Stock indexes have been able to move higher as the balancing act between economic growth and investor concerns continues—but how long will it last?
This week I have something special for you: an update of “The Distribution of Pain,” one of 2017’s most popular letters. I say “popular” just in terms of feedback and reprint requests. It was thought-provoking but also sobering. I started with the original version, re-edited to clarify a few points, and added some new comments. It is still a timely, important topic.
Last month in Venezuela’s capital city of Caracas, a cup of coffee would have set you back 2 million bolivars. That’s up from only 2,300 bolivars 12 months ago, meaning the price of a cup of joe has jumped nearly 87,000 percent, according to Bloomberg’s Café Con Leche Index. And you thought Starbucks was expensive.
Matthews Asia CIO Robert Horrocks says markets may have overreacted in Asia to news of a trade war and tighter money.
Rieder and Brownback argue that as we depart the era of QE, where rising tides lifted all boats, the income component of total return becomes ever more vital to investor prospects.
Infrastructure is not a glamorous topic — it isn’t satirized on late-night TV, nor is it trending on social media. But the need for increased infrastructure investment is real across the globe. Given expected demographic trends, disruption by new technology and insufficient spending in the past, we at Invesco Real Estate believe infrastructure-related companies could be poised for decades of growth.
Fears of an imminent U.S. recession are premature; tax policy and a more business-friendly regulatory environment provide long-term catalysts for the economy. Although conditions outside the U.S. are less encouraging, positive global growth should continue, albeit with growing divergence among countries.
We calculate statistics for all developed and emerging equity markets around the world. For our mid/large cap indexes, we take the top 85% of all stocks in a given region or country and convert all prices into US Dollars.
There are a number of changes taking place in the investment environment and they are likely to have an influence on the returns on financial assets for some time to come. When the world’s leading economy, with more than a fifth of global GDP, does not participate in major alliances dealing with matters of security and the environment, this has longer-term investment implications.
Matthews Asia CIO Robert Horrocks says valuations are nowhere near as stretched in Asia as they are in the U.S.
As our analysts and researchers travel the world surveying businesses, they hear a lot about disruption—the ability of new often-technology-backed companies to disrupt the status quo.
In a sharp departure from this time last year, the global economy is now being buffeted by growing concerns over US President Donald Trump's trade war, fragile emerging markets, a slowdown in Europe, and other risks. It is safe to say that the period of low volatility and synchronized global growth is behind us.
Chinese equities have been soft and President Trump is threatening a trade war, but earnings and margins remain firm and China is still the world’s best consumer story.
During the second half of the year, convertibles should benefit in advancing but volatile equity markets. Convertibles have outperformed bonds during rising rate environments. Thanks to their equity characteristics, convertible securities have performed well versus bonds during periods of rising interest rates—including this most recent period.
The potential escalation of tariffs combined with rising rates present a formidable risk for advisors and their investors in the second half of 2018. Avoid betting for or against a trade deal and build in risk managed strategies that position your investors for either outcome.
U.S. tariffs and trade tensions have dominated headlines over the past few months. With certain tariffs aimed squarely at China, Beijing quickly responded with tariffs of its own on U.S. goods in early July. What do the tariffs mean for investors in Chinese and other Asian technology and consumer credits?
This week I had the privilege of meeting a young tech superstar in Palo Alto, California—Gabe Leydon, cofounder and now-former CEO of mobile game producer MZ. Previously known as Machine Zone, the Sunnyvale-based company is responsible for developing some of the highest-grossing mobile games of all time, including Game of War: Fire Age and Mobile Strike, both of which profited from high-dollar marketing campaigns worthy of some Hollywood films. You might have seen Game of War’s Super Bowl commercial featuring swimsuit model Kate Upton, or Mobile Strike’s, starring Arnold Schwarzenegger.
Investor sentiment on emerging markets has swung negative in recent weeks on concerns over tariffs, trade, global growth and a resurgent U.S. dollar. However, we believe the long-term case for emerging markets (EM) in bond portfolios is still strong -- especially if you know where to look.
With trade war rhetoric growing hotter, Presidents Trump and Xi still have time to head to the negotiating table.
The days are long and people’s thoughts naturally move to the mountains, lakes, and beaches. But these coming summer days may not be so “dog-like” as we normally anticipate.
Stop buying Iranian oil or face the music. That’s the message the U.S. government shared with the world this week, giving importers until November 4 to cut their consumption of Iran’s crude to zero—or expect sanctions. The threat comes a month after President Donald Trump withdrew the U.S. from the Obama-era nuclear deal.
Not too long ago, investors, consultants, and advisors in the asset management field struggled with the role of Multi-Asset Class (MAC) strategies. They were perceived as misfits, given their cross-asset mandate and their dynamic nature. Today, however, they are utilized and embraced in all sorts of different settings.
Do increasing political risks pose to a threat to global economic growth? See what our strategists’ views are for the third quarter of 2018 and beyond.
U.S.-China trade concerns have been weighing on investors. Matthews Asia examines the strength of China's underlying fundamentals, the rate of its middle class expansion and domestic consumption.
2017 was a great year for the economy and financial markets, and we started 2018 with high hopes for even faster growth and continued market gains. But between the stock market pullback early in the year; the slowdown in economic growth; and the rising political risks in Asia, with North Korea, and in Europe, with Britain and Italy, expectations softened. Perhaps 2017 was the end of the cycle after all.
Danton G. Goei joined Davis Advisors in 1998. He is a portfolio manager for the Davis Large Cap, Global, and International Portfolios and a member of the research team for other portfolios. In this interview, he discusses those funds and why Davis maintains a “wall of mistakes” that immortalizes its investment blunders.
Forecasting currency performance is like predicting the outcome of a horse race. Currencies move up the field and then fall back depending on their respective country conditions. And once in a great while, a very strong contender dominates the field – much like the winner of the Triple Crown.
China is in focus this week as the economics team considers the country’s trade practices and defaults in its bond market.
On Wall Street, it's best not to think too hard or to look too closely into the mouths of gift horses. Since making predictions based on actual economic understanding is rare, analysts typically look to provide explanations after the fact. Within the financial services industry, currency traders are perhaps the greatest practitioners of this craft. While they often get the fundamentals completely wrong, it never seems to stop them from offering bizarre theories to explain currency movements.
We’re a little more than a week into the 2018 FIFA World Cup, and so far Russia has surprised experts and fans alike. Expectations were low at best. Because of recent setbacks, including a disastrous performance at the 2016 UEFA European Championship and injuries sustained by key players, the federation ranked a dismal 66th place among Fédération Internationale de Football Association teams—its lowest position ever. The only reason it didn’t have to qualify to compete was because Russia is the host nation. (This is the first time in its 88-year history, by the way, that the World Cup has been held in Eastern Europe.)
This business expansion has gone on for nine years and most investors think we have to be near the end. In baseball parlance you hear talk that we are in the seventh or eighth inning; nobody seems to believe we are in the second or third. Jamie Dimon of J.P. Morgan has said at a conference we’re in the sixth, which got a lot of attention.
Matthews Asia CIO Robert Horrocks says worries about U.S. monetary policy are not without cause.
Energy equities have underperformed the S&P 500 materially over the last five years. While spot oil prices have risen significantly over the last twelve months, longer dated oil prices have not, and energy equities have remained under pressure.
Small caps have materially outperformed large caps in 2018, with the S&P SmallCap 600 Index outpacing the S&P 500 Index 7.80% to 2.58% between Dec. 29, 2017, and May 25, 2018. Below, I highlight the drivers of small-cap returns this year, and why I believe the trend could continue.
PIMCO’s Global Advisory Board discusses the outlook for major economies and geopolitical developments.
Matthews Asia Portfolio Manager Michael Oh says South Korea’s economy may benefit from closer ties to North Korea, but costs and risks remain.
The financial industry can measure up by conveying capital to improve the future of humankind; in short, by creating value.
The team illustrates the economic background behind the Korean summit meeting and profiles corporate debt.
If you live in Texas and have any extra gold bars, coins and/or jewelry lying around that need safekeeping, you’re in luck. The Texas Bullion Depository, the first of its kind in the U.S., officially opened to the public in Austin this week, putting a cap on three years of planning and construction. The private firm managing the facility, Lone Star Tangible Assets, calls it the “world’s most advanced depository.”
Despite long-running international concerns about China’s property “bubble,” the market has proven quite resilient. The Chinese government has instituted various austerity measures to cool the market, but buoyant demand for property has helped avoid any serious downturn.
Market updates from across the region.
Economists who assure us that advanced-economy debt is completely “safe” sound eerily like those who touted the “Great Moderation” – the supposedly permanent reduction in cyclical volatility – a generation ago. In many cases, they are the same people.
Kudzu invaded the South, obliterating the healthy and attractive vegetation carefully planted by homeowners. Variable annuity owners are likewise being strangled by excessive fees.
Prices will rise—for producers and consumers alike—which is good for gold but a headwind for continued economic growth.
For income investors, rising interest rates have created both a challenging market environment and a better outlook for yield.
This shouldn’t surprise anyone, but public trust in the federal government is eroding. Sixty years ago, 75 percent of Americans expressed faith in the government to do the right thing “most of the time” or “just about always.” Seventy-five percent! You can’t get 75 percent of people to agree on anything now, as the recent “Laurel or Yanny” video proved.
Earlier this year when President Trump began beating the drums loudly, causing fear of a trade war (and assuring us that such a conflict could be easily won), I cautioned that he had no idea the trouble he was courting . Based on his spectacular misunderstanding of the power dynamic built in to international trade, he was also in danger of bringing a knife to a gunfight.
Public debt may be growing at the expense of private debt, the Chinese bond market is opening up, and important dates for tariffs are fast approaching.
Matthews Asia CIO Robert Horrocks says Asia’s political and economic environment looks strong for the region’s long-term growth prospects.
