A review of last month’s market-moving events across countries and asset classes.
A number of factors spurred improved investor sentiment in emerging markets over the past month, including an interest-rate cut from the US Federal Reserve. Franklin Templeton Emerging Markets Equity outlines the news and events shaping market moves during October, and the reasons why the team is optimistic about the coming year.
During Q3 2019, “haven” assets were strongest among the primary asset classes. This followed a similar pattern from the second quarter.
October has historically been a volatile month for stocks. But this year, it marked the second consecutive month of positive returns for global equities. Find out why.
Although economic signals are mixed, bottom-up sector fundamentals help inform decisions on sector ratings.
World equity markets have produced strong returns year-to-date, driven by declining interest rates and rising growth stocks. Despite double-digit gains for the MSCI World index, geopolitical gloom, notably trade wars and Brexit, hangs over investors, economies and the share prices of more economically-sensitive companies.
Why active has the potential to outperform passive in fixed income.
Preferred securities represent a relatively underappreciated opportunity for income-oriented investors in an overall low yield environment where attractive investments may seem hard to find. In the current market they offer yields and returns comparable to high yield debt, but with quality and trading characteristics more nearly approaching investment grade credits.
The fourth quarter will provide critical insight into the near-term direction of the US-China trade conflict as well as into whether the Fed will maintain the narrative of a mid-cycle monetary policy adjustment or switch to acknowledging an outright easing cycle.
• Volatility has been the story of 2019. The markets have dealt with uncertainty around global trade restrictions, recession fears and the possibility of impeachment of President Donald Trump.
• We project these headwinds will cause global economic growth to remain relatively weak for the remainder of the year.
• We believe the likelihood of a near-term recession is unlikely and tentative signs of economic stabilization could develop in the next few months.
Emerging markets equities performance was overwhelmed in the third quarter by macroeconomic factors, but we believe going forward, investors could benefit from favorable fundamentals and loosening central bank policies.
Chinese equities were flat in September. A-shares posted slight gains while small caps posted slight losses.
The United Kingdom and the European Union have signaled that a Brexit deal is still possible, with signs of a potential compromise over the Irish border starting to emerge. Although the prospect of reaching a deal before the 31 October deadline does exist, time is running out.
A brief monthly update on what's happening in the municipal bond market.
As we look ahead to the closing months of 2019, most of the year’s volatility drivers remain in place. With that in mind, we believe now may be the time to adopt a more defensive posture without deviating from your long-term strategic asset allocation.
The US-China trade conflict has remained at the forefront of investor concerns in recent months, with both governments imposing tariffs on each other’s goods. While continued tensions are likely to result in continued market volatility, Franklin Templeton Emerging Markets Equity nonetheless finds reasons to be positive about emerging markets, with a more dovish global central bank backdrop offering support.
With a resurfacing in trade tensions and persistent economic uncertainties, investors should prepare for further volatility.
Covered call strategies in a closed-end fund may help long-term investors manage short-term volatility.
U.S. stocks plunged Wednesday, as weak economic data rattled investors. Here’s what you should know.
History shows that once our recession forecast model reaches current levels, aggressive policy can delay recession, but not avoid it.
MarketDesk Research notes that the past two weeks have seen a strong reversal in the global markets. Is the reversal a changing of the guard?
This paper provides a closer look at one of Smith Capital Investors’ key themes for 2019. Specifically, it looks at the potential impact of CEO/CFO behaviors around debt, and the persistent search for the “perfect capital structure.”
Trade fears, social unrest in Hong Kong and Brexit uncertainties weighed on markets in August. Franklin Templeton Emerging Markets Equity expects continued volatility, but an interest-rate cut from the US central bank in September could help stabilize emerging market currencies.
There is an old tongue-in-cheek market adage that says that portfolio managers are “never wrong, but sometimes they are early.” Well, in our case, that expression was flipped -- We were exactly right, but late.
Market volatility remains elevated, reflecting trade tensions and continued concern around the yield curve.
Credit spreads could get tighter in this liquidity-driven rally, but history has shown that the potential for widening from here is much greater.
“GMO’s 7-Year Asset Class Forecasts for both stocks and bonds have generally declined in 2019, predominantly due to strong appreciation in asset prices,” said Rick Friedman from GMO’s Asset Allocation team.
Successful long-term investing depends upon the identification of sustainable companies. We believe traditional investment analysis tends to underestimate some risks faced by companies today.
The monthly factor report details those factors that influenced regional and global equity performance in July as well as over extended time periods.
For the most part, the second quarter saw a continuation of the first quarter’s positive performance across many asset classes. This furthered a reversal of the dismal 2018 when every primary asset class was negative.
The outperformance of defensive sectors relative to cyclicals is looking extreme in Europe, suggesting the macro trade around bond-sensitive stocks may have stretched too far.
The 11-year equity bull market is certainly getting long in the tooth, but several important indicators suggest we may not be at the end yet.
High-yield corporate bond spreads and bank loan discount margins typically widen when the Fed is lowering interest rates.
In today’s world of disruptive innovations, biotechnology is entering the most transformative phase our health care analysts have seen in 25 years. Since mapping out the human genome in 2003, drugs using new treatment paradigms—like gene and cellular therapies—have jumped out of laboratories and into the marketplace to tackle humanity’s most vexing diseases.
When macroeconomic growth slows, investors get edgy. But the economy isn’t the only thing that drives revenue and earnings growth for companies. Some industries are poised to expand at a rapid clip even if GDP growth is subdued or decelerating.
As we reach the midpoint of 2019, some investors could be feeling a little queasy from the market’s ups and downs. Our advice is to remain patient. Gain more insight from our latest client-approved Investment Outlook.
Trade issues continued to dominate headlines in June, with easing in US-China trade tensions providing a boost to emerging markets overall during the month. But Franklin Templeton Emerging Markets Equity cautions trade-related headwinds could persist. The team shares its latest emerging-market outlook and explains why the small-cap space looks attractive right now.
Shares in Alphabet have come under a good deal of pressure over the last year as investors process the implications of increasing regulatory scrutiny, culminating in reports this month that the U.S. Department of Justice (DOJ) is preparing for an antitrust probe into big tech.
Earning income without taking excessive risk is a balancing act—and it can be hard to pull off in the late stages of a credit cycle. A credit barbell strategy can help investors stay on their feet.
We continue to favor emerging markets equities, particularly emerging market value, and see some appeal in international value stocks. In the U.S., small-cap value is a pocket that has become quite attractive to us.
Tomorrow will obviously be one of the most important news days of the year for financial markets with the Fed expected at the very least to signal that a rate cutting cycle is in the offing.
Trade tensions caused investors to back away from emerging markets in May, but there are many reasons to be optimistic about the asset class and the earnings outlook ahead.
Market updates from across the region.
U.S. - China trade concerns continue to weigh on global markets. Matthews Asia offers its perspective on how the dispute affects the long-term investment landscape.
In this mid-quarter update, entitled “Escalation,” we discuss the backdrop of escalating trade wars and our belief that the environment is more favorable for US Treasury bonds relative to stocks.
Primed for growth, Asia’s health care sector helps capture consumer spending in the region.
African swine fever is ravaging China’s pork supply and having a global impact on protein prices. For equity investors, the crisis serves as a reminder that even amid trade-war uncertainty, research into domestic trends can help investors access the country’s vast stock market.
