In this month’s Global Economic Perspective, Franklin Templeton Fixed Income Group dives into diverging central bank policy and weighs in on whether the European Central Bank is likely to be less accommodative—and what its timing might look like.
Today I want to discuss reports that global debt levels are at all-time highs, and what this means for your investment decisions going forward.
Typically, U.S. Presidents are wary of claiming stock market performance as a referendum on their success. Most have seemed to understand that taking credit also means accepting blame, and no one would want to make the tortured argument that the positive moves reflect well on their presidency but that the negative moves do not.
American equities have been a good place to invest during the current bull market, now in its eighth year. Since the November election, the S&P 500 Index has surged close to 16 percent.
The Monroe Doctrine began as a United States policy of opposing European colonialism in 1823. It stated that further efforts by European nations to take control of any independent state in North or South America would be viewed as "the manifestation of an unfriendly disposition toward the United States."
Low Treasury yields and high equity prices aren’t necessarily contradictory. Both suggest expectations of continued unexciting growth, low inflation and a steady Fed. What could go wrong?
I have lived through recessions and bear markets; I know what they look like. I wish I could forget what they feel like. They don’t come out of nowhere; there are always warning signs. Many investors choose to ignore those signs; I choose not to. I hope you make the same choice.
It’s easy to fixate on headline inflation numbers that appear disappointing, but Rick explains why there’s more to the data than meets the eye.
Today’s risks are clear: stock valuations are high, credit spreads are tight and interest rates remain low. A modest tilt toward return-seeking assets still makes sense. But investors should also be willing to look beyond traditional stocks and bonds.
Every year the Trustees of the US Social Security and Medicare trust funds provide their report on the current and projected financial status of these programs.
For investors in search of a way to boost income and diversify their bond portfolios, now may be the time to consider what local-currency emerging-market bonds offer.
“It is a Riddle, Wrapped in a Mystery, Inside an Enigma: but Perhaps There is a Key” - Winston Churchill
A Forbes article of July 1974 profiled John Templeton and highlighted some of the wisdom he implemented in his investment process. The article touched on his discipline of consistently praying to God “for wisdom and clear thinking” at the start of each directors meeting for the Templeton Growth Fund.
We suspect that the Fed has already lost substantial credibility, but that investors prefer to look the other way as long as financial-asset values remain intact. It is, in our opinion, an “everybody knows the dice are loaded” situation that could portend an even sharper, impossible-to-escape downdraft once confidence is dislodged.
At eight years, the current economic recovery is the third longest on record. Personal income, consumer spending, household assets, and net worth, are all at record highs. Stock markets are at record highs. Corporate profits are within striking distance of their all-time highs. Federal tax receipts are at record highs.
This is how obsessive adherence to process unfolds into irrelevance.
I work in a large financial organization and my team is trying to make a significant business decision. It’s a collaborative culture, which we tout as being very positive. However, when decisions need to be made, we often get stuck because everyone has to have a voice and be heard.
Invesco Fixed Income shares its views of rates around the world.
Ray Dalio, chairman of Bridgewater Associates, wrote last week that the global economy is heading toward a new stage where markets won’t get the same level of support from the global monetary policy makers. “The directions of policy are reversing,” he noted.
Markets seem not to care what the media or polls have to say. The Dow Jones Industrial Average continues to hit new all-time highs. Even though it’s stalled a few times, the “Trump rally” appears to be in full-speed-ahead mode, more than eight months after the election.
Any news that emerged from last week's G-20 Summit in Hamburg, Germany was bound to be overshadowed by the high theater of the first-ever meeting between U.S. President Trump and Russian President Vladimir Putin. As a result, the biggest actual development from the Summit garnered very little attention in the American media. In fact, it did not involve America at all.
A review of last month’s market-moving events across countries and asset classes.
Here, I share the team’s overview of what happened in the emerging-markets universe in the second quarter of 2017, including some key events, milestones and data points to offer some perspective.
Highlighting the deteriorating trend in Chinese corporate financials has been an annual feature our of this blog.
Portfolio Manager Chuck Royce and Co-CIO Francis Gannon look at both 2Q17 and the year’s first half and see a consolidating asset class ready to make its next move up.
K2 Advisors seeks to add value through active portfolio management, tactical allocation and diversification across four main hedge strategies: long short equity, relative value, global macro and event driven.
The Fed’s “balance sheet reduction” may have profound implications for the dollar, gold, stocks and bonds. We’ll provide an outlook.
We update our geopolitical outlook for the remainder of the year. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of the year.
It never fails that when you decide to slip out of the office for a break, the markets will act up. Last week was not an exception to the rule as investor anxiousness continued to cause activity on trading desks. Rising global yields continued to stress risk parity funds and leveraged hedge funds who were positioned for lower interest rates.
To a large extent, the U.S. financial crisis was actually made by the Fed… It was ultra-low rates that fueled the search for higher yield that enabled creatively engineered mortgage products (CDOs, CDOs of CDOs, adjustable rate and no-doc mortgages and AAA-rated garbage).
US equities reached a new one-month low late last week before rebounding on Friday. In particular, NDX found support right on its mid-May low. This is now an important line in the sand, with implications for SPY as well; so long as the Thursday low holds, look for higher prices.
During the 35 year secular bull market that began in October 1981, there were a number of sharp increases in yields in which bond prices fell. But investors who held on were bailed out by the secular bull market and eventually recovered all the losses and with gains to show for their patience.
Over 90 advisors responded to a survey I conducted earlier this year with Advisor Perspectives. Here are the important insights into which activities help find new business for RIAs and IBDs.
Fully 1.4% of the 2.0% average annual real GDP growth observed since the beginning of 2010 has been driven by growth in civilian employment. As slack labor capacity has slowly been reduced, the unemployment rate has dropped from 10% to just 4.4%. That jig is up.
Of the 14 commodities we track closely at U.S. Global Investors, wheat rose to take the top spot for the first half of 2017, returning more than 25 percent. The grain was followed closely by palladium—used primarily in the production of catalytic converters—which gained 24 percent.
The environment for U.S. and global stocks continues to be in decent shape, but some risks are elevated and the possibility of a pullback exists. A notable potential driver of bouts of volatility could be U.S. and global central bank policy as they sail toward monetary policy normalization.
The macro data from the past month continues to mostly point to positive growth. On balance, the evidence suggests the imminent onset of a recession is unlikely.
With $504 billion flowing into passively managed products and $316 billion fleeing actively managed mutual funds in 2016 in the U.S., the active-versus-passive debate appears to be tipping in favor of passive management.
The second quarter of 2017 closely mirrored the first. Global markets continued positive returns for many strategic domestic and global equity investors.
As growth/momentum begins to wilt under the weight of ever increasing expectations, value should once again attract investor attention.
The recently-ended second quarter of 2017 needed a bit more sugar from technology-driven Nasdaq to make it perfect for investors. While it was a nearly solid quarter all around for equity and risk-seeking investors, the June pickup in Nasdaq volatility left some with a sour taste in their mouth.
Normalization of the European Central Bank’s (ECB) monetary policy never was a question of “if” but one of sequencing, timing and calibration. Financial markets reacted to ECB President Mario Draghi’s speech in Sintra this past week in a way suggesting the ECB might change all three of those policy normalization parameters.
It’s been a really good year for equities so far. Paradoxically, this is sowing the seeds of anxiety. Valuations are higher, so people are worried about a correction. Subdued volatility has stoked fears of renewed turbulence.
As regular readers of the Absolute Return Letter will know, we run a list of structural mega-trends which will form the world as we know it for many years to come – and that list drives our investment strategy.
Quick! What are your firm’s core values? What about core purpose? Mission? How about your ideal client profile?
A holiday-interrupted week is loaded with important economic data. Since many market participants will skip Monday to stretch their weekend, the action will focus on Friday’s employment situation report.
I think that now is a good time to take another look at royalty companies. Here are the top six things I believe investors should know about this specialized sector.
