The weak dollar, low-interest rates, and accelerating growth—these are just three of an array of factors that argue in favor of increasing your clients exposure to emerging markets.
Join us Wednesday, March 10, for a review of EM investment opportunities. Headlining our webcast panel will be Calamos Founder, Chairman, and Global Chief Investment Officer John P. Calamos, Sr. Joining John will be:
In addition to covering secular growth themes (monetary and fiscal stimulus, China’s global leadership, growth and inflation expectations, the weaker dollar, and strengthening liquidity), you’ll hear the Calamos’ take on several thematic tailwinds driving the EM opportunity, including:
We’ll conclude our discussion with a review of the differentiated approach of Calamos Evolving World Growth Fund (CNWIX), which has successfully pursued a favorable risk/reward skew through bottom-up security selection, top-down thematic analysis, and opportunistic use of less-well-known asset classes, such as convertible securities.
There is hope that economies will see a more sustainable and robust recovery this year, given unprecedented levels of monetary and fiscal stimulus and as more individuals are vaccinated against COVID-19. But one question for investors is what happens next—will inflation and higher interest rates be a consequence?
In the near term, markets should not be too worried about a possible spike in demand driving up inflation and interest rates, causing asset prices to fall across the board. But longer-term inflation risks are skewed much more to the upside than many investors and policymakers seem to realize.
"This pandemic has magnified every existing inequality in our society – like systemic racism, gender inequality, and poverty." Melinda Gates
How long will the effects of COVID be felt in potential growth, the tourism sector and bankruptcy filings?
Yields have jumped so much, in fact, that they’re giving stocks a serious run for their money. The 10-year yield is now higher than the S&P 500 dividend yield, which may have added to the selling pressure that cost stocks close to 2.5% yesterday.
We hope you enjoy Harold Evensky's latest NewsLetter.
Italy’s new prime minister, Mario Draghi, has a well-earned reputation for turning around difficult situations. But can he reverse Italy’s relative economic decline? And what does his program mean for Italian bond yields?
Inflation is back on investors' minds lately, and some may be wondering how to position their portfolios to confront this potential new scourge.
From cloud computing and automation to self-driving cars, technology continues to be one of the world’s hottest sectors. Our Chief Market Strategist Stephen Dover and Portfolio Managers Donald Huber and John Remmert believe active investing in technology and innovation is a global story, and government support and spending in next-generation technologies is likely a long-term positive.
Our positive 2021 economic outlook, combined with better-than-expected company fundamentals, supports strong credit performance and spreads.
Opponents of Harvard College’s affirmative action policies asked the Supreme Court to bar colleges from using race as an admissions factor, setting up what could be a defining showdown for higher education and the court’s conservative majority.
After receiving the genetic sequence of the novel coronavirus from China, it took Moderna just two days (two days!!) to generate the sequence of the vaccine. In less than a month, they produced the first clinical batch of the mRNA-1273 vaccine that has now seen tens of millions of doses distributed.
Rather than worrying about the prospects of higher long-term expected inflation, the US Federal Reserve is exuding confidence that it can maintain price stability should the need ever arise. It should think again, before the inflation genie has escaped from the bottle.
Target date funds should be designed to reduce the risk of rash selling.
The unprecedented $9 trillion rescue mission by central banks to haul the world economy from its coronavirus recession is being tested as rising bond yields and inflation bets threaten their ability to keep borrowing costs down.
Tencent Holdings Ltd.-backed Yuanfudao is seeking fresh funding at a valuation of more than $20 billion, people familiar with the matter said, as the cash-burning battle in China’s online education arena shows no sign of abating.
Hydrogen’s potential as an energy source is attracting renewed attention. It may take 20 years or so for the potential to be realized. But the effects are likely to be felt within the planning horizons of most long-term investors—a good reason to start thinking now about the investment implications.
The energy sector is beginning to adapt to the realities of climate change. Who is best positioned for the future?
The GMO Asset Allocation Team has released its latest 7-Year Asset Class Forecasts through January 2021.
The obstacles to higher yields in the world’s biggest debt market are slowly melting away.
All eight indexes on our world watch list posted gains through February 8, 2021. The top performer is Hong Kong's Hang Seng with a gain of 7.67%, India's BSE SENSEX is in second is with a gain of 7.53% and Tokyo's Nikkei 225 is in third with a gain of 7.08%. Coming in last is London's FTSE with a gain of 0.98%.
Weighing the costs of global vaccine access, minimum wage and the energy rally.
Many investors think there are only two options in a market where participants have become overly exuberant, either 'I want in' or 'Get me out.' Our strategies are more nuanced, and we believe fit better with what we expect to transpire.
That there was a price “bubble” that burst in the American political economy from 1835 to 1845 is beyond question. The challenge is to reconcile the data sets for commodity and securities prices, interest rates and production volumes with the narratives of what happened.
Liquidity is valuable to investors. Therefore, they should demand higher expected return (a risk premium) for less liquid stocks. But new research shows they have not earned that extra return in public equity markets.
Rather than going deep into one theme, this week we will do a “Random Thoughts” from the Frontline. Today we will cover several topics in shorter form: valuations, infrastructure, the debacle in Texas, and a lot more.
Millions of Texans were without power this week when the state was hit with a record setting winter storm. An overhaul of its aging infrastructure would require massive amounts of metals and other materials, which would be positive for miners and producers.
In late 2020, a new kid emerged on the bargain-of-the-decade block. UK stocks, and notably UK value, reached very cheap levels relative to value stocks in other developed economies. Today, UK value remains at remarkably low valuations relative to most of its fundamentals.
A strong economic rebound is expected towards the middle of the year, followed by a return to more normal growth in 2022.
A vaccine-fueled economic recovery and investors’ surging appetite for risk mean that the European equity rally can keep going in 2021, according to strategists.A vaccine-fueled economic recovery and investors’ surging appetite for risk mean that the European equity rally can keep going in 2021, according to strategists.
It’s tempting these days for some investors to question the role of fixed income in portfolios. After all, real yields have plunged, potentially leading to less income today and smaller capital gains tomorrow.
The Year of the Ox looks bullish for China with economists and analysts forecasting GDP growth of 8.1% and earnings growth of 18% for the MSCI China Index. But February holds key developments for China that could impact this outlook, including stock delistings, trade, and COVID-19.
For a variety of reasons, many investors are worried about higher inflation. While we may see reflation (a pickup in prices that were restrained due to the pandemic), a significant increase in underlying inflation appears unlikely.
New virus variants are stoking COVID-19 angst, but we see vaccination programs opening the door to economic and market recoveries.
In this strange college admissions season, fewer high schoolers are turning in that dreaded number, their SAT score.
I offer 15 explanations for the bubble in stock prices and a single explanation for the one in bond prices. Those bubbles could deflate for any of 10 reasons I also identify, severely diminishing the retirement savings of baby boomers.
Although US technology equities tend to dominate the conversation about technology investing, Franklin Equity Group’s John Remmert and Don Huber believe there are many innovative international technology companies that tend to get overlooked.
There are signs that the food inflation that’s gripped the world over the past year, raising prices of everything from shredded cheese to peanut butter, is about to get worse.
U.S. Treasury yields rose to the highest since February 2020 and are at risk of climbing further, as investors start to factor in the full economic impact of a stimulus plan totaling as much as $1.9 trillion.
The Emerging Markets (EM) asset class is often labelled a commodity play for investment purposes. The argument is simple and directional; EM countries export commodities, so rising commodity prices are good for the asset class, whereas falling commodity prices hurt EM countries.
Emerging market equities have historically provided investors with outsized returns but have also been the biggest decliners during global equity market pullbacks. For the last 10 years they have lagged the performance of US Equity markets by a considerable margin. But with attractive relative valuations, higher earnings growth forecasts, and underrepresentation in global portfolios, we believe they are set to reverse that trend and outperform US markets over the next 5-10 years.
Despite questions over financing the European Union’s (EU’s) new Green Deal, the green transition is now under way.
Are proposed fiscal policies and student debt forgiveness too much of a good thing?
Emerging-market investors seem to have a lot going for them right now -- and the renewed weakness in the U.S. dollar is adding to the bullish mood.
Cast a gaze across global bond markets and it’s a sea of calm. Yields are close to record lows, volatility is nowhere to be seen and central banks are still ploughing trillions of dollars into the economy to help foster a recovery.
With U.S. equity valuations very rich by historical standards, many – including Jeremy Grantham, Rob Arnott and Vanguard – are predicting emerging markets to excel. I’ll examine the case and give my thoughts on how to invest in emerging markets.
If, however, the pandemic continues into summer, it will mean the Gripping Hand is still squeezing us. Employment won’t recover and more small businesses will fail. This relief package, as large as it is, may prove necessary and maybe even too small.
Happy Year of the Ox! Today China and a number of other Asian countries celebrate the Lunar New Year, also known as the Spring Festival.
Rob Arnott: “There hasn’t been a better time to be a value investor at any other time in my career. I look back at the tech bubble and I never thought I would see valuations stretched the way they were then. We're back to that, and then some." We invite you to revisit “Reports of Value’s Death Have Been Greatly Exaggerated” now published in the Financial Analysts Journal.
Hope is high that economic growth will accelerate as more people are vaccinated against COVID-19, but so far economic data has been lackluster. Meanwhile, bond investors are expecting inflation despite signs that the economic recovery’s momentum may be stalling. Why does everything seem so disconnected?
Yields on two-year Treasury yields briefly printed a record low under 0.1% on Thursday as cash trading got underway in London after a holiday in Asia.
Stephen Dover, our Chief Market Strategist and Head of Franklin Templeton Investment Institute, shares four investment themes he’s thinking about as the world recovers from the COVID-19 pandemic.
By buying or overweighting characteristics-based factor exposure and selling or underweighting beta-based factor exposure, investors can position their portfolios to reap the rewards of factor investing while bearing less risk.
It’s more than enough money, at going prices, to buy one GameStop, two AMC Entertainments and four Bed Bath & Beyond's.
Our Fixed Income CIO Sonal Desai shares her investment views and strategies for the post-pandemic recovery. She explains why inflation looks likely to gain steam, and how the balance of fundamentals and valuations become especially crucial today when looking for attractive returns in fixed income.
Rick Rieder and team think that today’s potent policy cocktail holds important implications for the path of economic growth, markets and the value of a dollar.
The idea is to cut college costs by having an open mind and being willing to make some personal sacrifices.
It was a dinner conversation with former Federal Reserve Chairman Ben Bernanke in early 2020 that convinced Cesar Perez Ruiz that the golden age of bond investing was over.
Any surge in inflation will likely not last for long, but Italy's economic troubles and the shift in rental markets may endure.
For the 1830s, as for the 1990s, the great change would come not in the technology of delivery systems but in the extraordinary increases in the volumes of news and financial information being delivered because of the dramatic reduction in the cost of reproducing each item of news.
Powerful demographic trends will cause higher inflation and interest rates, and a reduction in inequality as labor reclaims its bargaining power in the global economy.
It’s hoped that an extra $1,400 in the pockets of everyday Americans may help support lagging U.S. consumption. We believe the stimulus, along with improved vaccine roll out, may also help support commercial air travel.
Today I want to discuss an arcane-sounding but incredibly important term you need to know: Yield Curve Control. Several central banks are already using it and I see a strong possibility the Fed will join them. But first we must again consider the Gripping Hand.
With the previous week’s short-squeeze headlines behind us, investors remained optimistic about a fiscal support package, which passed the Senate by a vote of 51-50, with Vice President Harris breaking the tie.
CIO Robert Horrocks, reviews a topsy-turvy 2020 and shares the reasons for his relative optimism for Asia and the emerging markets in 2021.
Heightened global economic risks mean that many poorer countries could take years to return to their pre-pandemic growth trajectories. And if higher inflation leads the US Federal Reserve to raise rates somewhat sooner than it currently plans, emerging markets will be hit particularly hard.
Commercial aviation still has some challenging times ahead of it, but I believe the worst is behind us, meaning now may be an opportune time to get exposure.
Discerning investors could eke more gains out of developing-nation bonds, but the bulk of the rally in the riskiest corners of the market may have passed.
Despite a pandemic, tariffs and superpower political tensions, the resilience of the Chinese economy was clear in 2020. In this issue of Sinology, we highlight five macro trends from 2020 that investors should watch this year.
Kevin Carter, the Founder & CIO of The Emerging Markets Internet & Ecommerce ETF (NYSE:EMQQ) will be covering the impacts of the Chinese delisting developments, the rumored Alibaba antitrust laws, and how Gen-Z will drive the next leg of digital transformation for the developing world. Kevin has worked alongside Princeton Economist Dr Burton Malkiel for over two decades focused on China/Emerging Markets that’s culminated in the creation of EMQQ and the best overall performing EM Index for the 1yr, 3yr, and 5yr periods according to ETFdb.
Massive growth in central bank balance sheets via quantitative easing, debt monetization, and firing of “big bazooka” stimulus packages brings renewed focus to potential shocks in the business cycle. An awareness of the macroeconomic “shocks” and their impact on asset prices should be incorporated in investors’ tactical asset-allocation decisions.
When investors talk about “the stock market” they are most often referring to an index that tracks stocks only in their home country. This “home bias” is evident when it comes to the make-up of investors’ stock portfolios. Investors around the world tend to hold mostly domestic stocks.
February begins with a stack of important economic scorecards. Among them are the last of the fourth-quarter corporate earnings reports, last week’s assessment of the 2020 gross domestic product (GDP), unemployment figures, consumer spending, as well as all the other regular reports that give us a snapshot of our recent economic history.
Corporate earnings are likely to be strong in 2021, reflecting strong consumer demand and resilient cash flows.
Nobody loves oil companies. Tesla Inc., the emblem of an emissions-free future, is worth more today than the top five Western supermajors combined.
The UK-EU trade agreement entered into just before Christmas is a 1,200-page monster which contains far more cons than pros for the British economy despite Boris Johnson doing his very best to convince the British public of the opposite. In this month’s Absolute Return Letter, you can see why.
Advisor Perspectives, the most-read eNewsletter for financial advisors as ranked by the Erdos & Morgan “FAMOUS” Study in 2019 and 2020, has announced its Venerated Voices™ awards for commentaries published in 2020.
Emerging markets seek a sustainable solution to debts, and the Fed takes a step toward sustainability.
The purpose of the Constitutional gold standard was to establish a reference point against which the prices of credits and commodities were set by the open exchange of bank notes and other promises to pay money.
The Fed recognizes their ongoing monetary interventions have created financial risks in terms of asset bubbles. They are also aware that most policy tools are likely ineffective at mitigating financial risks in the future. Such leaves them being dependent on expanding their balance sheet as their primary weapon.
Those of you with kids and grandkids may at some point have stepped inside a GameStop. If so, you might be familiar with the video game retailer’s tagline: “Power to the players.”
I’m often asked if I foresee inflation or deflation. Both are possible in their own ways, and frankly I feel a little funny telling people I think we will see both. I would just like to have a growing economy and dependable money that holds its value.
It may seem shocking, but a simple trip to the local store to pick up fresh produce or clothing could enable human exploitation. For investors, those same connections can exist within their portfolios—and it takes more than a passive effort to root them out.
A majority of the Senate (including two Democrats) has agreed to forego efforts to eliminate the filibuster during the Congressional term ending December 2022.
Inflation will likely heat up in the coming months, but not to worrying levels.
Precious metals in general did very well in 2020, and I expect them to keep pace in 2021, supported by heightened efforts in the U.S. and elsewhere to transition from fossil fuels to renewable energy.
As China begins the year of the Ox, many investors are wondering whether another bull run is possible in 2021. Given that last year’s rally was extremely narrow, we believe many parts of the market still offer pent-up recovery potential.
In the waning days of Donald Trump’s presidency, Jeremy Grantham warned that U.S. stocks were in an epic bubble. He now predicts Joe Biden’s economic-recovery plan will propel them to perilous new heights, followed by an inevitable crash.
By the end of the first decade of the 19th century, everyone in the U.S. was accepting denominations printed on paper by banks as payments in dollars. Americans had invented retail credit banking and discovered how much they liked it.
Asian/European Markets
Emerging Markets in 2021: The Case for Increasing Exposure Now
The weak dollar, low-interest rates, and accelerating growth—these are just three of an array of factors that argue in favor of increasing your clients exposure to emerging markets.
Join us Wednesday, March 10, for a review of EM investment opportunities. Headlining our webcast panel will be Calamos Founder, Chairman, and Global Chief Investment Officer John P. Calamos, Sr. Joining John will be:
In addition to covering secular growth themes (monetary and fiscal stimulus, China’s global leadership, growth and inflation expectations, the weaker dollar, and strengthening liquidity), you’ll hear the Calamos’ take on several thematic tailwinds driving the EM opportunity, including:
We’ll conclude our discussion with a review of the differentiated approach of Calamos Evolving World Growth Fund (CNWIX), which has successfully pursued a favorable risk/reward skew through bottom-up security selection, top-down thematic analysis, and opportunistic use of less-well-known asset classes, such as convertible securities.
Coming Out of COVID-19: A Look at Interest Rates and Inflation in Europe
There is hope that economies will see a more sustainable and robust recovery this year, given unprecedented levels of monetary and fiscal stimulus and as more individuals are vaccinated against COVID-19. But one question for investors is what happens next—will inflation and higher interest rates be a consequence?
Are Inflation Fears Justified?
In the near term, markets should not be too worried about a possible spike in demand driving up inflation and interest rates, causing asset prices to fall across the board. But longer-term inflation risks are skewed much more to the upside than many investors and policymakers seem to realize.
The Global Economy Post COVID-19
"This pandemic has magnified every existing inequality in our society – like systemic racism, gender inequality, and poverty." Melinda Gates
Economic Commentary: Long-Term Growth, Tourism, Bankruptcies
How long will the effects of COVID be felt in potential growth, the tourism sector and bankruptcy filings?
Government Bond Yields Have Surged, but Real Yields Are at Zero
Yields have jumped so much, in fact, that they’re giving stocks a serious run for their money. The 10-year yield is now higher than the S&P 500 dividend yield, which may have added to the selling pressure that cost stocks close to 2.5% yesterday.
NewsLetter - February 2021
We hope you enjoy Harold Evensky's latest NewsLetter.
Can Mario Draghi Recharge Italy’s Economy?
Italy’s new prime minister, Mario Draghi, has a well-earned reputation for turning around difficult situations. But can he reverse Italy’s relative economic decline? And what does his program mean for Italian bond yields?
Inflation Is Coming for Your Wealth. Here's What Investors Can Do About It
Inflation is back on investors' minds lately, and some may be wondering how to position their portfolios to confront this potential new scourge.
The Birth of Global Tech Continues
From cloud computing and automation to self-driving cars, technology continues to be one of the world’s hottest sectors. Our Chief Market Strategist Stephen Dover and Portfolio Managers Donald Huber and John Remmert believe active investing in technology and innovation is a global story, and government support and spending in next-generation technologies is likely a long-term positive.
High-Yield and Bank Loan Outlook - First Quarter 2021
Our positive 2021 economic outlook, combined with better-than-expected company fundamentals, supports strong credit performance and spreads.
Harvard Critics Ask Supreme Court to Ban Race in Admissions
Opponents of Harvard College’s affirmative action policies asked the Supreme Court to bar colleges from using race as an admissions factor, setting up what could be a defining showdown for higher education and the court’s conservative majority.
The Greatest Possible Stimulus
After receiving the genetic sequence of the novel coronavirus from China, it took Moderna just two days (two days!!) to generate the sequence of the vaccine. In less than a month, they produced the first clinical batch of the mRNA-1273 vaccine that has now seen tens of millions of doses distributed.
Pulling Up the Inflation Anchor
Rather than worrying about the prospects of higher long-term expected inflation, the US Federal Reserve is exuding confidence that it can maintain price stability should the need ever arise. It should think again, before the inflation genie has escaped from the bottle.
What the Pandemic Taught Us About Target Date Funds
Target date funds should be designed to reduce the risk of rash selling.
Powell Goes Easy on Surging Yields While Central Bank Peers Fret
The unprecedented $9 trillion rescue mission by central banks to haul the world economy from its coronavirus recession is being tested as rising bond yields and inflation bets threaten their ability to keep borrowing costs down.
Tencent-Backed Edtech Startup Seeks Funding at $20 Billion Value
Tencent Holdings Ltd.-backed Yuanfudao is seeking fresh funding at a valuation of more than $20 billion, people familiar with the matter said, as the cash-burning battle in China’s online education arena shows no sign of abating.
Five Things Investors Should Know About Hydrogen
Hydrogen’s potential as an energy source is attracting renewed attention. It may take 20 years or so for the potential to be realized. But the effects are likely to be felt within the planning horizons of most long-term investors—a good reason to start thinking now about the investment implications.
Will the Energy Sector Evolve or Devolve?
The energy sector is beginning to adapt to the realities of climate change. Who is best positioned for the future?
GMO 7-Year Asset Class Forecast: January 2021
The GMO Asset Allocation Team has released its latest 7-Year Asset Class Forecasts through January 2021.
The Runway Toward Higher Treasury Yields Looks Free and Clear
The obstacles to higher yields in the world’s biggest debt market are slowly melting away.
World Markets Update: February 22, 2021
All eight indexes on our world watch list posted gains through February 8, 2021. The top performer is Hong Kong's Hang Seng with a gain of 7.67%, India's BSE SENSEX is in second is with a gain of 7.53% and Tokyo's Nikkei 225 is in third with a gain of 7.08%. Coming in last is London's FTSE with a gain of 0.98%.
Vaccine Nationalism, Minimum Wage, Rising Energy Prices
Weighing the costs of global vaccine access, minimum wage and the energy rally.
Spectate or Speculate
Many investors think there are only two options in a market where participants have become overly exuberant, either 'I want in' or 'Get me out.' Our strategies are more nuanced, and we believe fit better with what we expect to transpire.
Small Change and The Depression of 1837-1843 – Part Five
That there was a price “bubble” that burst in the American political economy from 1835 to 1845 is beyond question. The challenge is to reconcile the data sets for commodity and securities prices, interest rates and production volumes with the narratives of what happened.
Is There Illiquidity in Equity Returns?
Liquidity is valuable to investors. Therefore, they should demand higher expected return (a risk premium) for less liquid stocks. But new research shows they have not earned that extra return in public equity markets.
Random Thoughts from the Frontline
Rather than going deep into one theme, this week we will do a “Random Thoughts” from the Frontline. Today we will cover several topics in shorter form: valuations, infrastructure, the debacle in Texas, and a lot more.
Texas Freezes, but a New Commodities Supercycle Could Be Heating Up
Millions of Texans were without power this week when the state was hit with a record setting winter storm. An overhaul of its aging infrastructure would require massive amounts of metals and other materials, which would be positive for miners and producers.
How COVID-19 Vaccines and Brexit Create the Trade of the 2020s
In late 2020, a new kid emerged on the bargain-of-the-decade block. UK stocks, and notably UK value, reached very cheap levels relative to value stocks in other developed economies. Today, UK value remains at remarkably low valuations relative to most of its fundamentals.
Emerging From The Shadows
A strong economic rebound is expected towards the middle of the year, followed by a return to more normal growth in 2022.
The Great Stock Rally of 2021 Seen Powering Ahead in Europe
A vaccine-fueled economic recovery and investors’ surging appetite for risk mean that the European equity rally can keep going in 2021, according to strategists.A vaccine-fueled economic recovery and investors’ surging appetite for risk mean that the European equity rally can keep going in 2021, according to strategists.
Fixed Income: Low Yields Don’t Tell the Whole Story
It’s tempting these days for some investors to question the role of fixed income in portfolios. After all, real yields have plunged, potentially leading to less income today and smaller capital gains tomorrow.
Year of the Ox: Bullish for China?
The Year of the Ox looks bullish for China with economists and analysts forecasting GDP growth of 8.1% and earnings growth of 18% for the MSCI China Index. But February holds key developments for China that could impact this outlook, including stock delistings, trade, and COVID-19.
The Inflation Outlook
For a variety of reasons, many investors are worried about higher inflation. While we may see reflation (a pickup in prices that were restrained due to the pandemic), a significant increase in underlying inflation appears unlikely.
What Vaccine Progress Means for Stock Markets
New virus variants are stoking COVID-19 angst, but we see vaccination programs opening the door to economic and market recoveries.
SATs, Once Hailed as Ivy League Equalizers, Fall From Favor
In this strange college admissions season, fewer high schoolers are turning in that dreaded number, their SAT score.
15 Explanations for the Bubble in Stock Prices
I offer 15 explanations for the bubble in stock prices and a single explanation for the one in bond prices. Those bubbles could deflate for any of 10 reasons I also identify, severely diminishing the retirement savings of baby boomers.
There’s Much More to Tech Investing than the US Market
Although US technology equities tend to dominate the conversation about technology investing, Franklin Equity Group’s John Remmert and Don Huber believe there are many innovative international technology companies that tend to get overlooked.
The World Will Pay More for Meat as Food Inflation Deepens
There are signs that the food inflation that’s gripped the world over the past year, raising prices of everything from shredded cheese to peanut butter, is about to get worse.
Surging U.S. Yields Show Stimulus Impact Still Getting Priced In
U.S. Treasury yields rose to the highest since February 2020 and are at risk of climbing further, as investors start to factor in the full economic impact of a stimulus plan totaling as much as $1.9 trillion.
EM Is No Longer a Commodity Play
The Emerging Markets (EM) asset class is often labelled a commodity play for investment purposes. The argument is simple and directional; EM countries export commodities, so rising commodity prices are good for the asset class, whereas falling commodity prices hurt EM countries.
Emerging Market Equities Set for Outperformance
Emerging market equities have historically provided investors with outsized returns but have also been the biggest decliners during global equity market pullbacks. For the last 10 years they have lagged the performance of US Equity markets by a considerable margin. But with attractive relative valuations, higher earnings growth forecasts, and underrepresentation in global portfolios, we believe they are set to reverse that trend and outperform US markets over the next 5-10 years.
The Green Transition: Implications of the European Recovery Plan
Despite questions over financing the European Union’s (EU’s) new Green Deal, the green transition is now under way.
Student Loan Forgiveness, Super-Sized Stimulus, China-Australia Trade Tensions
Are proposed fiscal policies and student debt forgiveness too much of a good thing?
Goldman’s Weaker Dollar Call Adds to Emerging-Market Fervor
Emerging-market investors seem to have a lot going for them right now -- and the renewed weakness in the U.S. dollar is adding to the bullish mood.
Taper Tantrum to VAR Shock: When the Next Bond Rout Is Coming
Cast a gaze across global bond markets and it’s a sea of calm. Yields are close to record lows, volatility is nowhere to be seen and central banks are still ploughing trillions of dollars into the economy to help foster a recovery.
The Case for Emerging Markets
With U.S. equity valuations very rich by historical standards, many – including Jeremy Grantham, Rob Arnott and Vanguard – are predicting emerging markets to excel. I’ll examine the case and give my thoughts on how to invest in emerging markets.
Overstimulation Risk
If, however, the pandemic continues into summer, it will mean the Gripping Hand is still squeezing us. Employment won’t recover and more small businesses will fail. This relief package, as large as it is, may prove necessary and maybe even too small.
The Chinese Economy Charges Ahead in the Year of the Ox
Happy Year of the Ox! Today China and a number of other Asian countries celebrate the Lunar New Year, also known as the Spring Festival.
Reports of Value's Death May Be Greatly Exaggerated
Rob Arnott: “There hasn’t been a better time to be a value investor at any other time in my career. I look back at the tech bubble and I never thought I would see valuations stretched the way they were then. We're back to that, and then some." We invite you to revisit “Reports of Value’s Death Have Been Greatly Exaggerated” now published in the Financial Analysts Journal.
Schwab Market Perspective: Disconnection
Hope is high that economic growth will accelerate as more people are vaccinated against COVID-19, but so far economic data has been lackluster. Meanwhile, bond investors are expecting inflation despite signs that the economic recovery’s momentum may be stalling. Why does everything seem so disconnected?
Two-Year Treasury Yields Briefly Breach 0.1%, Marking Record Low
Yields on two-year Treasury yields briefly printed a record low under 0.1% on Thursday as cash trading got underway in London after a holiday in Asia.
Global Equities: Four Things We Are Watching in 2021
Stephen Dover, our Chief Market Strategist and Head of Franklin Templeton Investment Institute, shares four investment themes he’s thinking about as the world recovers from the COVID-19 pandemic.
Surprise! Factor Betas Don’t Deliver Factor Alphas
By buying or overweighting characteristics-based factor exposure and selling or underweighting beta-based factor exposure, investors can position their portfolios to reap the rewards of factor investing while bearing less risk.
Coleman Leads $23 Billion Payday for 15 Hedge Fund Earners
It’s more than enough money, at going prices, to buy one GameStop, two AMC Entertainments and four Bed Bath & Beyond's.
Investment Strategies for a Booster-Shot Recovery
Our Fixed Income CIO Sonal Desai shares her investment views and strategies for the post-pandemic recovery. She explains why inflation looks likely to gain steam, and how the balance of fundamentals and valuations become especially crucial today when looking for attractive returns in fixed income.
What’s the Value of a Dollar?
Rick Rieder and team think that today’s potent policy cocktail holds important implications for the path of economic growth, markets and the value of a dollar.
College Success by Cutting Costs
The idea is to cut college costs by having an open mind and being willing to make some personal sacrifices.
Dire Bond Returns Have 60/40 Managers Juicing Portfolios With FX
It was a dinner conversation with former Federal Reserve Chairman Ben Bernanke in early 2020 that convinced Cesar Perez Ruiz that the golden age of bond investing was over.
Inflation Concerns, Italy's Battered Economy, Low Rental Demand
Any surge in inflation will likely not last for long, but Italy's economic troubles and the shift in rental markets may endure.
Small Change and The Depression of 1837-1843 – Part Four
For the 1830s, as for the 1990s, the great change would come not in the technology of delivery systems but in the extraordinary increases in the volumes of news and financial information being delivered because of the dramatic reduction in the cost of reproducing each item of news.
Will Demographic Trends Drive Higher Inflation and Interest Rates?
Powerful demographic trends will cause higher inflation and interest rates, and a reduction in inequality as labor reclaims its bargaining power in the global economy.
Could $1,400 Stimulus Checks Lift Air Travel Demand?
It’s hoped that an extra $1,400 in the pockets of everyday Americans may help support lagging U.S. consumption. We believe the stimulus, along with improved vaccine roll out, may also help support commercial air travel.
Controlling the Curve
Today I want to discuss an arcane-sounding but incredibly important term you need to know: Yield Curve Control. Several central banks are already using it and I see a strong possibility the Fed will join them. But first we must again consider the Gripping Hand.
Weekly Market Snapshot
With the previous week’s short-squeeze headlines behind us, investors remained optimistic about a fiscal support package, which passed the Senate by a vote of 51-50, with Vice President Harris breaking the tie.
Q4 2020 CIO Review & Outlook
CIO Robert Horrocks, reviews a topsy-turvy 2020 and shares the reasons for his relative optimism for Asia and the emerging markets in 2021.
The Perils of an Uneven Global Recovery
Heightened global economic risks mean that many poorer countries could take years to return to their pre-pandemic growth trajectories. And if higher inflation leads the US Federal Reserve to raise rates somewhat sooner than it currently plans, emerging markets will be hit particularly hard.
5 Reasons Airline Stocks Could Be a Buy in 2021
Commercial aviation still has some challenging times ahead of it, but I believe the worst is behind us, meaning now may be an opportune time to get exposure.
Bond Traders Struggle to Pick Winners in Riskiest Markets
Discerning investors could eke more gains out of developing-nation bonds, but the bulk of the rally in the riskiest corners of the market may have passed.
Still Resilient
Despite a pandemic, tariffs and superpower political tensions, the resilience of the Chinese economy was clear in 2020. In this issue of Sinology, we highlight five macro trends from 2020 that investors should watch this year.
The Future of Emerging Markets & The Coming Digital Generation
Kevin Carter, the Founder & CIO of The Emerging Markets Internet & Ecommerce ETF (NYSE:EMQQ) will be covering the impacts of the Chinese delisting developments, the rumored Alibaba antitrust laws, and how Gen-Z will drive the next leg of digital transformation for the developing world. Kevin has worked alongside Princeton Economist Dr Burton Malkiel for over two decades focused on China/Emerging Markets that’s culminated in the creation of EMQQ and the best overall performing EM Index for the 1yr, 3yr, and 5yr periods according to ETFdb.
Beware the Shocks in the Road
Massive growth in central bank balance sheets via quantitative easing, debt monetization, and firing of “big bazooka” stimulus packages brings renewed focus to potential shocks in the business cycle. An awareness of the macroeconomic “shocks” and their impact on asset prices should be incorporated in investors’ tactical asset-allocation decisions.
Your Portfolio May Be Less Diversified Than You Think
When investors talk about “the stock market” they are most often referring to an index that tracks stocks only in their home country. This “home bias” is evident when it comes to the make-up of investors’ stock portfolios. Investors around the world tend to hold mostly domestic stocks.
Volatility Spikes; First Monthly S&P 500 Loss Since October
February begins with a stack of important economic scorecards. Among them are the last of the fourth-quarter corporate earnings reports, last week’s assessment of the 2020 gross domestic product (GDP), unemployment figures, consumer spending, as well as all the other regular reports that give us a snapshot of our recent economic history.
Asia’s Corporate Earnings May Surprise on the Upside
Corporate earnings are likely to be strong in 2021, reflecting strong consumer demand and resilient cash flows.
Why Oil Companies’ Fall From Favor Could Cause Next Price Spike
Nobody loves oil companies. Tesla Inc., the emblem of an emissions-free future, is worth more today than the top five Western supermajors combined.
Will Brexit Lead to Bruin? - The Cost of Absurdity
The UK-EU trade agreement entered into just before Christmas is a 1,200-page monster which contains far more cons than pros for the British economy despite Boris Johnson doing his very best to convince the British public of the opposite. In this month’s Absolute Return Letter, you can see why.
Venerated Voices™ 2020 Rankings
Advisor Perspectives, the most-read eNewsletter for financial advisors as ranked by the Erdos & Morgan “FAMOUS” Study in 2019 and 2020, has announced its Venerated Voices™ awards for commentaries published in 2020.
Emerging Market Debt Problems, Fed Exploring Climate Change, Bitcoin Skepticism
Emerging markets seek a sustainable solution to debts, and the Fed takes a step toward sustainability.
Small Change and The Depression of 1837-1843 - Part Three
The purpose of the Constitutional gold standard was to establish a reference point against which the prices of credits and commodities were set by the open exchange of bank notes and other promises to pay money.
The Fed, Zombies, & The Pathway To Japanification
The Fed recognizes their ongoing monetary interventions have created financial risks in terms of asset bubbles. They are also aware that most policy tools are likely ineffective at mitigating financial risks in the future. Such leaves them being dependent on expanding their balance sheet as their primary weapon.
Power to the Players: Reddit, Robinhood and Bitcoin
Those of you with kids and grandkids may at some point have stepped inside a GameStop. If so, you might be familiar with the video game retailer’s tagline: “Power to the players.”
Inflation and Broken Windows
I’m often asked if I foresee inflation or deflation. Both are possible in their own ways, and frankly I feel a little funny telling people I think we will see both. I would just like to have a growing economy and dependable money that holds its value.
How Shopping—and Investing—Might Be Enabling Modern Slavery
It may seem shocking, but a simple trip to the local store to pick up fresh produce or clothing could enable human exploitation. For investors, those same connections can exist within their portfolios—and it takes more than a passive effort to root them out.
The Filibuster and the 2021 Legislative Agenda
A majority of the Senate (including two Democrats) has agreed to forego efforts to eliminate the filibuster during the Congressional term ending December 2022.
Some Worries May Be Inflated
Inflation will likely heat up in the coming months, but not to worrying levels.
Precious Metals Outlook 2021: Renewable Energy Will Be a Key Driver
Precious metals in general did very well in 2020, and I expect them to keep pace in 2021, supported by heightened efforts in the U.S. and elsewhere to transition from fossil fuels to renewable energy.
China’s Uneven Equity Rally Opens New Roads to Recovery
As China begins the year of the Ox, many investors are wondering whether another bull run is possible in 2021. Given that last year’s rally was extremely narrow, we believe many parts of the market still offer pent-up recovery potential.
Grantham Warns of Biden Stimulus Further Inflating Epic Bubble
In the waning days of Donald Trump’s presidency, Jeremy Grantham warned that U.S. stocks were in an epic bubble. He now predicts Joe Biden’s economic-recovery plan will propel them to perilous new heights, followed by an inevitable crash.
Small Change and the Depression of 1837-1843 - Part Two
By the end of the first decade of the 19th century, everyone in the U.S. was accepting denominations printed on paper by banks as payments in dollars. Americans had invented retail credit banking and discovered how much they liked it.