Since the global financial crisis, inflation in the advanced economies has persistently undershot their 2% targets despite unprecedented quantitative easing (QE), extraordinarily low interest rates, large fiscal deficits and near all-time low unemployment.
I recently have been traveling around the country participating on a panel titled: “Alternatives: Time to Buy When Others Are Selling?” Spoiler alert — my answer to that question is a resounding “yes.” There are two reasons why.
As we look ahead to 2018, it’s important to first recognize how significant 2017 has been for international markets. This is the eighth year of a global bull market, but prior to 2017, international markets had trailed the US for four consecutive years — and for six of the last seven years.
The financial impact of 2017’s three devastating hurricanes has varied greatly depending on the region affected. From a credit standpoint, the most important takeaway is that each region’s ability to withstand the financial impact of the storms depends on its credit quality ahead of the storm.
In the past, investing according to your values, or anything other than financial fundamentals, was seen as a potential detriment to performance. Over time, however, investors have learned that non-financial metrics can help them better understand the risks a company faces, and may even impact that company’s stock price.
We’re now in the eighth year of a global bull market, and the positive effects are being felt in all regions. The Organization for Economic Cooperation and Development expects gross domestic product (GDP) for all of its member countries to grow in 2017 — a feat that has not occurred since 2007.
The Treasury market received a reprieve in September when the White House and Congress agreed on legislation coupling hurricane relief funding with a suspension of the debt ceiling until Dec. 8. The agreement puts off a potentially contentious political debate and keeps the government funded until at least year-end.
As 2017 nears its end, US value stocks are mired in their longest stretch of underperformance versus growth stocks since the Great Depression, held back by low interest rates and easy monetary policy. In my view, the top issue that will help determine whether that trend continues or abates is US tax reform.
About 100 years ago, Argentina was one of the wealthiest countries in the world by virtue of its fertile land. Its economy thrived by shipping beef and grains around the world. But economic and political turmoil through the 1930s sowed the seeds of populism — the effects of which have lasted decades.
Last quarter saw stocks globally continue to rise. The relatively accommodative monetary policy environment and improved global growth were strong drivers. However, as we head into the fourth quarter, I think it’s important that we recognize the potential for greater disruption — in terms of both geopolitics and monetary policy — which can cause greater volatility in capital markets.