2008 may have generationally scarred investor psychology. As a result, many continue to disavow the current bull market and instead heed warnings of an impending bear market. We argue that fundamentals remain strong and the global equity markets are rife with opportunity.
The third quarter of 2017 closely resembled the first half of the year – global markets continued to grow steadily, resulting in positive returns for many strategic domestic and global equity investors.
Going into today’s important Federal Reserve meeting (with a press conference and an update to the economic projections, aka the “dot plot,” along with the usual statement), we at PIMCO along with most market participants expected the Fed to announce formally the start of balance sheet reduction this fall, perhaps in October. And that’s exactly what the Federal Open Market Committee (FOMC) did.
Many investors no longer view the US as the global safe haven to turn to during bouts of volatility. We argue that US and global fundamentals remain strong, however, many global investors seem to be losing religion.
Never before in the US have we experienced a natural disaster of the magnitude of Harvey. The damage is of such a degree that we find it nearly impossible to comprehend. Yet Harvey does not stand alone. Climate events that preceded it give us much-needed insight into how municipalities recover, and whether disasters precipitate credit defaults.
Federal Reserve Chair Janet Yellen’s remarks at the annual Jackson Hole Economic Policy Symposium delved into history but offered few clues about the future course of Fed policy.
The news coming out of the July Federal Open Market Committee (FOMC) meeting was a reference in the statement that the Federal Reserve expected to begin to implement its balance sheet normalization program “relatively soon,” which we (along with many market participants) took to mean at the upcoming September meeting.
It’s time again for RBA’s annual ‘Charts for the beach,’ where we highlight what consensus is currently missing.
The Federal Reserve is likely to begin normalizing its balance sheet in 2017. Why hasn’t this news rattled the bond market?
Investing based on headlines and political promises is rarely beneficial to one’s portfolio. It’s dispassionately investing for fundamentals that continue to drive the markets.