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China: Policy and Fundamentals Converge
by Hayden Briscoe of AllianceBernstein,
We recently commented on the improving trends in China’s property industry. It’s not widely understood, however, how the country’s various economic reforms are combining to create a base for future growth. A case in point concerns the property sector and capital market liberalization.
The Case for Gold to Protect Clients’ Wealth Shorting the Federal Reserve
by Michael Lebowitz,
This article presents the case for an asset that will help managers protect their clients and uphold their fiduciary duty owed to them. I’ll explain why gold is a powerful hedge that will protect your clients’ wealth, but first I’ll look at the history of trade and currencies and how gold evolved to become a global store of wealth.
Green Shoots in China?
by Nick Niziolek of Calamos Investments,
Over the next weeks, there will be a great deal more data for us to evaluate, including foreign reserves data on October 6. Signs of stabilization in foreign reserves and savings deposits would point to a reduced risk of capital flight, which would give us more confidence in a gradual depreciation of the renminbi. We’ll also be watching for mid-month data on imports. If these green shoots begin to take hold and the markets can become comfortable that a hard landing is off the table for the near term, we wouldn’t rule out a fourth quarter rally in Chinese and global equity markets.
Recession Watch
by John Mauldin of Mauldin Economics,
If recovery from a banking crisis can take ten years and we are only seven years in, I expect (barring aliens) that we have a few more years to go. A slow, muddle-through recovery may not be exciting – but it’s better than the alternatives. As I noted at the beginning, I am quite worried about the possibility of a recession in our slow-growth, barely limping along at stall speed economy.
The 10 Most Competitive Countries in the World
No new countries have entered or exited this exalted list, and there was very little rank-shuffling. For the seventh consecutive year, Switzerland is the most competitive country. For the fifth straight year, Singapore is number two. The U.S. comes in at number three for the second year. And so on.
The Real Burden of Low Interest Rates
Almost the entire world is concerned about the high levels of debt, should interest rates begin to rise again, but we are not. Don't get us wrong; a meaningful increase in debt service burdens could do substantial damage to a global economy so loaded with debt. We just don't think it is going to happen.
Economic growth and inflation are likely to stay comparatively low for many years to come, and so are interest rates, but that raises another question. What damage can very low interest rates for an extended period of time actually be expected to do?
Designing a Dividend Growth Portfolio for a Specific Retirement Yield Objective: Part 1
by Chuck Carnevale of F.A.S.T. Graphs,
Managing an investment portfolio is a very personal matter. Consequently, the most important consideration is to design a portfolio that meets your own unique goals, objectives and risk tolerances. Everyone is different, and consequently, every investment portfolio can and should be appropriately different as well. Stated more straightforwardly, I do not believe in cookie-cutter or one-size-fits-all approaches to portfolio design.
Equities May Remain Trendless Until More Clarity Emerges
Sentiment was negative for most of last week, as investors focused on
continued uncertainty over Federal Reserve policy, slowing growth in China
and emerging markets and ongoing weakness in commodities. Stock prices
bounced on Friday following comments from Fed Chair Janet Yellen that a
rate increase was looking more likely in 2015. Nevertheless, equities finished
in negative territory, with the S&P 500 Index falling 1.4%. The health care, materials and industrials sectors came under pressure, while utilities, consumer
staples and financials finished higher.
Staley Cates on Why Active Management Wins in the Long Term
by Robert Huebscher,
Staley Cates is president and chief investment officer of Southeastern Asset Management, manager of the Longleaf funds. In this interview, he says, “the passive movement is not just a big trend. It is a bubble.” He explains why passive investing has made it hard for value investors to outperform.
The ABCs of Impact Investing
by John Appleby,
Impact investing is a small but growing segment of the financial landscape. It is coming to the fore as individual investors seek to “do good while doing good.” Groups from wealthy entrepreneurs to the G8, the UN and the Pope are talking about the subject. Here’s what advisors need to know if they want to serve clients who strive for “impact” with their investing.
Weighing the Week Ahead: Will global weakness drag down the U.S. economy?
The recent Fed non-decision on interest rates increased worries about global economic weakness. Trading in commodity markets underscores a widespread perception of a potential recession. The week ahead is packed with fresh economic data, including the most important reports. The punditry will be asking:
Will the U.S. economy succumb to global weakness?
Strengthen Your Core
Core bond investors tend to have a strong “home bias.” But our research shows that global bonds have offered comparable historical returns and considerably lower volatility than local markets over the long term. In addition, a global approach offers protection when local rates climb.
Balloons in Search of Needles
by John Mauldin of Mauldin Economics,
It would be hard to miss an analogy to the stock market. Everything’s peaceful and calm, you’re drinking some fabulous wine, eating some fantastic fresh game and fish, looking at all the beautiful animals as you drift easily with the current. Anybody can steer the boat in a bull market. Until the rapids hit and the bottom falls out.
International Economic Week in Review: The Commodity Super-Cycle Explained, Edition
by Hale Stewart,
Despite recent financial turmoil, no one has provided a concise explanation of the commodity super-cycle, one of the primary macro-economic forces causing recent volatility. That is, until now. In a September 21 speech, Bank of Canada Governor Stephen Poloz offered the following explanation:”
How Will These Leaders of 4 Billion People Change the World?
This week the U.S. played host to three prominent and illustrious leaders to billions of people: Chinese President Xi Jinping, Indian Prime Minister Narendra Modi and Pope Francis. Among them, they lead—either politically or spiritually—nearly 4 billion people worldwide, more than half of everyone living on the planet right now.
In Search of the Phillips Curve
by Carl Tannenbaum of Northern Trust,
Macroeconomics students spend a good bit of class time learning about the Phillips curve, and it is probably etched permanently in their minds. The Phillips curve suggests that there is an inverse relationship between inflation and unemployment in the short run.
Are the Bulls Regaining Their Footing?
Uncertainty surrounding the Federal Reserve continues after its punt of rate hikes at its most recent meeting. But as the market gets more clarity on monetary policy and given a still-growing US economy, the bull market should slowly reestablish itself, albeit with bouts of volatility. Further support should come from global growth in areas that are net beneficiaries of the plunge in commodity prices.
Fed Implications
by Burt White of LPL Financial,
The Federal Reserve’s (Fed) decision not to raise interest rates at its September 17 policy meeting was undoubtedly the biggest event of last week. Although not a big surprise, besides Donald Trump (and perhaps China), the Fed is all that anyone is talking about these days. This week we share some of our perspective on what the Fed’s decision may mean for the stock market and offer some investment ideas.
Meet Jeremy Corbyn
On September 12, Jeremy Corbyn, a longtime Member of Parliament, was elected as the new leader of the UK’s Labour Party. In this report, we begin with a short biography of Corbyn followed by a description of how he won his party’s leadership role. With this background, we explore Corbyn’s long held policy positions and their potential impact on UK policy. We offer our reflections on Corbyn’s win, including an examination within the context of other political developments in the West. As always, we conclude with potential market ramifications.
Middle-East / Africa: Economy Trends Update: July 2015
by Team of Thomas White International,
During the second quarter and July, the countries under our coverage in the Middle East and Africa region continued to battle global macroeconomic problems and, in some cases, hurdles specific to their own economies. The largest among these countries, resource-rich South Africa, struggled to boost growth amid the downturn in the global commodities market and a power shortage at home.
US High Yield: Energy Is Lagging, but Consumers Are Set to Spend
Weak commodity prices have made this year’s US high yield story a “tale of two markets.” Year-to-date returns for the overall high yield market were a meager three basis points (0.03%) through Aug. 31. However, if you peel back energy and metals and mining, the rest of the asset class delivered a respectable 2.6% total return over the same period.
Equities Fall After the Fed Fails to Raise Rates
U.S. equities were little changed last week, with the S&P 500 declining 0.1%.
Stocks posted gains early in the week before falling on Thursday and Friday
after the Federal Reserve announced it would hold rates steady. For the week,
utilities, consumer staples and health care outperformed, while materials,
telecommunications and financials came under pressure.
International Economic Week in Review For Sep. 14-18; Asian Slowdown, Edition
by Hale Stewart,
Analysts’ recent adjustments lowering global growth projections are in line with recent events; China’s economy continues slowing. This lowers commodity prices, which decreases economic growth of commodity exporting countries. Hence, the primary causation of Australia’s below trend growth and Japan’s weaker economic performance. The US is somewhat immune; Chinese trade accounts for a fraction of US GDP, limiting the impact. The EU is a bit more exposed, due to their increased reliance on trade.
Here Are Two Ways Investors Can Take Advantage of the Fed's Uncertainty
Although interest rates could still be hiked in one of the two remaining times the Federal Open Market Committee (FOMC) meets this year, I’m inclined to think they’ll stay near zero until at least 2016. The decision is a welcome one for both gold demand and new home purchases. When rates rise, gold becomes less attractive for some investors, who are encouraged to exchange their no-yielding gold for income-producing assets.
Merkel Opens the Gates
by John Mauldin of Mauldin Economics,
This is all well and good for nations like Germany that need immigrants, but much of Europe is really not in need of new workers, given their present severe unemployment problems. Not to mention that in those countries budgets are already strained and taking on the task of housing tens of thousands of immigrants and refugees is not cheap.
Groundhog Day at the Fed
by Peter Schiff of Euro Pacific Capital,
Every dictator knows that a continuous state of emergency is the best means to justify tyrannical policies. The trick is to keep the emergency from breeding so much paranoia that routine activities come to a halt. It's best to make the threat external, intangible and ultimately, unverifiable. In Orwell's 1984 the preferred mantra was "We've always been at war with Eurasia," even though everyone knew it wasn't true. In its rate decision this week the Fed adopted a similar approach and conjured up an external threat to maintain a policy that is becoming increasingly absurd.
More Volatility on U.S. Horizon Has Sights Turning to Asia
by Russ Koesterich of BlackRock,
After weeks of struggling, global equities stabilized last week. In the U.S., the S&P 500 Index rose 2.08% to 1,961, the Dow Jones Industrial Average climbed 2.05% to 16,433, and the tech-heavy Nasdaq Composite Index advanced an even stronger 2.97% to end the week at 4,822. Meanwhile, the yield on the 10-year Treasury rose from 2.13% to 2.19%, as its price correspondingly fell.
Choosing Common Stocks That Make Sense for Your Retirement Portfolio: Part 2
by Chuck Carnevale of F.A.S.T. Graphs,
Choosing the most appropriate stocks for the common stock portion of your retirement portfolio is vitally important. In part 1 of this series found here I presented the 6 broad categories of stocks (businesses) that renowned mutual fund manager Peter Lynch presented in his best-selling book "One Up On Wall Street." I contend that the 6 categories that Peter Lynch wrote about establish a solid foundation of understanding of what’s generally available in the common stock universe.
Duration Issues Related to Seasoned Residential Mortgage Backed Securities
Fixed income practitioners traditionally think of duration as a security’s first-order sensitivity to changes in interest rates. Thus, a duration of X years equates – roughly – to a change in price of X% for every 100bp move in rates. And since the discounting formula for bond prices has this “rate” factor in the denominator, an increase in rates represents a decrease in the bond’s price, and vice-versa. Simple, right? Maybe not!
It’s Someone Else’s Money
by Jeffrey Saut of Raymond James,
Indeed, due to expensive valuations, lack of revenue/earnings growth, slow GDP, China, politics, etc., the stock market had been in a virtual stalemate paralysis until the middle of July, having crossed above/below “go” so many times the only way to make money was to erect a toll gate at “go” (think the game Monopoly). And no wonder, frustration has reigned through the first six months of the year.
Will She or Won’t She . . . Raise Rates, That Is?
The big news this week is the Federal Reserve’s rate-setting meeting tomorrow and Thursday. This is one of eight meetings held each year, approximately every six weeks. The remaining ones in 2015 are in October and December. The reason this matters is because, once again, the Fed has to decide whether to start raising rates or not. I have argued before that, economically, it doesn’t really matter that much, but from an investor confidence perspective—and thus for the markets—it does.
The Fed: More Noise Than Meaning
Get on with it already! Don’t get us wrong, we know this is the “Super Bowl” for business journalism (anyone have tix to the ESPN party?), but raising rates from 1/8th to 3/8ths of 1%, after six years of economic recovery should be a no-brainer.
Our suggestion: spend the week analyzing companies and investment products. Don’t get sucked into the idea that there is some genius trading strategy for how to deal with this.
That’s right; ignore it. Don’t read the statement and don’t watch the press conference.
The Beauty of Truth and the Beast of Dogma
by John Hussman of Hussman Funds,
When you examine historical data and estimate actual correlations and effect sizes, the dogmatic belief that the Fed can “fine tune” anything in the economy is utter hogwash. Truth, on the other hand, is beautiful. Economic relationships that are supported in real-world data are a sight to behold.
A Turn of the Tide Revisited
US equities reached a major inflexion point in the year 2000. It was historic because it represented both a secular and primary reversal. A primary trend revolves around the business cycle and typically lasts 2-3 years, whereas a secular one lasts much longer and embraces several cycles. Our objective here is to revisit an article published earlier this year in which we pointed out some ominous signs for US equities. At that time some trend reversal signals, such as negative long-term moving average crossovers, were required as confirmation.
Designing the Appropriate Common Stock Retirement Portfolio: Stock Selection Options Part 1
by Chuck Carnevale of F.A.S.T. Graphs,
What is the best way to design or construct a common stock portfolio? This is a question I am often asked and my short answer is always the same - it depends. The truth is, there is no perfect method or strategy for designing a stock portfolio that is right for every individual investor. However, there are principles of sound investing that every investor can follow and apply when designing a common stock portfolio that’s just right for them.
Are You Investing in Tomorrow's Dividend Growers?
by Clint Harris of Invesco Blog,
Some 420 companies in the S&P 500 Index pay dividends. If you own a fund that invests in dividend-paying companies, it’s critical for you to understand your fund’s selection criteria. Does it look for increasing dividends? Stable dividends? High dividend yields? These differences can matter greatly to your results.
Results 7,601–7,650
of 10,168 found.
