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Gundlach v. Yellen: Will the Fed Raise Rates?
by Robert Huebscher,
On Friday, Fed Chairwoman Janet Yellen said that the nine-year wait for an interest-rate increase would likely end this year. Three days earlier, though, Jeffrey Gundlach said that a rate increase this year is unlikely, given the mix of bad news and uncertainty in the world markets. Which view prevails will be the focus of bond market participants in the months ahead.
Weighing the Week Ahead: Will Falling Earnings Sink the Stock Market?
There is special interest in 2nd quarter earnings both as a read on the economy and trends in costs and margins. Ordinarily the focus would be Fed Chair Yellen’s House testimony on Wednesday and the reprise on Thursday. She has stated her viewpoint so frequently – rate hike possible, data dependent, expecting better growth – that a surprise is unlikely.
Greece and the King of Asteroid 325 (and The One Lesson to Learn Before a Market Crash)
by John Hussman of Hussman Funds,
Last week, the price of Greek government debt soared on hopes of an 11th hour stick-save bailout by the European Union. Unfortunately, that price jump still left Greek bonds priced to reflect a default probability of 100% at every maturity. The jump only reflected an increase in the amount that bondholders evidently expect to recover in default, raising the implied recovery rate from the recent low near 30% to something closer to 50%. Put another way, the bond market has fully priced in the likelihood of a default coupled with a major haircut on Greek debt.
The June Unemployment Rate Fell to 5.3%, but ...
by Paul Kasriel of The Econtrarian,
The simultaneous decline in the unemployment rate and the labor force participation rate is consistent with the notion that the unemployment fell because people dropped out of the labor force due to discouragement over poor job prospects. So, recork the champagne, right? Wrong.
It’s Not Over Till the Fat Lady Goes on a P/E Diet
by John Mauldin of Mauldin Economics,
The answer to the seemingly arcane question of whether we are in a secular bull or bear market makes a great difference in the proper positioning of your portfolios. And getting it wrong can have serious consequences.
Global Investors: You Should Be Paying Attention to this Economic Indicator
In addition to our own macro models, BCA Research , a highly respected independent research company, pointed out that PMIs in developing economies have plunged to new lows. The International Monetary Fund also revised downward its global growth forecast for 2015. On this account, bad news is good news, as central bankers are scrambling to stimulate economic growth.
International Economic Week in Review for July 6-10; It's all Greek to Me, Edition
by Hale Stewart,
Greece is obviously the big story of the week. As of this writing, it appears a compromise might be in play. But this is a very fluid situation, so that could change within an hour. Several weeks ago, I noted that given the massively high unemployment rate and GDP contraction, there is little left for Greece to cut without becoming a failed state. Be that as it may, it appears even more cuts are coming.
CIO Newsletter
by Ritesh Jain of Tata Asset Management,
In this edition of my newsletter, I have tried to address one of the most common questions that investors have been asking me these days; what to make of the noise surrounding us and how India is placed to weather this volatility. Let me tell you, it's not going to be a smooth ride. In the last 6 months, there has been too much going on worldwide.
More of the Same
by Scott Brown of Raymond James,
The U.S. economic data reports have remained mixed, consistent with a moderately strong pace of growth in the near term. The June jobs data suggest that a September Fed rate hike may be a closer call than thought earlier. Meanwhile, Greece’s economy is in tatters. The country has to face the burden of further austerity or the chaos of a euro exit.
The Fed After the "No"
by John Canally of LPL Financial,
The “no” vote in the Greek referendum on July 5, 2015, will potentially raise the level of economic and financial market volatility in the coming weeks as global investors assess the market and economic risks associated with an increasingly likely Greek exit (Grexit) from the Eurozone and from the Eurozone’s common currency, the euro.
Update on Greece
What happens next in Greece? The immediate impact of the referendum will be to greatly intensify financial and economic pressures in Greece. Now without a bailout, Greece will struggle to find the cash to pay for pensions and public sector wages. The government’s only option may be to make these payments in some form of IOUs in the weeks ahead.
The Summer Solstice and Mid-Year Thoughts
by Jeffrey Saut of Raymond James,
Reflecting on the first half of 2015, while littered with geopolitical events, shows very little upside progress for the S&P 500 (SPX/2076.78). In fact, my notes of more than 50 years show no other time when the SPX was never up or down more than 3.5% year-to-date (YTD).
Climate Change Lessons for Your Portfolio
by Michael Edesess,
Here’s an argument that sheds light not only on the climate change problem, but also on the problem of investing a portfolio. The analogy is not a stretch. It may even tell us as much about the solution to a long-standing investment conundrum as it does about the response to climate change.
Weighing the Week Ahead: Will FedSpeak Interrupt the Lazy, Hazy, Crazy Days of Summer?
In one sense, the week ahead should be a quiet, dull semi-vacation. As Nat King Cole explained, the Lazy-Hazy-Crazy days of summer – pretzels, beer, and bikinis that never got wet.
It is the lull before earnings and includes a light economic calendar. Will the A-Team need to return from the beach because of Greece? Or will it be a quiet week, disturbed only by an avalanche of FedSpeak and consequent punditry?
One way or another, I think we will (finally) put the Greek drama behind us and resume the familiar debate about the Fed.
A Greek Play
The second quarter of 2015 experienced heightened bond market volatility in anticipation of the Fed’s first rate increase as well as international equity volatility involving Greek debt and Chinese equities. Despite whipsawed volatility, the major domestic and international equity indices ended close to where they started.
The Best Way to Judge Past Performance: Part Two
by Chuck Carnevale of F.A.S.T. Graphs,
On virtually every financial website on the planet there is a never-ending daily stream of stock tips and recommendations. Consequently, the investing public is literally flooded with information and advice regarding what stock to buy today or not to buy. Some of what is offered is supported by factual information and logic, but unfortunately, much of what is offered is merely based on the opinion of the author. This presents quite a challenge to the prudent prospective investor seeking sound advice or guidance.
Greece: Thinking the Unthinkable
by Darren Williams of AllianceBernstein,
Yesterday’s referendum has pushed Greece closer to euro-area exit, which would plunge the region into uncharted waters. But policymakers have powerful tools to combat contagion and prevent a Greek accident from triggering a wider recession.
The Big Picture
by Peter Schiff of Euro Pacific Capital,
The past four years or so have been extremely frustrating for investors like me who have structured their portfolios around the belief that the current experiments in central bank stimulus, the anti-business drift in Washington, and America's mediocre economy and unresolved debt issues would push down the value of the dollar, push up commodity prices, and favor assets in economies with relatively low debt levels and higher GDP growth. But since the beginning of 2011, the Dow Jones Industrial Average has rallied 67% while the rest of the world has been largely stuck in the mud.
A Week of Unseen Things
by John Mauldin of Mauldin Economics,
We Americans are celebrating our Independence Day this weekend. The news our ancestors read on this day in 1776 wasn’t so great – but the US survived its rough start. China, Puerto Rico, and Greece will survive, too. But the decisions their government make, just like the ones our fledgling government made all those years ago, will make a great deal of difference. Let’s get past the gloom and doom to see if we can find some good news.
International Economic Week in Review For June 29-July 30; Greece and Canada Creating Problems, Edit
by Hale Stewart,
Greece is obviously the big wild card going into next week. And while the damage appears to be contained for now, there is no guarantee we won't see a negative feedback loop filter out into the market and EU economy. Canada's four months of GDP contraction are also getting a bit concerning. Even though we knew this was coming, it's still a most unwelcome development. However, other economies are at least holding their own for now.
Home of the Free, Land of the Entrepreneur
Where else but in America can a startup such as Uber be valued at $50 billion, higher than 80 percent of the companies in the S&P 500 Index, only six years after its founding? Where else but in America can someone reach billionaire status by inventing a new type of hosiery, as Sara Blakely did with Spanx? Before her now-ubiquitous undergarments were worn by women—and now men—all over the globe, Blakely was so broke that she had to write her own patent without the help of an attorney.
Eurozone Contagion Fears Flare as Greek Crisis Enters Crucial Phase
Whatever the outcome of the Greek referendum on Sunday (July 5), the result is likely to mean more uncertainty and possibly pain for the people of Greece. So far, according to David Zahn, head of European Fixed Income, Franklin Templeton Fixed Income Group, the economic fallout of the crisis appears to be mostly contained within Greece, and the likelihood of longer-term contagion to other eurozone economies seems to be limited.
Greek Default is Everyone’s Fault
by Carl Tannenbaum of Northern Trust,
We do not expect widespread global contagion, but reducing the risk of this outcome will require renewed cooperation between Greece and its creditors. They created the problem together, and neither side can claim the high ground. It is about time that they came back down to earth and worked this thing out.
Greek Contagion Fears Likely Overblown
by Gary Black of Calamos Investments,
We remain bullish on global equities despite the expected near-term volatility, as we believe the Greek situation will be resolved in a manner that the markets will view constructively. Although the Greek debt drama has veered off script over the past few days, we believe investors have overdiscounted the impact of Greece defaulting on its IMF loan. We expect volatility will stay high in the run up to the Greek austerity referendum scheduled for July 5.
A Return to Fundamentals?
June was a very eventful month, in particular here in Europe. Greece went from bad to worse, and the Greek people have now been asked to vote on their own destiny in a referendum scheduled for Sunday 5 July, which we expect to return in a 'Yes' vote.
However, Greece is not the only subject in the July Absolute Return Letter. Financial markets have in many ways behaved oddly since the near meltdown in 2008. The objective of this month's letter is to look at whether we are finally beginning to see some sort of normalisation - as in a return to the conditions we had prior to 2008...
The Smartest Man is Wild about Innovation
by Byron Wien of Blackstone,
For the past fifteen years I have written annually about a person I have come to call “The Smartest Man in Europe.” For new readers, he is a finance person in his 80’s who has built his reputation by identifying important trend changes early and putting serious money behind his conclusions. Descended from a mercantile family that operated canteens selling food and weather protection along the Silk Route, he was educated in Europe, trained in New York and returned home to take advantage of the wealth-creating opportunities resulting from the post-war recovery.
Epic Uncertainty: Markets React to Greek Debt Crisis
by Laura Sarlo of Loomis, Sayles & Co.,
It's a tense standoff between Greece and its international creditors. Unless both sides dramatically return to the negotiating table, Greece looks set to default on its €1.5 billion International Monetary Fund (IMF) loan payment on June 30.
Greece: Weighing the Risks
by Milton Ezrati of Lord Abbett,
It seems Greece has chosen default and capital controls. Even so, Athens can still cut a deal that would relieve both. Either way, it will remain unclear for a while whether the country stays in the common currency. In some respects, this situation is entirely manageable. That fact has fostered a dangerous complacency, for in other respects, this situation carries considerable risk—for the eurozone, for European finance in general, and for global finance.
A Mid-Year Assessment of Our Ten Predictions
We have described 2015 as the year when investors transition from disbelief to
belief, or from skepticism to optimism. Sir John Templeton coined the phrase,
“Bull markets are born on pessimism, grow on skepticism, mature on optimism
and die on euphoria.” We believe we are entering the “optimism” phase.
Evaluating Investments versus Insurance in Retirement
by Wade Pfau,
In the past, I’ve described two fundamentally different philosophies for retirement-income planning: probability-based and safety-first. Those philosophies diverge on the critical issue of where an individual must place their trust: in the risk/reward tradeoffs of an equity portfolio, or on the contractual guarantee of insurance products. Here’s how to overcome that challenge and integrate the two approaches in a retirement plan.
Stop Ignoring Millennials: They’re The Future of Your Company
by Lauren Hong,
Millennials are bucking trends day-in and day-out. As of 2013, they’re officially the largest, most diverse generation in the U.S. As a financial advisor, you cannot ignore them. Here’s how to include millennials in your marketing plan.
Don’t be Surprised - Speech to CFA Society of Chicago
by Stephen Romick of FPA Funds,
I’m reminded of a gentleman who discovers a genie in a bottle. Granted one wish only – apparently even genies have pricing power – the man asks for peace in the Middle East. The genie backs away and says, “That’s way too difficult. Give me something easier.” The man ponders his options and asks the genie instead, to help him pick a good mutual fund. The genie quickly responds, “Let me get to work on the Middle East.”
"Debt Gone Wild" - Debt Funded Stock Buybacks Soar
by Lance Roberts of Streettalk Live,
I penned an article recently discussing the many measures that corporations have used in recent years to "beat" Wall Street estimates. Of course, the beating of Wall Street estimates, so adamantly adored by mainstream media, always ignores the fact that estimates are continually reduced so that companies to "beat" them. This is the equivalent of moving the "target to the arrow."
Grantham: Stocks Will Continue Upward until the Election
by Justin Kermond,
Jeremy Grantham says equity valuations are heading toward the “two-sigma” level that is the requisite threshold for a true bubble. At some point – which is not imminent – he says a “trigger” will precipitate the reversion back to mean levels. The market will continue to deliver positive returns until the next election, according to Grantham.
Is The Decline in the Euro Over?
by Jennifer Thomson of GaveKal Capital,
Though downward pressure on the EUR/USD exchange rate has eased a bit since April, we can’t yet say for certain that the trend has reversed. We will be watching these charts, in particular, for any clues as conditions in the Eurozone evolve over the coming weeks.
High Drama for the Hellenic Republic
by Carl Tannenbaum of Northern Trust,
Hard realities and hardened positions are combining to create a dangerous game of financial chicken between Greece and its creditors. We can only hope they avoid a headlong collision that could create a lot of collateral damage.
Results 7,801–7,850
of 10,168 found.
