Search Results
Results 3,151–3,200
of 3,702 found.
Market Update
With the Ukrainian situation very much in focus, Treasury rates moved mostly lower last week. The yield curve exhibited a flattening bias, as longer dated maturities registered the biggest declines. For the week, 10 year treasury yields closed at 2.65%, a drop of eight basis points from the prior week, while two year yields were unchanged at 0.32%. As Gross Domestic Product (GDP) was revised lower to 2.5% from 3.2%, we also learned last week that the economy expanded at a slower pace in the fourth quarter of 2013 than previously estimated, giving the expansion less momentum heading into 2014.
Turmoil in Venezuela
Venezuelan President Hugo Chavez died about a year ago. In the year since his passing, elections were held and Chavez's handpicked successor, Nicolas Maduro, won in what turned out to be an unexpectedly tight race. Since the elections, the Venezuelan economy and society have struggled. In this report, we will examine the underlying structure of Venezuela's political system and the divisions that exist. We will compare and contrast how Chavez was able to manage these divisions and how Maduro is struggling to replicate his success. As always, we will conclude with potential market ramifications.
Black Swans and Endogenous Uncertainty
John is in Florida and feeling a bit under the weather, so this week were bringing back one of his most popular letters, from December 2007. In the letter he discusses the work of Professor Graciela Chichilnisky of Columbia University, one of whose key insights is that the greater the number of connections within an economic network, the more the system is at risk. Given the current macroeconomic environment, it is important to remind ourselves of how complacent we were back in 2007 and how it all fell apart so quickly, just as John outlined in this rather prescient piece.
Bounce Back
US stocks have bounced and the markets still attractive and in the midst of a secular bull market. But there are likely to be bumps along the way; notably given that this is a midterm election year; which are known for first-half pullbacks. A diversified portfolio is important and both European and Chinese stocks appear to have upside, while Japan continues to frustrate with a two-steps forward, two-steps back sort of approach. And a final reminder not to replace fixed income assets with equities in search of higher income without recognizing the risk profile of a portfolio has changed.
A CAPE Crusader
by James Montier of GMO,
In a new white paper today, James Montier of GMO's asset allocation team reviews a range of valuation measures to assess current U.S. equity market valuations. He concludes: "We continue to believe that the weight of valuation evidence suggests the S&P 500 is significantly overvalued at its current levels."
Market Perspective
It cost $0.32 to mail a letter, unemployment was 4.9%, O.J. Simpson was found liable in a civil suit, Hong Kong was returned to Chinese rule, Timothy McVeigh was sentenced to Death, Green Bay defeated the Patriots in the Super Bowl, Titanic came crashing into movie theatres, and Dolly, the first genetically engineered lamb was unveiled to the public; the year was 1997.
EM and the Fragile Five: Separating the Wheat from the Chaff
The shift in capital flows triggered by former Fed Chairman Ben Bernanke?s tapering remarks in May 2013 set off a cascade of market events that continues to this day. His comments also birthed a cottage industry of emerging market doomsayers, who now predict regularly: 1) the end of growth in emerging markets (EM), given that it was, in their view, all a mirage fueled by carry and leverage; and 2) a wave of defaults of the kind last seen in the 1990s that threaten to bring down not only emerging but developed markets as well.
How to Profit from the Yellen Fed
by Axel Merk of Merk Investments,
Janet Yellen might have the most powerful job in the world, as the Federal Reserve (Fed) she now chairs controls what may be the world?s most powerful printing press. We take a closer look at what her reign might mean for investors? portfolios.
Flirting With Deflation
by Andrew Bosomworth of PIMCO,
Over the medium term, we see downside risks to both growth and inflation in the eurozone, unlike the ECB?s more balanced view. However, even if eurozone inflation sinks close to 1% in 2014?2015, as PIMCO forecasts, this in itself probably would not be low enough for the ECB to consider further easing. A lack of further policy action may undermine the ECB?s credibility to anchor longer-term inflation more closely to 2%.
The Worst Ten-Letter Word
by John Mauldin of Mauldin Economics,
A new word is achieving ubiquity. The word has always been with us and at times has been a beacon to attract the friends of liberty and opportunity. But now I?m afraid it is beginning to be used as a justification for social and economic policies that will limit the expansion of both liberty and opportunity. The word? Inequality.
Equity Markets: How Much Energy Does the Bull Have Left?
by Kurt Feuerman of AllianceBernstein,
After another big year for stocks in 2013, many investors are questioning how much longer the bull market can run before it collapses from exhaustion. This doubt has intensified with the early 2014 selloff. However, based on what we see, its not time to worry about the markets stamina yet.
CAPE Crusaders: The Shiller-Siegel Shootout at the Q Group Corral
Jeremy Siegel and Robert Shiller are close friends, but they have starkly divergent positions on how the CAPE ratio should be calculated and what that means for equity valuations. This article reports on their differing views and draws some conclusions about the market’s prospects.
Puerto Rico's Double-Downgrade
On February 4, Standard & Poors lowered its long-term credit rating on the Commonwealth of Puerto Ricos (PR) general obligation (GO) debt making it the first rating agency to downgrade the Commonwealth to below investment-grade levels. Just three days later, Moodys cut its GO rating by two notches to Ba2; ratings that are capped by or linked to the Commonwealths GO rating were also downgraded two notches, with the exception of the Puerto Rico Aqueduct and Sewer Authority (PRASA) Revenue Bonds.
Weather Related?
The recent slowdown in economic data appears to be largely weather related and we believe decent growth will reassert itself. Stocks have bounced after a weak start to the year, but the threat of a further pullback remains, although our longer-term optimism has not been dented. Likewise, we believe Europe offers some attractive investment opportunities but were in a wait-and-see mode with Japan. Finally, we dont see EM turmoil becoming overly contagious, but we are watching that situation closely.
ECRI Recession Watch: Weekly Update
The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.2, unchanged from last week. The WLI annualized growth indicator (WLIg) at one decimal place slipped to 3.3 from last weeks 4.2. Last weekend, ECRI posted a new publicly available commentary on the companys website: Failure to Launch. The brief text concludes with this remark: It is now quite clear that the economy is decelerating, not accelerating, with growth in ECRIs Weekly Coincident Index ... falling rapidly.
Equity Markets: How Much Energy Does the Bull Have Left?
by Kurt Feuerman of AllianceBernstein,
After another big year for stocks in 2013, many investors are questioning how much longer the bull market can run before it collapses from exhaustion. This doubt has intensified with the early 2014 selloff. However, based on what we see, its not time to worry about the markets stamina yet.
Was the labor report positive, or negative, anyone?
Stocks were modestly positive last week following three straight weeks of negative performance. Markets crawled back following an ugly Monday in which the S&P 500 suffered its worst loss in more than seven months. For the week, the S&P rose 0.9% while the Dow Jones Industrial Average added 0.7%.
Grey Owl Capital?s Third Quarter Letter
2013 was a banner year for the US stock market. Despite equities? meager fourteen-year record of accomplishment, investors, broadly speaking, are limited to short-term memory. Last year?s performance was enough to generate significant enthusiasm for stocks. We continue to believe, the current environment warrants a more balanced approach.
Emerging Europe: Regional Economic Review - 4Q 2013
by Team of Thomas White International,
The club of emerging European economies expanded, as Morgan Stanley Capital International (MSCI) moved Greece from developed to the status of an emerging economy. The majority of the countries covered in this review, including the new entrant, had something to look up to in the New Year.
2013 Year-End Investment Commentary
by Team of Litman Gregory,
We find ourselves with a more sanguine big-picture view, at least over the nearer term, than we have had in some time. U.S. and global economic fundamentals gradually improved over the past year across a number of dimensions, and seem poised for continued improvement or at least stability in 2014. However, as we look ahead, the longer-term risks related to excessive global debt, subpar growth, and unprecedented government policy that we have worried about since the aftermath of the 2008 financial crisis still remain largely unresolved.
Year-End Odds and Ends
by Jeremy Grantham of GMO,
In a new quarterly letter to GMOs institutional clients, chief investment strategist Jeremy Grantham offers "Year-End Odds and Ends": Fossil Fuels: Is Tesla a Tease or a Triumph?, Fracking and Yet More Technical Stuff on Fracking, Update on Metals, Fertilizers, and Food, Problems in Forecasting Short-term Prices for Resources, Another Look at U.S. GDP Growth, Investment Lessons Learned: Mistakes Made Over 47 Years
James Montier - What Worries Me Right Now
by Robert Huebscher,
GMO’s investment strategist James Montier discusses why corporate profits will revert to the mean, what investors should know about the controversy over CAPE valuations, and the one issue that is the "preeminent occupation" of his mind right now.
Thrift, Thrift, Burning Bright
Does the title sound familiar? Think feral instead of frugal, and William Blakes "Tyger, Tyger, burning bright" may start to flicker between the synapses of memory and an English lit class you once soldiered through. But even if you havent read "The Tyger", its theme is aptly captured in the opening line and its image of a big flaming kitty cat. Essentially, Blake saw reality in duality: To appreciate the ferocious feline in all its glory is to come face to face with the same force that created "The Lamb", another entry in the poets Songs of Innocence and of Experience.
The New Watchword-Deflation?
Equity markets have been shaky to start the year but we dont believe its time to abandon ship. The fundamentals in the United States continue to look appealing and the recent pullback has helped to correct some sentiment and valuation concerns. We are watching the fight against deflation carefully in Europe and Japan, and believe both countries may need to do more via monetary policy stimulus. Meanwhile, some emerging economies are dealing with inflation, but we dont believe the recent problems will morph into a widespread crisis at this point.
ECRI Recession Watch: Weekly Update
The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 133.8, unchanged at one decimal place from last weeks downward revision from 133.9. The WLI annualized growth indicator (WLIg) at one decimal place rose to 4.3, up from last weeks 4.2.
ProVise Bullets
This month, we sing happy birthday to Apple. It was 30 years ago that Apple introduced its first Mac computer. What was novel then is commonplace today and far less clunky. For those old enough to remember what that boxy looking thing was like, its hard to believe how far weve come. Carl Icahn bought another $500 million more shares of Apple stock, bringing his total investment to $3.6 billion. As an activist shareholder he is trying to force Apple to buy up to $500 million in a stock buyback program.
Quarterly Review and Outlook - Fourth Quarter 2013
In The Theory of Interest, Irving Fisher, who Nobel Laureate Milton Friedman called Americas greatest economist, created the Fisher equation, which states the nominal bond yield is equal to the real yield plus expected inflation. It serves as the pillar of macroeconomics and as the foundational relationship of the bond market. It has been reconfirmed many times by scholarly examination and by the sheer force of historical experience. Examining periods of both low and high inflation offers insight into how each variable in the Fisher equation affects the outcome.
Do China Insider Transactions Lie?
In our business, we like to say that insider transactions never lie. For this reason, one of our eight criteria for selecting common stocks is strong insider ownership, preferably with recent purchases. Additionally, as contrarians, we want to make our original purchases in a business at a time when most investors are scared to buy for one reason or another. When we see officers, directors and substantial existing shareholders of a business buying at prices which are temporarily depressed, we raise our confidence in the long-term future of a business.
Rummaging for Yield - The Case of the Insurance Investor
by Eugene Dimitriou of PIMCO,
Since the height of the global financial crisis in 2008, insurance companies have faced three key challenges: First, insurance companies urgently needed to address new critical risk management issues as banking sector and peripheral sovereign credit risks significantly increased in Europe. Second, the prospects of longer-term low yields forced insurers to identify alternative sources of meaningful yield. And third, insurance companies needed to prepare for pan-European insurance regulation Solvency II.
Why the Recent Lift in Junior Miners Will Likely Continue
Junior venture companies in Canada are finally seeing a significant lift. In early January, the S&P/TSX Venture Composite Index rose above the 200-day moving average for the first time in three years. The index is also very close to experiencing a golden cross, which is when the shorter-term 50-day moving average crosses above the 200-day moving average. Historically, traders see this cross as extremely bullish.
The Policy View From Washington
by Scott Brown of Raymond James,
Lawmakers put the finishing touches on the budget bill, which will remove most of the fiscal policy uncertainty for the next two years. Thats helpful for the economy and the financial markets, although the debt ceiling remains a possible trouble spot. Federal Reserve officials seem intent on continuing the tapering of asset purchases, but economic and financial market developments will dictate the pace.
A Problem with the Numbers - Unemployment and the Fed's Timetable
by Anthony Wile of J.P. Morgan Funds,
Given a potentially inaccurate assessment of labor force participation, the Federal Reserve may be missing the mark on their current economic projections, which increases the potential for policy error going forward. Assuming the natural rate of unemployment is at the low end of Fed projections, the Fed can lower forward guidance thresholds without spurring an acceleration in inflation.
Crosscurrents Buffet Markets
by Bob Doll of Nuveen Asset Management,
U.S. equity performance was mixed last week, as the S&P 500 recovered from Mondays sell-off that was the largest one-day decline since early November. Economic data was mostly in line or slightly better than expected, following the disappointing December unemployment report. Corporate earnings drove much of the price action. Bank earnings were fairly well received but did not always translate to good performance since the stocks ran up earlier. Negative guidance trends remain an overhang, particularly for retail.
Results 3,151–3,200
of 3,702 found.
