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New Study: We're Nowhere Near Peak Coal Use in China and India
Resource investors, take note: By 2025, just 10 years from now, energy consumption in Asia will increase a whopping 31 percent. A whole two-thirds of that demand, driven largely by China and India, will be for fossil fuels, most notably coal.
Correlations Have Spiked In The US, Less So Around The World
by Eric Bush of GaveKal Capital,
The correlation between US stocks and the MSCI World Index has once again spiked as volatility has increased. In the chart below, we show 20-day, 65-day, and 200-day rolling correlation between US stocks and the MSCI World Index. The 20-day correlation has increased to 0.82 which is the highest level since 9/7/2011 and it surpasses any level hit during the financial crisis.
China: Double, Double Toil and Trouble/Fire Burn, and Cauldron Bubble?
by Andy Rothman of Matthews Asia,
Many argue that China’s economy is descending into policy chaos and a witches’ brew, otherwise known as a hard landing. But perhaps tellingly, even during the recent A-share fall, Chinese consumers seemed to shrug off the drama and continued to spend. China’s recent economic developments can be seen as stumbles along the path toward growth rates that are continuing to decelerate (but are still quite fast) from an economy that is increasingly “rebalanced.” This latest issue of Sinology explores the thinking behind this non-consensus conclusion.
Protecting Against Inflation In a Deflationary World
Powerful global deflationary forces will continue to put downward pressure on the prices of inputs and outputs for months, if not years, to come. Even if the US Federal Reserve and the Bank of England raise policy interest rates over the months ahead, inflation risk premiums built into market interest rates will remain small. In the absence of strong wage increases, unprecedented global growth in the supply of resources and outputs relative to demand will linger—and inflation will remain constrained.
Making Sense of Market Volatility
• On Aug. 21, the Dow Jones Industrial Average entered a correction and reminded investors what volatility looks like.
• Several Invesco senior investment leaders discuss their views of market volatility.
• They share how it affects, or doesn’t affect, the opportunities they see.
Largest Driver of Performance Over the Last Month? Beta
by Jennifer Thomson of GaveKal Capital,
As part of our treasure trove of data and tables, we rely on our factor scoring model to tell us the most important elements that have affected performance over various time periods and in different regions. For developed markets (DM), the most influential factor over the last week and month (coming in 2nd over the last year and 5th over the last three months) has been beta.
Meet QT; QE's Evil Twin
by Peter Schiff of Euro Pacific Capital,
There is a growing sense across the financial spectrum that the world is about to turn some type of economic page. Unfortunately no one in the mainstream is too sure what the last chapter was about, and fewer still have any clue as to what the next chapter will bring. There is some agreement however, that the age of ever easing monetary policy in the U.S. will be ending at the same time that the Chinese economy (that had powered the commodity and emerging market booms) will be finally running out of gas.
Will Unsettled Markets Unsettle the Federal Reserve?
by Carl Tannenbaum of Northern Trust,
The question of how events in the Far East will affect the Fed has come up frequently in recent conversations. At the outset, it should be noted that central banks do not center their policies on the levels of asset markets or the level of volatility.
China Sets its Sights on Life Sciences
by Jerry C. Shih of Matthews Asia,
China is a market too large to be ignored—this has long been a saying among those considering doing business in the country. But increasingly, multinational corporations see China as a hub of nascent innovation. China’s evolving pharmaceutical landscape and the government’s pro-innovation policies are driving indigenous innovation in its life sciences. Asia Insight explores China’s path in this arena.
Vietnam-EU Agreement: A Good Deal for Southeast Asia
As investors in Vietnamese stocks, the primary constraint we face is one of liquidity and limited choices in which to invest, but we are hopeful that will soon change. Vietnam has had a fast-growing economy, and we have found good companies there, including some that are state-owned.
12 Questions for a 12% Correction
by Burt White of LPL Financial,
The recent market downdraft and related uncertainty in China have led to many investor questions. The strong 6.5% rebound in the S&P 500 over the last three trading sessions (August 26, 27, 28, 2015) has cut the S&P 500’s losses from the 2015 peak (2130 on May 21, 2015) to 6.7%. In response to the S&P 500’s recent 12% correction?—?the first decline of more than 10% since 2011?—?we answer 12 investor questions. Bottom line, we do not expect the latest correction and China uncertainty to lead to the end of the U.S. economic expansion or the end of the six-and-a-half-year old bull
Searching for Sustainable Growth in Malaysia
by Dilip Badlani of The Royce Funds,
As an active manager with a value orientation, Portfolio Manager Dilip Badlani seeks to locate inexpensive companies helmed by management teams that have demonstrated an ability to consistently execute plans to grow their business irrespective of economic conditions. Though not without its challenges, Malaysia's history of perseverance makes it an attractive market for disciplined and patient investors.
Bremmer’s Choices
Last week, we wrote our first formal book review as a Weekly Geopolitical Report. The book, Superpower: Three Choices for America’s Role in the World, is a recently published book by Ian Bremmer in which he discusses three models for American foreign policy. In our closing comments last week, we promised to take a deeper look at Bremmer’s foreign policy models to examine their costs and benefits. In this report, we analyze his three models of exercising the superpower role, Indispensable America, Independent America and Moneyball America, and discuss which model is the most likely choice.
Market Reset, Not Recession
by John Calamos of Calamos Investments,
In our view: Neither the U.S. or global economy is headed for recession; instead, we are seeing a market reset that is not entirely unexpected. Markets are likely to be extremely choppy over these next months, and we may see additional corrections. Over the near term, energy and commodity prices will remain volatile, with global interest rates and currency turmoil adding to the headwinds. Market dislocations are providing us with select opportunities to establish and build positions in fundamentally strong companies, worldwide—including in emerging markets.
Investors Should Not "Buy the Dip" Because Macro and Market Risks Remain Elevated
The global market meltdown is turning into a rout as investors who ignored the warning signs of overvaluation, weakening earnings/revenue trends, and deteriorating internal market dynamics may now be heading for the exits. As advisors and investors try to rationalize asset allocation and equity market exposure, they may deem it appropriate to stick with investments in countries with the strongest economies. Reasoning, stronger eco-markets should behave better than markets in countries with economies under pressure.
Making Sense of Market Volatility
by Karen Dunn Kelley of Invesco Blog,
On Aug. 21, the Dow Jones Industrial Average entered a correction, falling 10% from its most recent peak, and reminded investors what volatility looks like after almost four correction-free years. While volatility exposes weaknesses in the market, in my opinion it also reveals the strength of high conviction managers who are skillfully navigating the market. Active management and smart beta strategies seek to surpass the “market averages” offered by traditional benchmarks, providing the potential not only for higher returns, but also for a smoother ride.
Stay Calm and Carry On
by Kenneth Kim of EQIS Capital,
As most everyone is aware, the markets have been highly volatile, and mostly down, during these past few days. Everyone seems to be pointing fingers at China’s slowing economy as the cause. Before joining EQIS, I was a professor of finance at Renmin University in Beijing, China for many years. Recognized as one of the top 15 economists* in China, and a frequent economic commentator on the Chinese economy on China’s only English-language national television station, I can speak about, and address, this current market condition that places blame on China.
Times Like This
by Robert Horrocks of Matthews Asia,
Times like this in the markets can be unsettling. We are accustomed to dealing with risk, or at least familiar with “normal” market swings from year to year. But when there is a sudden abrupt fall in markets, investors are often left to wonder “What is going on?” Are we seeing a repeat of 1997? 2013? Matthews Asia’s Chief Investment Officer Robert Horrocks, PhD, offers his views on recent developments, drawing from historical context but also noting the instances in which history can be misleading.
China’s Economy Is Undergoing a Huge Transformation That No One’s Talking About
Misconception and exaggeration are circling China’s economy right now like a flock of hungry buzzards. If you listen only to the popular media, you might believe that the Asian giant is teetering on the brink of economic disaster, with the Shanghai Composite Index’s recent correction and devaluation of the renminbi held up as “proof.”
Don't Panic: Putting Market Turbulence in Context
by Tom Fahey of Loomis, Sayles & Co.,
Sharp declines in China’s equity markets have heightened fears about the country’s economic prognosis and what it might mean for global growth. While concerns center on the emerging markets, the tumult has spilled across global financial markets. Our advice: don’t panic.
On Market Corrections, and Keeping a Calm Head
Despite recent market volatility, we consider the long-term outlook for China’s market and economy to be good. We don’t view this recent correction as the start of any sort of economic or market collapse underway, and it doesn’t change our view on investing there.
12 Attractive Fast-Growing Dividend Growth Stocks for High Total Return
by Chuck Carnevale of F.A.S.T. Graphs,
The current market environment is presenting many challenges to the conservative retired investor in need of current income. Interest rates are near all-time lows and the valuations of many blue-chip dividend growth stocks have become extended. Consequently, it is becoming very difficult to find quality investment opportunities that can provide safety through sound valuation, attractive yield and the potential to fight inflation.
Markets Crashing, Gold Rising
U.S. Investors are on edge following last week’s and today’s sell-off in stocks around the globe. The carnage impacted equity markets in Asia, Europe, and the U.S.
Interestingly, the U.S. dollar also weakened. And bonds and gold are getting most of the safe-haven buying.
China Commentary by John Calamos: Market Reset, Not Recession
The global market selloff of these past days has tested the mettle of many investors—particularly as the
turmoil has followed an unusual period earlier this year, where equities delivered healthy advances with very
little volatility. While we’ve gone on record saying that we expected volatility to persist (including in our
most recent Outlook), we have been surprised by how severe the downturn has been. However, experience
teaches that there can be many opportunities in volatile markets.
Developed Asia Pacific: Economy Trends Update July 2015
by Team of Thomas White International,
After a slump in consumer spending had raised concerns of an economic slowdown in Japan recently, there was a welcome uptick in indicators such as manufacturing activity and exports. However, slowing growth in China, a major trading partner, is widely expected to have a bearing on the economy in the near future. Meanwhile, the Reserve Bank of Australia left interest rates unchanged in its recent review as expected, thanks to subdued inflation, a stabilizing job market, and early signs of a pick-up in business investment.
Unattractive ‘Glamour Stocks’ Lead the Way in Asia Pacific
by Brent Bates of Invesco Blog,
Economic growth continues to decelerate across the Asia Pacific region. Domestic economies have not been robust enough to offset weakness in commodities and exports, and both revenue and earnings expectations were adjusted downward by 1% during the second quarter. Because growth is scarce, investors have been crowding into the highest-growth and highest-quality stocks; within Asia and Japan, this group of stocks is now trading at the highest premium to the rest of the market that we’ve seen in the past 20 years.
Global Economic Overview: July 2015
by Team of Thomas White International,
While some of the emerging economies continue to face slow growth from lower commodity exports, the outlook for most developed economies has brightened in recent months. The U.S. slowdown during the first half of this year was not as bad as thought earlier, while economic trends from the Eurozone remain stable. Helped by sustained labor market gains, U.S. consumer sentiment is picking up again and should help aggregate growth during the second half of the year.
One man’s weed...
I spent time at the Woodward Dream Cruise this week in my brother Charlie’s 1985 Ford Mustang convertible (his first new car which he bought and has maintained since that year). I think the Cruise is the largest annual assemblage of classic cars on the planet. What a great time for anyone who enjoys historical vehicles and the memories they bring back, especially here in the Motor City.
Why the Yuan Devaluation Does Not Erode China’s Long-Term Investment Potential
by Nick Niziolek of Calamos Investments,
In his blog post, titled “Why the Yuan Devaluation Does Not Erode China’s Long-Term Investment Potential,” SVP and Senior Co-Portfolio Manager Nick Niziolek discusses the opportunities the Calamos team sees in China.
International Equity Commentary: July 2015
by Team of Thomas White International,
International equity prices were mostly unchanged during the month of July as gains in Europe were offset by losses in Asia and select other markets such as Canada. Further improvement in economic trends from the Euro-zone and the tentative agreement to provide additional financial support to Greece brightened investor sentiment in the region.
Chinese Yuan Depreciates Further: What is the Endgame?
by Rob Waldner of Invesco Blog,
After China’s surprise devaluation of the yuan by 1.9% last Tuesday, the Chinese currency was devalued by another 1.6% on Wednesday. Policymakers appear to be following a pattern of setting the daily fix, which sets the center point for trading during that day, with reference to the market price at the close of the previous day. Invesco Fixed Income believes that further devaluations are likely as the People’s Bank of China (PBoC), the country’s central bank, acquiesces to market pressure and price movements over time.
China Breaks into a New Range
by Carl Tannenbaum of Northern Trust,
For some time, analysts have suspected that China’s economic performance was trending well below targeted levels. The equity market correction that began earlier this summer seemed to confirm these concerns; only a substantial amount of official intervention prevented an outright crash. Now we can add exchange-rate uncertainty to the list of things that China will have to manage very carefully.
China Not Immune to Contagious Quantitative Easing and Massive Printing of Cheap Money
First it was the U.S. Federal Reserve. Then, in 2013, Japan launched what became known as Abenomics. The European Central Bank (ECB) followed suit in 2014. And now the People’s Bank of China has joined the parade. All of them in some way stimulated economic growth by initiating monetary quantitative easing (QE) programs.
3 Things: Freight, Deflation, No Hike
by Lance Roberts of Streettalk Live,
We often look at broad measures of the economy to determine its current state. However, we can often receive clues about where the economy may be headed by looking at data that feeds into the broader measures. Exports, imports, wage growth, commodity prices, etc. all have very important ties to the health of the consumer which is critical to an economy that is nearly 70% driven by their consumption.
Turkey’s Predicament
It is our view that over the next few decades Turkey is well positioned to return to its status as a dominant regional power; however, the situation is much less clear in the near term. Turkey has been trying to run a foreign policy of having “no problems” with its neighbors. This stance has become impossible to maintain. Unfortunately for President Erdogan, Turkey is encircled by instability and is struggling to develop a response.
Results 3,151–3,200
of 4,282 found.
