The Risks and Opportunities in Emerging Markets
For the past 30 years, emerging markets have provided return enhancement and risk diversification opportunities for global equity investors. That has been fueled by the liberalization of the Chinese capital market, which comprises about a third of the allocation to emerging market indices. In 2019, emerging markets have been volatile, driven by changes in U.S. monetary policy, increasing political uncertainty and deteriorating conditions for international trade. My guest, Peter Gillespie, and I discuss whether these factors are temporary or will have a long-lasting impact.
Matthews Asia - Opportunities in Emerging Markets
The emerging markets (“EM”) equity asset class has evolved considerably over the past decade such that many active EM equity managers may find it challenging to create long-term alpha over the benchmark. Countries such as China and India are moving to the fore, historical drivers of growth are changing and technology, innovation and health care are becoming a larger part of the opportunity set. It has been difficult for EM investment teams to keep up with these changes. My guest today, David Dali, wrote those words in a recent commentary, and we discuss how he and his team are positioning to adapt to that changing landscape.
Expecting a Market Downturn? Make Sure You’re Following the “Noah Rule”
Predicting a major economic or financial event—whether that’s a recession, market downturn or even your own retirement—requires that you also take action. Otherwise your prediction was meaningless.
Time to Do the Hard Thing
Much of the reaction to last week’s Inflationary Angst letter boiled down to, “Get government out of the way and the free market will work.” Others said the opposite: Government must help people even more than it already does. I wish it were that easy. Neither of those options are what we need, and today I will explain why.
UK Election: Will Tory Victory Bring Investors Back to UK Equities?
As widely expected, the Conservative Party emerged victorious in the UK general election. Our Colin Morton anticipates UK equity markets will welcome the outcome, but cautions that some uncertainties remain.
UK Elections: Conservatives Win Big, Brexit Will Happen – What Kind of Brexit Is Still Unclear
While the election outcome was quickly reflected in the pound exchange rate, the direction from here depends on what kind of relationship Boris Johnson really (really) wants to have with the EU. Find out more from our currency expert.
The Big Four Economic Indicators: November Real Retail Sales
Month-over-month nominal sales in November increased by 0.2% (0.19% to two decimal points). Real Retail Sales, calculated with the seasonally adjusted Consumer Price Index, decreased by 0.1% (0.07% to two decimal points).
ECRI Weekly Leading Index Update
This morning's release of the publicly available data from ECRI puts its Weekly Leading Index (WLI) at 145.9, down 1.9 from the previous week. Year-over-year the four-week moving average of the indicator is now at 1.23%, down from last week. The WLI Growth indicator is now at 2.23, also down from the previous week.
Retail Sales: Up 0.19% in November
The Census Bureau's Advance Retail Sales Report for November was released this morning. Headline sales came in at 0.19% month-over-month to one decimal and was below the Investing.com forecast of 0.5%. Core sales (ex Autos) came in at 0.12% MoM (to two decimals).
Household Incomes: The Value of Higher Education
What is the value of education for household income? The Census Bureau's annual survey data for 2018 published in September gives us some interesting insights into this question. The median income for all households with a householder age 25 and older was $64,761. The chart below shows the median annual household income for nine cohorts by educational attainment. We've rounded the data points to the nearest $100, e.g. $64.8K for all households age 25 and older.
The Unique Opportunities and Challenges for Bond Investors in 2020
Dave Plecha, Global Head of Fixed Income at Dimensional Fund Advisors, will comment on the Advisor Perspectives Core Bond Fund survey results and discuss fixed income investing in the current market. In this webinar, you will learn about:
- Navigating an inverted yield curve
- Expanding the investment opportunity set with global diversification
- Investing in a negative rate environment
After the webinar, Dave will be around to answer live audience questions.
Household Incomes: The Decline of the "Middle Class" 2018 Update
The median household is the statistical center of the Middle Class. In terms of income, this class has not gained much in recent decades. Let's take a closer look at a troubling aspect of the Census Bureau's latest annual household income data, issued in September. In this update, we'll focus on the growing gap between the median (middle) and mean (average) household incomes across the complete time frame of the Census Bureau's annual reporting, which began in 1967, to the release of the annual data for 2018.
Advisors and Clients Walking past Each Other on Sustainable Investment
Did you know that more than $12 trillion in assets under management are engaged in one or more strategies of sustainable investment in the United States? This comprises more than 25 percent of the professional managed assets across the country and is a 38 percent growth from 2016 figures.
Three Highlights from the MarketCounsel Summit
MarketCounsel’s Summit, held earlier this week in Miami, lived up to its reputation as the “all-star game” of financial advisor conferences, attracting top-level executives from throughout the investment industry. Here are three highlights from Tuesday’s sessions.
Should You “Sell” Volatility?
Academic theory predicts that the volatility implied by the VIX index will be greater than the realized volatility. That difference can be thought of as an insurance premium investors are willing to pay because volatility tends to spike when stocks crash, as in the last bear market. New research confirms that investors can profit from this and that such a strategy is uncorrelated with other traditional sources of return.
November Producer Price Index: Core Final Demand Unchanged MoM
Today's release of the November Producer Price Index (PPI) for Final Demand was unchanged month-over-month seasonally adjusted, down from 0.4% last month. It is at 1.1% year-over-year, unchanged from last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at -0.2% MoM, down from 0.3% the previous month and is up 1.3% YoY NSA. Investing.com MoM consensus forecasts were for 0.2% headline and 0.2% core.
Identifying and Avoiding Conflicts of Interest
MarketCounsel is known as the “adviser’s advisor.” It is the leading business and regulatory compliance consulting firm to the country’s preeminent entrepreneurial investment advisors. It delivers comprehensive, regulatory compliance solutions. It works with startup investment advisors through its RIA Incubator program, and it offers outsourced compliance department capabilities through its RIA Institute.
Inflation: An X-Ray View of the Components
Here is a table showing the annualized change in Headline and Core CPI, not seasonally adjusted, for each of the past six months. Also included are the eight components of Headline CPI and a separate entry for Energy, which is a collection of sub-indexes in Housing and Transportation. We can make some inferences about how inflation is impacting our personal expenses depending on our relative exposure to the individual components.
Assessing Potential US Health Care Reforms Ahead of an Election Year
Health care reforms are always a popular topic of discussion ahead of a US presidential election campaign, where politicians talk about proposed changes that can be very different than the current system.
Teeter-Totter Stock Market
One way of thinking about the share price of a common stock is the price range as a teeter-totter. When the psychology of investors is very negative, enthusiasm for the company hits the ground. On the other end, when everyone is in love with a company’s shares, their end of the board can’t seem to get any higher. Where is the board end hitting the ground currently and who is stuck up in the air on a psychological high?
The Fund That Isn’t Following the ESG/SRI Herd
In the U.S., between one quarter and one third of all assets managed are done so with an ESG or SRI mandate. Outside the U.S., that percentage is even higher. The Vitium Global Fund, formerly the Vice Fund, buys what most ESG/SRI investors scorn, stocks in the tobacco, alcoholic beverage, gaming and aerospace/defense industries.
What Inflation Means to You: Inside the Consumer Price Index
Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.
Is the Fed Gearing Up for a New Round of Quantitative Easing? Here Are the Possible Signs
“This is not QE. In no sense is this QE.” That was Jerome Powell in early October, answering a reporter’s question on whether the Federal Reserve’s intervention in the overnight U.S. repo market constituted another round of quantitative easing (QE).
Gundlach on the Biggest Risk Facing Bond Investors and the Likely Next President
Fear among bond investors is focused on rising rates, but Jeffrey Gundlach says you should worry about something more sinister. In his webcast yesterday, he also offered his updated 2020 presidential election prediction.
Consumer Price Index: November Headline at 2.05%
The Bureau of Labor Statistics released the November Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 2.05%, up from 1.76% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 2.32%, up slightly from the previous month's 2.31% and above the Fed's 2% PCE target.