Bill Gross' March 2018 Investment Outlook: A monthly outlook on the global financial markets.
The Fifth Circuit Court of Appeals’ decision essentially wipes the Fiduciary Rule off the books. But, that doesn’t mean everything returns to the way it was before the Rule.
Tax reform has incentivized companies to return their offshore cash to the US. This could create opportunities for US investment grade bonds.
The CFP Board proposal on fiduciary duties are a good first step towards a fiduciary standard. Yet, they fall well short of basic fiduciary practices and, equally as important, what ordinary investors clearly want from an investment advisor or financial planner. Significant common sense revisions will align the CFP requirements with true fiduciary practices. Alternatively, the Board can realign its promise to the public to fit its current standards. Webinar attendees will learn:
No outright winner emerged from the Italian general election, but as David Zahn, Franklin Templeton’s head of European Fixed Income, explains, that situation is normal for Italy. He expects a muted response from European bond markets but cautions there may be consequences down the road if the authorities fail to take the need for reform seriously.
We are amused when commentators cite just one factor for a market movement because there's almost always a confluence of factors influencing the markets at any one time.
The upcoming Italian election is not attracting the same sort of attention among investors as votes last year in France and Germany. For that very reason, David Zahn, Franklin Templeton’s head of European Fixed Income, believes an unexpected result might provoke an outsized market reaction.
We expect policy will continue to drive municipal bond markets in 2018, if more constructively than in 2017. Municipal investors may remember 2017 as the year of unrealized policy fear. While the threat of tax reform and its potential to reduce the value of the muni exemption for retail investors loomed large, ultimately it had little impact on individual municipal bonds.
For fixed income investors eyeing opportunities in Europe, 2018 should be the year economic fundamentals reassert their worth, according to David Zahn, Franklin Templeton’s head of European Fixed Income. Nonetheless, Zahn believes many investors are underappreciating the long-term implications for Europe of the biggest political uncertainty for the region—Brexit.
U.S. stocks may have entered a melt-up phase but for now it is relatively well supported by earnings growth; and although sentiment is extended, behavioral measures indicate still some skepticism. However, given elevated valuations, and the aforementioned overly optimistic sentiment, volatility is likely to increase and more frequent pullbacks are possible. The bull should continue to run, but likely with a bit more drama, so it’s important to stay diversified and disciplined around your long-term asset allocation.