seek Cover

US inflationary pressures are developing that could be destructive. Investors need to seek protection quickly. But how? For municipal investors, some inflation strategies fall short, leaving portfolios at risk.

Counter Cyclical Stocks Are Making New Relative Lows, Right on Cue

Counter cyclical stocks, those in the consumer staples, health care, real estate, telecom and utilities sectors, continue to have a tough go at things. In fact, as of two days ago this group of bond proxies made a new low compared to all developed market stocks, thereby continuing and reinforcing a trend that has been in place since the middle of 2016. Why is that?

The Counterargument: Why We Believe Giving up on Europe in Favor of the U.S. Is Wrong

We respectfully disagree with BlackRock’s stance on U.S. and European equities. Here’s why.

Q&A: Market Volatility Opens Opportunities in Asia

Matthews Asia CIO Robert Horrocks says current stock valuations favor Asia amid an increase in market volatility globally.

Yes, Rates and Stocks Can Rise Together…. for Now

Think rising interest rates and higher stock prices are like oil and water? Think again, says Russ, at least for the time being.