Brandes believes increased market volatility and valuation readjustments in the final quarter of 2018 mean a better outlook for a global value investing approach in 2019 and beyond.
The January Absolute Return Letter is always about the pitholes one could fall into in the year to come and, lo and behold, financial markets are behaving as if we have already fallen into one. December was a most difficult month, and January hasn't exactly started with all guns blazing either.
In September, this year looked like it was going to be one of the great years for the Ten Surprises. Oil was at $75 (West Texas Intermediate) and the S&P 500 was at 2,940. The Surprises had oil at $80 and the S&P at 3,000. The Ten Surprises are judged on whether they work out at some point during the year, not where they are at year-end.
The truth about water shortage isn't that we either have it or we don't. It's not an either/or proposition. In fact, it is much more complex than that. One of the greatest challenges the globe faces today is both the scarcity of and access to one of its most valuable commodities.
With only one trading day left in 2018, the price of gold has so far beaten the S&P 500 Index for the month of December, the fourth quarter and the year. What might surprise some readers is that it’s also outperformed the market for the century.
As global markets increasingly ponder how long US economic growth can continue, Franklin Equity Group’s Ed Lugo says he’s looking for potential investment opportunities outside the United States. He explains why he sees opportunities in Europe and Asia, despite concerns about Brexit negotiations and a slowing Chinese economy.
Investors’ obsession with the flattening U.S. Treasury yield curve dominated headlines for much of 2018. A flattening yield curve occurs when short-term rates are rising faster than long-term rates, which may eventually lead to an inverted yield curve, where short-term rates are higher than long-term rates. Historically, this has been a negative signal for the U.S. economy, often providing an early warning of an eventual recession, which is why the yield curve has been garnering so much attention recently.
Gold is back! So far this quarter, the yellow metal has crushed the market, returning around 6 percent versus negative 15 percent for the S&P 500 Index. Gold miners, though, have been the top performer, climbing a phenomenal 12.3 percent.
Continued US dollar strength has focused attention on weaker commodity prices and dented investor enthusiasm for emerging markets in recent months—stoking fears that the current climate could lead to a repeat of the 1997-1998 Asian Financial Crisis.
It may seem like a poor environment for EM stocks, but they outperformed in the recent volatility. Russ explains why.
The chief goal of society should be to maximize wealth, according to Tyler Cowen. Pursuing that goal has delivered everything from nutritious and abundant food, to air conditioning and smartphones in the developed world, and those benefits are spreading rapidly to the developing world. The challenge is how societies can embrace and implement that goal. If those challenges are overcome, the benefits to globally diversified equity investors will be substantial.
Josh Shores serves as a principal and director of Southeastern Asset Management, Inc. He is a manager of the Longleaf Partners International Fund (LLINX). In this interview, he discusses why the biggest, broadest and deepest opportunity set for investing is outside the U.S.
Wheaton Precious Metals announced that it reached a settlement with the Canadian Revenue Agency (CRA), the equivalent of the IRS. “We expect the stock to react positively to the news given the tax dispute was an overhang,” Credit Suisse analysts shared in a note to investors today.
In our 2019 Fixed Income Outlook, Matthews Asia's fixed income team discusses possible tailwinds for Asia bonds ahead.
Does ESG/SRI investing lead to higher, lower or about-the-same risk-adjusted returns? Abundant academic literature on the topic has emerged in the last eight years, but there’s still no consensus about whether responsible investing is a good bet for your clients.
Stocks plunged this week on concerns that trade negotiations between the U.S. and China are not running as smoothly as initially thought. Adding to the uncertainty was news of the arrest of Meng Wanzhou, CFO of Chinese tech giant Huawei, the world’s second-largest smartphone manufacturer.
Conventional wisdom is always right—until it isn't. The question is: When is it right to disagree? The investment herd is thinking: Trade wars, tight money, fractious politics and a falling stock market in the U.S. Banking systems in distress in Europe and the splitting of the EU.
Can markets grind higher in 2019 before the clock runs out on the current cycle? See what our strategists’ views are for the year ahead.
By the end of the summer I became convinced that the United States equity market was setting itself up for a powerful post mid-term election rally. The economic fundamentals were strong: unemployment was at a 40-year low and real growth was better than 3%; the Federal Reserve was raising rates...
Amid macro concerns including trade conflicts and fears of slowing growth, Chinese equities were highly volatile in 2018. The declines in equity prices seem to have been driven largely by sentiment. Two decades of investing in China has taught me to look past sentiment and take a closer look at what's happening on the ground.
Like cranberry growers, many bitcoin miners are choosing to limit supply as current prices are lower than operating costs. Bitcoin fell below $5,000 on Monday and was trading around $4,250 on Friday. The average of mining a single bitcoin, meanwhile, is estimated to be between $6,000 and $7,000, meaning miners are operating at a loss.
I spent last week in Asia—two days in Hong Kong, one day in Shanghai, and two days in Singapore—visiting our clients. It was a fascinating trip in some of my favorite cities in the world … well, in the case of Singapore, a city, island, and country all in one.
Volatility returned and pulled markets across the globe into the red. Slowing growth momentum outside the U.S. further weighed on sentiment. Political developments from Latin America to Europe were a source of both uncertainty and assurance for markets.
Natural gas storage in the lower 48 states was below the five-year average as of October 31, according to the EIA. This, combined with a stronger-than-expected start to winter, prompted traders to push prices to a four-year high of $4.84 per MBtu. Meanwhile, natural gas futures trading hit an all-time daily volume record of 1.2 million contracts.
Market Updates from across the region.
I have been waiting for the first signs of real panic in Asia's bear market. First, there was the question of why India had been so defensive, with its current account deficit, high structural inflation, strained banking system, difficult government finances and high valuations.
October brought a significant increase in market volatility and a broad equity sell-off to match the late-January through early-February move lower.
For investors focused on Sino-U.S. trade tensions, it may come as a surprise that China ran a current account deficit in the nine months of 2018, its first since 1993. The $12.8 billion deficit is only about 0.1% of GDP on an annualized basis.
Celebrated value investor Benjamin Graham, who mentored a young Warren Buffett, liked to say that the market is a voting machine in the short term, a weighing machine in the long term. This week the market voted to reward stocks in the aftermath of the midterm elections, which gave Democrats control of the House and left the Senate in the hands of Republicans. This all but guarantees that gridlock will be the status quo in Washington, at least for the next two years.
Changes result in a major shift in sector weights across indices globally.
A decade after the US Federal Reserve launched one of the boldest policy experiments in the modern history of central banking, economists and policymakers are still debating its implications. To prepare for future crises, five key lessons should be kept in mind.
Electrification of all transportation and heating is already a trend in motion, and it is going to change everything. The arrival of fusion energy will only make those changes even more dramatic. Commercial banks may cease to exist, fossil fuel prices will fall dramatically - some may even go to zero - and OPEC may be replaced by OLEC - the Organisation of Lithium Exporting Countries.
Speaking with Bloomberg’s Erik Schatzker this week, Taleb said the reason why he has reservations about today’s economy is that it suffers from the “same disease” as before. The meltdown in 2007 was a “crisis of debt,” and if anything, the problem has only worsened.
Artificial intelligence (AI) and automation present enormous investment opportunities, some in ways we don’t even know yet. As the world adapts to technological advances, Franklin Templeton Emerging Markets Equity’s Sukumar Rajah and Eric Mok think some promising developments in Asia could dictate the pace of change in the burgeoning AI market.
Harold Evensky's latest newsletter.
Energy is the best performing sector in four of six market-regions. (From two market groups, Developed and Emerging, and three regions, Americas, EMEA, Asia, we get six market-regions.) Among Developed Market sectors, energy is 5th YTD, down about 5% less than the MSCI All Country World Index.
Is the International Monetary Fund a useful tool in preventing economic dysfunction? Or, as the nationalists claim, are there more appropriate uses of capital?
Gold performed precisely as we would expect it to. The price of the yellow metal jumped above its 100-day moving average, a bullish sign that could mean further moves to the upside if market volatility persists. Today gold was trading at a three-month high of $1,246 an ounce.
I had some Chinese last night and my local takeaway hero gave us some fortune cookies to go with it. My wisdom-in-a-biscuit read “The Chinese use two brush strokes to write the word ‘crisis.’ One brush stroke stands for danger; the other for opportunity.”
Templeton Global Macro Chief Investment Officer Dr. Michael Hasenstab and Vice President and Deputy Director of Research, Dr. Calvin Ho, discuss emerging-market turbulence, the persistent concerns around trade policy and divergent growth trends in the developed world.
Our October Sinology explores the disconnect between weak market performance in China, and strong macro conditions and corporate earnings. How likely is this to narrow?
Whether or not one believes in the “October Effect,” investors can’t be blamed for giving it credence this year. Worries about trade, the Federal Reserve and global growth roiled the markets as the fourth quarter began. Even U.S. equities—which had roared through the third quarter as investors focused on positive economic data—succumbed to the selloff that gripped risk assets.
Di Zhou and Jim Gassman are co-managers of the Thornburg Better World International Fund (TBWIX), a global ESG fund. Since its inception on 9/30/15, through 9/30/18, the fund has earned an annualized rate of return of 10.96%, outperforming its benchmark, the MSCI ACWI Ex-US USD index, by 117 basis points. As of 9/30/18, the fund has been rated five stars by Morningstar. Stop by to see us at booth #388 (near the Bear & Bull Pub) in the exhibit hall, where you’ll have a chance to talk with our product representatives and pick up our latest features in the Wall Street Transcript and Value Investor Insight.
Market updates from across the region.
Investors who view market opportunities exclusively through the lens of recent strong economic performance risk misreading a pivotal event. The tide of liquidity is turning and will bring asset prices down with it.
To refresh, the new playbook refers to strategies that we believe can prosper in the environment we expect of higher inflation and interest rates, dollar weakness and increased volatility.
In this article we put our optimization machine framework to the test. Specifically, we make predictions about which portfolio methods are theoretically optimal based on what we’ve learned about observed historical relationships between risk and return. Then we test these predictions by running simulations on several datasets.
Asset price inflation (check). Financed by debt growth (check). We’ve spent the last three weeks reviewing Ray Dalio’s A Template for Understanding Big Debt Crises. I hope you found the insights as helpful as I did.
What do a Nobel Prize, oil prices and employee compensation have in common? Change. The Nobel committee tipped its hat to the importance of recognizing climate change with its prize for Economic Sciences. But changes in oil’s global role and compensation vs. wages are also on our minds
India's growth rate accelerated to 8.2% in the second quarter of 2018 as the shocks from demonetization and the imposition of the Goods and Services Tax (GST) wore off, supported by inventory restocking and a low base of comparison. The principal drivers of growth were government and private spending.
