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Results 9,701–9,750
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Despite Hitting an Oil Slick, Evidence Underpins a Positive Outlook on MLPs
The fall in energy prices has raised concerns that the dramatic hydrocarbon volume growth we have seen from the new shale plays in the U.S. in the past few years is over or might even reverse. We believe these concerns are overblown. We think the current dislocation in the commodity markets is a case of supply temporarily getting ahead of demand.
ECB Review: Blowing on the Embers of a Reflationary Fire
by Andrew Bosomworth of PIMCO,
?Not to pursue our mandate would be illegal? is how Mario Draghi ended his last press conference of 2014. Mr. Draghi?s first press conference of 2015 began with the announcement of a quantitative easing (QE) programme that pursues the European Central Bank?s (ECB) inflation mandate with a vengeance. And rightly so, for the disinflationary trends in the eurozone had become all the more precarious as economic output and the price of oil continued to fall.
U.S. Lodging: The Recovery Checks In for an Extended Stay
by Ray Huang, Amit Arora of PIMCO,
Relatively high occupancy levels should drive room rate growth in the hotel sector over the next several years, despite some supply entering the market. We see opportunities in certain segments, such as premium hotels and C-corporations, due to high barriers to entry and pricing power.
Fixed Income in 2015: Lower for Longer?
2014 surprised many bond investors as interest rates fell dramatically on the longer end while they rose as expected on the short end. The result was another solid year of returns for investors that remained in longer-duration bonds, and was adequate for most investors that shortened their duration.
Wait and See at the Bank of England
UK growth looks to be sustainable, with encouraging domestic demand, though we need to see business investment continue to pick up. Although inflation hovering below the 1% lower tolerance band of the Bank of England (BOE) remains a concern, we think it actually gives the central bank welcome breathing room during a period of uncertainty for the global economy. Looking ahead, we see compelling investment value in the intermediate part of the UK yield curve, namely five- to 10-year bonds, as the BOE plays the waiting game.
Deflation Is A Problem For The Fed
by Lance Roberts of Streettalk Live,
The biggest worry of the Federal Reserve, and frankly every Central Banker on the planet, is deflation. The reason is that deflation, as an economic pressure, is dangerous and once entrenched becomes difficult to break. For the Fed, the fear of inflation is far less worrisome.
Rocky Horror Picture Show
by Jeffrey Saut of Raymond James,
?Rocky Horror Picture Show? was a satirical film production done as a tribute to the science and horror ?B? movies of the late 1930s through the 1970s. I was reminded of the flick last week when one portfolio manager I saw in Fort Lauderdale said to me, ?The first few weeks of the New Year have been an absolute horror show!?
Investor implications of QE by the ECB
by Axel Merk of Merk Investments,
Is European Central Bank (ECB) head Draghi?s determination to purchase government bonds turning Europe into a banana republic? What are the implications not only for the euro and U.S. dollar, but gold, stocks and bonds? Our analysis shows that conventional wisdom may be proven wrong in more than one way.
Seeking Strong Int'l Growth Stocks Amid Mixed Macro Signals
Previously stretched valuations have become reasonably constructive in Europe's stalled economy. China's structural reforms and corruption crackdown could be positive in the long term. The commodity cycle downturn hurts resource-dependent emerging markets but benefits net commodity importers.
Albert Edwards - "Markets to Riot"
by Robert Huebscher,
Albert Edwards admits that his "bear" reputation is well deserved, at least with respect to equities, an asset class he has dismissed for the last 10 years. His bearishness has not abated, and for the coming year, he fears that "deflation will overwhelm the west." Markets, he said, will riot.
Swiss Surprise: National Bank Ends Currency Cap
On Jan. 15, the Swiss National Bank (SNB) unexpectedly abandoned its policy to cap the value of the franc at 1.2 euros.1 Over the past few years, the SNB has had to sell billions of francs to buy euros to prevent an excessive appreciation of the domestic currency - a too-strong currency could dent the country?s export business.
Navigating the Oil Slick
by Team of Calamos Investments,
GDP growth for 2015 is likely to be 2.0%-2.5% globally and 2.5%-3.0% in the U.S. Oil prices may fall further but are likely to stabilize over the next several months. The ECB is likely to ramp up QE in the first quarter. These next months are likely to be volatile, but equities have more room to run. Low corporate borrowing costs and high dividend yields should encourage continued M&A and buyback activity, providing support to equity valuations. With the U.S. in the middle innings of the recovery, the case for secular and cyclical growth companies remains strong.
Retiring in a Low-Return Environment
Low bond yields and high equity valuations suggest lower spending for retirees. Prior research forecasted the impact on safe-withdrawal rates
(SWRs), but a more sophisticated model can improve the accuracy of those predictions. We show just how low the SWRs should be for today's retirees.
Despite Escalating Volatility, U.S. Fundamentals Remain Sound
U.S. equities declined for a third straight week, with the S&P 500 Index dropping 1.2%. Defensive areas such as utilities and telecommunications were the best-performing sectors, while the financial sector was hit the hardest. Notwithstanding last week?s decision by the Swiss National Bank to remove its currency peg, the fundamental backdrop has not changed much in recent weeks. We attribute the fall in equity prices to ongoing worries about the collapse in oil prices and the ripple effect on the global financial system.
Weighing the Week Ahead: The Message from Fourth Quarter Earnings
I do not know how earnings season will play out this week. My list of things to watch is good, but the market seems to be demanding a parlay of positive indications: Beating the whisper number for earnings; Beating the revenue expectations; Business growth ?organic, not from mergers or purchases; Solid ?quality of earnings? with no gimmicks or accounting moves; A credible, positive outlook.
QE and the ECB: "Authorize" is a Slippery Word
by John Hussman of Hussman Funds,
The ECB will authorize a large QE program this week, but my impression is that the details will leave the ECB itself responsible for executing only a fraction of the announced program, with the remaining majority of the program (perhaps 60-75%) being nothing more than the option for each national central bank to purchase its own country?s government bonds, at its own discretion, and its own risk. Moreover, that option is likely to be limited to something on the order of 25% of the outstanding government debt of each respective country.
Weekly Economic Commentary
by Carl Tannenbaum of Northern Trust,
?Francogeddon? ? ?tsunami? ? ?carnage? ? The hyperbole after the Swiss National Bank (SNB) unexpectedly ended its three-year currency ceiling peg to the euro yesterday was not misplaced. The immediate impact has been profound across a range of markets. The longer-time ripples are only beginning to become apparent. This is what we?ve gleaned so far:
Palladium Was the Winner in 2014
Palladium, 2014?s top commodity, performed relatively according to script. For the year it was up 11.35 percent, compared to its 10-year annualized returns of 14 percent. Much like nickel, palladium was spurred by extenuating circumstances. Between January and June, a labor strike in South Africa, the world?s second-largest producer of the metal following Russia, halted production, which depleted reserves and sent palladium to a three-year high of $850 an ounce.
QQE2: Japan?s Monetary Banzai Charge
by Chris Richey of Neosho Capital,
In this Age of Monetary Policy, it is impossible to ignore the macro. As much as we would like to focus only on individual enterprises, the mind-boggling scale of $5 trillion of monetary intervention in the U.S., Japan, and Europe renders such cloistered thinking imprudent. Not only must Benjamin Graham?s enterprising investor understand individual stocks, but they must also be keenly cognizant of the role the world?s largest central banks actively play in the value of currencies, bonds, stocks, ETFs, mutual funds, and derivatives of all kinds.
3 Things - Employment, Interest Rates & Retail Sales
by Lance Roberts of Streettalk Live,
There has been much discussion as of late about the "longest string of employment gains since the 90's." There is certainly no argument that employment has improved since the financial crisis, however, with the economy six years into a recovery we should certainly expect as much.
Yesterday?s Gone: Year-End Capital Markets Commentary and Expectations
With updated return expectations, we estimate that the performance of U.S. stocks and bonds over the next 10 years will be significantly lower than long-term historical averages. Other asset classes may produce moderately better returns.
The Swiss National Bank?s Unpleasant Experience of Sleeping Next to an Elephant
On 15 January 2015, the Governing Board of the Swiss National Bank (SNB) unexpectedly exited its minimum exchange rate regime, which it had adopted back in September 2011 when it was fighting sharp appreciation of the Swiss franc in the midst of the eurozone sovereign debt crisis.
5 Charts For Fully Invested Bears
by Lance Roberts of Streettalk Live,
While the mainstream media continues to misalign individuals expectations by chastising them for "not beating the market," which is actually impossible to do, the job of a portfolio manager is to participate in the markets with a predilection toward capital preservation. It is the destruction of capital during market declines that have the greatest impact on long-term portfolio performance.
2015 - Fasten Your Seat Belts, This Could Be a Bumpy Ride
by Chris Puplava of PFS Group,
While higher stock prices are often cited as the biggest beneficiary of the Fed?s several rounds of quantitative easing (QE), a lesser cited beneficiary has been overall market volatility and the credit markets. With each round of QE and/or ?Operation Twist? we?ve seen measures of financial stress in the credit markets contract.
Market Outlook 2015: Double Digit Gain...Thank You, May I Have Another?
The U.S. stock market finds itself in rare territory as we enter 2015. For only the sixth time in the past 150 years, the U.S. stock market has registered a double-digit gain for three consecutive calendar years from 2012 to 2014. We will try to answer the question: ?Can the U.S. stock market post a fourth year of double-digit gains??
European Populism
In our 2015 Geopolitical Outlook, one of the risks we discussed was the rise of populism. In this week?s report, we will focus on European populism. The recent attack on the employees of Charlie Hebdo in France makes this a timely topic. In this report, we will define populism, examine why populism has developed in the West, note the particular characteristics of European populism and identify the effects it could have on general geopolitics in the future. As always, we will conclude with potential market ramifications.
What Does the Oil Turmoil Mean for the Energy Sector in the Long Term
by Tripp Zimmerman of WisdomTree, Inc.,
One of the largest investment stories for the second half of 2014 was the precipitous decline of oil prices and its impact on the energy sector. As a result of the sharp price declines, the dividend yields on various energy stocks have increased.
Markets May Be Choppy, but Equities Should Advance in 2015
The year started off with equity markets experiencing volatile trading. Stock prices dropped sharply in the first few trading days before recovering, while oil prices plummeted and bond yields fell. Last week, U.S. equities lost ground and the S&P 500 Index declined 0.6%.
A Better Lesson than "This Time is Different"
by John Hussman of Hussman Funds,
The near-term outcome of speculative, overvalued markets is conditional on investor preferences toward risk-seeking or risk-aversion, and those preferences can be largely inferred from observable market internals and credit spreads. The difference between an overvalued market that becomes more overvalued, and an overvalued market that crashes, has little to do with the level of valuation and everything to do with investor risk preferences. Yet long-term investment outcomes remain chiefly defined by those valuations.
Recovery Gaining Momentum?
U.S. growth will remain robust over the cyclical horizon due to increasing consumption driven by the narrowing unemployment gap and increase in disposable incomes. The Canadian recovery should continue, though divergent forces ? including the U.S. recovery and oil price declines ? could have significant implications for the economy. Growth will be muted across Latin America, with some economies benefitting from U.S. growth, and others dragged down by the slowdown in the eurozone and China.
The Hidden Perils of Low Interest Rates
by John Browne of Euro Pacific Capital,
Late last year, with the U.S. economy experiencing falling unemployment and seemingly low inflation, observers were extremely confident that the Federal Reserve would move judiciously in 2015 to restore 'normal' interest rates sooner rather than later. However, in light of the recent fall in both stocks and oil, that conviction has softened considerably.
A Devoted Contrarian Needs Patience
In his latest piece, Francois Sicart, Founder and Chairman of Tocqueville Asset Management, argues that despite their clear value, "fundamental analysis and contrarian thinking are not very precise investment-timing tools." He explores the dangers of both acting too son and acting too late even when an anticipated substantive investing scenario comes into being.
Will Active Stock Picking Be More Relevant in 2015?
by Charlie Dreifus of The Royce Funds,
While active managers continued to struggle in 2014, we remain confident in our approach, which emphasizes discipline, patience, and absolute results. Portfolio Manager and Principal Charlie Dreifus discusses the performance of his small-cap portfolio, what sectors and industries he found most interesting at the end of 2014, conditions in place that may lead to a more robust M&A market in 2015, the state of the U.S. economy, and why he believes the value of active stock picking will increase in importance.
Results 9,701–9,750
of 11,878 found.
