November turned out to be an excellent month for the major U.S. stock indexes, with all three, plus the Russell 2000 index of small caps, hitting record highs.
Invesco Fixed Income utilizes a framework based on the idea that changes in growth, inflation and financial conditions drive much of market beta performance, and that understanding these “macro factors” can help us understand market conditions and price action.
At its 8 December Governing Council meeting, the European Central Bank (ECB) extended its asset purchase program by nine months to the end of December 2017, but at a rate of €60 billion per month – a decrease from €80 billion currently.
Multi-asset investment strategist Wouter Sturkenboom looks at the Italian referendum outcome and its potential impact on 2017 global markets for investors.
Donald Trump’s largely unexpected victory of the U.S. presidential election echoed the Brexit vote of just six months prior, reinforcing an ongoing fundamental shift in political currents and capital markets around the globe.
The recent backup in yields is happening at an unfortunate time. In nominal terms, debt held by the public is at an an all-time high (approximately $14.3 trillion).
U.S. equities finished mostly lower last week, with the S&P 500 Index down 0.9%. Rising interest rates and the climbing U.S. dollar weighed on sentiment, and investors started turning from broad hopes of fiscal stimulus and tax reform to wondering about specifics.
The Sentix Euro Break Up Index is on the rise again, up to 24.08 in the latest monthly reading (as of 11/30/2016).
Don’t be lulled into complacency by thinking that severely hostile market conditions have to resolve into immediate market losses. That’s not the way these environments work, and they never have.
While on the surface the Italian Referendum appears to be only about the structure of government power and Prime Minister Matteo Renzi’s desire to pass economic reforms, beneath the surface is a serious financial issue that has the potential to impact not just Italy, but Europe and beyond. This may sound small and meaningless to you and me but it is not.
As we look toward 2017, the general near-term outlook for international equities continues to appear somewhat mixed, given a combination of global macroeconomic risks.
It finally happened. For the first time since 2008, the Organization of Petroleum Exporting Countries (OPEC) agreed to a crude oil production cut this week, renewing hope among producers and investors that prices can begin to recover in earnest after a protracted two-year slump, one of the worst in living memory.
Italians are headed to the polls this Sunday (and thus this letter is reaching you a little earlier than usual) – but no one is quite sure what is on the ballot. On the surface, the voters are considering whether to approve constitutional reforms that should make the government operate more effectively (or not, depending on your point of view). But many people think the real question is whether the current government should stay in power and whether Italy should remain yoked to the Eurozone.
Secular forces in the global economy suggest we aren’t likely to see a new paradigm of stronger growth, higher inflation and higher interest rates under the Trump administration.
The Federal Reserve’s intent to raise rates, coupled with the election of Donald Trump, may have ignited a Great Rotation from bonds to equities, calling into question the relative safety of bonds that investors have experienced over the past three decades.
As the markets close the books on another tumultuous year, Neil Dwane, Global Strategist for Allianz Global Investors, says investors should keep watch on the rise of populist politics, China’s re-emergence as a global growth engine and a renewed focus on government spending as interest rates remain low.
The President-elect has called for $1 trillion investment in infrastructure, much of which will depend on public-private investment for funding. For municipal bond investors, the private sector’s increasing role in financing public transportation projects may provide an opportunity.
The board’s expertise constitutes a valuable input into our investment process.
Like other traditional bond benchmarks, key European investment grade bond indexes have changed dramatically over the last five years.
A pending US interest-rate hike and worries about inflation may have persuaded investors to start avoiding bonds. We think that’s a mistake, especially when it comes to high yield, a sector that often thrives when rates rise.
Our recent research into the small-cap market shows a connection that many asset allocators may not be aware of.
Russ explains why the post-election selloff in bonds may be a longer-term, not temporary, phenomenon.
Trump’s fiscal and immigration policies appear likely to boost the near-term inflation trajectory.
Does Donald Trump’s election victory mean that US investors should brace for higher inflation? Financial markets certainly think so. It may be time for investors to take note.
Listen, before we go through a litany of economic charts that pour some cold water on the recent bout of optimism regarding US economic growth prospects we want to stress that we don’t believe economic growth is about to fall off of a cliff.
Core equity managers have struggled to deliver this year in a rapidly changing market environment. We think exposure to volatile equity factors—which is often unintended—may be the culprit.
We agree that higher tax rates, more regulation and increased government spending are wet blankets on economic growth. We also think these policies hurt the very people they're designed to help.
The First Eagle Global Income Builder Fund (FEBIX) seeks to provide meaningful and stable income that persists over time and holds its value in real terms. It has approximately $1.2 billion in assets and is a leading performer in its Morningstar peer group. I spoke with two of its co-managers, Kimball Brooker and Edward Meigs.
Since Donald Trump's victory in the US presidential election, stock markets have rallied and the dollar has soared. Explaining these unforeseen market responses could provide a glimpse into what the next few months hold in store for the US economy.
Chief Investment Officer Steven Vannelli, CFA, hosted a conference call to share the investment team’s analysis of the global equity and fixed income markets one week after the election.
The question now is whether Federal Reserve Chair Janet Yellen will put the brakes on the so-called Trump rally. She asserts that Fed policy is not politically motivated, but I wonder how many people actually believe that. She’s already criticized Trump’s plans to tear up or at least significantly weaken Dodd-Frank Wall Street Reform.
The era of ultralow interest rates may be over. This could burst the safety bubble in equities—and create new opportunities in stocks that have been out of favor for a long time.
If U.S. inflation rises above 2%, how much inflation overshooting would the Fed tolerate? The Bank of England’s policies may provide clues.
Prime Minister Modi’s politically risky push to tamp down India’s outsized underground economy by pulling the largest rupee bills out of circulation is causing real disruption among consumers and businesses.
One of the most fascinating aspects of current markets around the world is the degree to which central banks appear to be influencing the movement of not only bond markets but also equity markets.
Bond investors have had a rough ride in November. The Barclays Global Aggregate Bond Index plunged by 5% during the last two weeks just before and after the election...
To me, it looks like investors have almost fully embraced the idea of low growth and low inflation. If either of these factors surprise to the upside, we could exit the relatively narrow trading range the market has been in for the past few months.
Since the pre-election low on November 4, the S&P 500 is up 4.7%, while the Russell 2000 (small caps) is up a whopping 13.8%—rallies which have confounded many investors given the pre-election consensus that stocks would fall on the uncertainty associated with a Trump victory.
What are the most important investment implications that you and I and your clients might consider post last week’s election?
The tax-exempt municipal market has faced some challenges this fall: Yields trended higher in early October as the market struggled to digest the largest new issuance period of the year, and the indigestion has only increased following last week’s U.S. election outcome.
Franklin Templeton Fixed Income Group® offers its perspective on the global markets. In this Issue: Uncertainty Ahead of Trump Administration but Fundamentals Remain Constructive; Divergence in Monetary Policies Between World’s Leading Central Banks Likely to Remain Intact; and Eurozone Bond Yields Rise but ECB Likely to Adjust Rather Than Signal End of Quantitative Easing
Donald Trump’s victory in the US presidential election means that markets have been caught off guard by unpredicted outcomes in two-way political races twice already this year. As we enter the final weeks of campaigning ahead of the Italian constitutional referendum, David Zahn, head of European fixed income, Franklin Templeton Fixed Income Group, explains that markets appear to be taking a more cautious approach to the next wave of potential political pitfalls, including next year’s general elections in Austria, the Netherlands, France and Germany.
Today’s income hungry world underscores the need to dig into free cash flow and payout ratios to avoid yield traps.
After years of deriding the airline industry, Warren Buffett confirmed this week that his holding company, Berkshire Hathaway, has invested nearly $1.3 billion in four big-name domestic carriers: American, Delta, United and Southwest.
The U.S. bond market has retreated since the election. Long-term yields have risen by almost 40 basis points. It appears that the 30-year-old bull market in bonds is really over.
Since the election, much of the financial commentary has centered on the stock market's surprising surge.
Fund managers' inflation expectations have jumped to the highest level in 12-1/2 years.
If the US Federal Reserve becomes too hawkish too soon, it will strengthen the US dollar, undermining Donald Trump’s stated goal of creating jobs and boosting incomes for his blue-collar base. Given his proposed fiscal expansion, Trump would be better off keeping Barack Obama's dovish appointees.
The election of Ronald Reagan in 1980 provides the best recent precedent for the unexpected triumph of Donald Trump...
