Energy

Portfolio managers Taizo Ishida and Michael Oh, CFA, explore the growth drivers for Asia's new economy sectors, including how to measure and assign potential future value of intangible assets.

Emerging markets overall felt a dose of optimism in August amid hopes for a COVID-19 vaccine, continued easy monetary policy globally and improving economic data pointing toward recovery. Our emerging markets equity team breaks down the key trends, news and events it has an eye on, and shares its latest market outlook.

Seven reasons Americans are “nowhere near as alienated from their democratic system” as Germans in the 1920s.

We hear numerous market strategists talk about stocks which are going up because “there is no alternative” to owning them. In the Wall Street vernacular, this goes by the phrase TINA.

Supply is getting tight. Helium is notoriously difficult and expensive to store, for the very good reason that it escapes every known container over time.

This commentary has been updated to include this morning's release of Nonfarm Employment. August's 1.37M increase in total nonfarm payrolls had revisions that resulted in 39K fewer jobs than previously reported. The Investing.com consensus was for 1.4M jobs gained and the unemployment rate to decrease to 9.8%.

Why there’s still value in a value allocation.

As of August 31, the 10-year note is 20 basis points above its historic closing low of 0.52%, reached on August 4.

Many investors are looking for emerging signs of a return to normalcy from the coronavirus crisis. While there are many indicators to choose from, we’ve assembled a group of signals, with the help of big data, that may point the way.

Asset managers and others are furious over a proposed DOL rule that they say is based on a flawed and unsupported assumption that ESG funds give up financial returns in favor of “non-pecuniary” rewards.

In a new quarterly letter to GMO clients, head of asset allocation Ben Inker highlights the sea change in the utility of government bonds and Matt Kadnar, member of GMO’s Asset Allocation team, weighs in on today’s low bond yields.

Key Takeaways

• Worst quarter of growth may be followed by the best
• More records in store for the equity market
• Highs and lows for oil while gold soars on uncertainty

The Fed updated its monetary policy framework, moving to a flexible average inflation target. That means that the central bank will target an average inflation rate of 2% (as measured by the PCE Price Index) over time.

It’s a tale of two bull markets. One part of the market is trading as you would expect with near depressionary economic numbers. The only description for the other part is “insane.”

The Federal Reserve just tweaked how it thinks about inflation, and this could have a huge impact on gold and gold mining stocks. But Fed Chair Jerome Powell’s speech raises the question yet again if we’re even measuring inflation accurately in the U.S.

With cyclical stocks rebounding, portfolio manager Russ Koesterich emphasizes that being discerning is key.

During the coronavirus downturn and rebound, US growth stocks outpaced value stocks by a record margin. Now growth stocks seem expensive, but that depends on how you look at it.

Personal Income (excluding Transfer Receipts) in July rose 1.03% and is down 1.7% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, Real Personal Income (excluding Transfer Receipts) MoM was up 0.71%. The real number is down 2.7% year-over-year.

With multiple future scenarios as to how climate change may play out, there are also multiple potential consequences in store for investments. This post takes a detailed look at climate-change risk management.

This week, we continue with a bullish tilt toward equity positioning as the SPDR S&P 500 ETF (SPY) and the QQQ Trust (QQQ) trade at new all-time highs.

Since the inflation cocktail is closely related to value stock outperformance, we are very excited about our future value investing possibilities.

In the minutes of the July 28-29 FOMC meeting, participants expected no change in policy rates anytime soon, but officials saw a need for more clarity regarding the likely path, such as adopting output-based forward guidance.

The number of Americans filing for initial jobless claims this week spiked above 1 million, while the number of deaths attributed to COVID-19 remains above 1,000 a day. But there was much else to celebrate.

Berkshire unexpectedly announced that, as of the end of the second quarter, it held a $565 million position in Barrick Gold, the world’s second largest producer of the metal.

Emerging countries have been in the midst of a crisis that is not of their own making. A great majority of these countries are navigating the crisis fairly well.

Research Affiliates discusses the increase in portfolio tactical shifts and recent research efforts supporting the All Asset strategies in today’s evolving investment environment.

Initial claims for unemployment benefits fell below one million for the first time since mid-March (20 weeks). However, unadjusted claims had already dipped below that level a week earlier. Unadjusted claims totaled 831,000.

Following decades of investment and cost reduction, electricity from renewable energy should be cheaper than most existing fossil- and nuclear-fueled electricity within the next three-to-five years. We believe selectively investing in operators with scale and cost advantages in this sector should be rewarding given the increasing demand for clean energy.

The overall economic outlook depends on the virus, efforts to contain it, and the degree of fiscal support. We’ve had a sharp- but-partial rebound in May and June, following a steep decline in March and April. The pace of improvement is expected to moderate. The impact of the pandemic has not been felt evenly.

The price of gold had its first down week since early June, ending a spectacular nine-week rally. The yellow metal briefly fell below $1,900 an ounce on Wednesday as stocks neared their all-time closing high and the 10-year Treasury yield jumped on record supply.

There are five evolving growth themes that could generate considerable economic value over the next five to 10 years.

By now you’ve all heard the news. Joe Biden, the Democrats’ presumptive nominee for president, has selected as his running mate Kamala Harris, junior senator from California and the state’s former attorney general.

Many investors seem to have misperceptions when it comes to Russia’s economy and the companies located there. Our Emerging Markets Equity Institutional Portfolio Manager Nicole Vettise explains how Russia’s economy offers investors a mix of old and new industries, and compelling areas of investment opportunity as a result.

Many investors are looking for emerging signs of a return to normalcy from the coronavirus crisis. While there are many indicators to choose from, we’ve assembled a group of signals, with the help of big data, that may point the way.

Some emerging markets have been coping with the COVID-19 crisis better than others, and their economies are in different stages of recovery. Our emerging markets equity team highlights a few—and offers thoughts on why the pandemic has accelerated some existing fundamental and technological trends.

We have a big economic calendar with reports on inflation, small business optimism, retail sales, consumer confidence, and unemployment claims. I expect the data to continue occupation of the back seat.

For the week, airlines stocks increased 9 percent, its best weekly performance since early June. Wheels up!

Russian stocks, as measured by the MOEX Russia Index, turned positive for the year on Tuesday of this week after plunging 30 percent due to the pandemic. This puts them slightly behind the S&P 500...

The 30 most economically damaged industry categories could be de-listed before tomorrow’s market open, and it would hardly shave more than a few percentage points off the S&P 500.

In the time since COVID-19 hit the economy and stock market, there has been three phases. First, the question was ‘when’ will the economy return to pre-COVID normal? Next came ‘sooner or later’? Recently, we have moved to ‘will the economy ever come back’? For long-duration investors like us, what are the investment implications in where we are now in a U.S. stock market with many securities priced for ‘never’?

Loomis Sayles Portfolio Manager Ashish Chugh provides an update on emerging market equities and the impact COVID-19 has had on them recently.

Two companies in the metals and mining space I’m looking forward to hearing from are Ivanhoe Mines and Franco-Nevada. Both are scheduled to report next week.

How will our lives change during and after the pandemic? Let’s start with a look at education, medicine, automation, broadband access, city living and cash.

Big things have been brewing in Europe. The same continent that two years ago I said was going through “monetary drug withdrawal,” is now set to outpace US growth by a wide margin. And US growth, which had led the world for years, now looks likely to lag it.

The Federal Reserve wants financial conditions to remain accommodative as it looks to support the U.S. recovery.

Among the many significant developments in the world that investors should be considering as part of their long-term thinking, one of the issues that concerns me the most is China.

The Commerce Department will release its first estimate of second quarter Gross Domestic Product on Thursday of this week, and it is widely expected to be really bad due to the economic lockdown earlier this year. Most forecasters expect 2Q GDP to be down 30-50%, making it the worst quarterly downturn since the Great Depression.

US Investment-grade corporate bond issuance has rolled past US$1 trillion so far in 2020. What are the long-term effects of this explosive borrowing?

Ultimately, we believe that investors who are unaware of ESG and do not integrate ESG into their investment processes may be exposing themselves to additional, unnecessary and possibly unrewarded risks.

A large iShares ETF investing in companies with positive ESG characteristics has produced a total return this year more than three times the performance of the S&P 500.

With Monday's (7/20) intraday price action, the default Point and Figure chart of the S&P 500 Index (SPX) broke a spread quadruple top with a move to 3240 before moving higher to 3270 on Tuesday. This latest buy signal marks the third consecutive on the chart, confirming that demand is in control.

The Federal Open Market Committee (FOMC) is expected to leave monetary policy unchanged. Officials won’t release revised economic projections until the mid-September FOMC meeting, but Chair Powell will provide an assessment of current economic conditions in his post-meeting press conference.

We all know that past performance is no guarantee of future results, but you can see in the chart below that the white metal could possibly be setting up for another epic run-up. At this stage of the bull market, silver’s current price appreciation is ahead of any previous rally.

Investors must balance ongoing risks of the coronavirus against the extra yield the bonds provide.

Applying the definition of factor robustness that was established by our Research Affiliates colleagues in a 2016 award-winning paper, we determine ESG is not a factor. Nevertheless, the importance of ESG as an investing strategy is undeniable. We explore how greater clarity around defining ESG can quicken the pace of ESG integration in equity portfolios.

European governments have agreed to pour money into everything from electric cars to renewable energy and agriculture.

In March, the Loomis Sayles Global Fixed Income Team anticipated the economy could experience sluggish growth in the third quarter after a downturn in the second. Given the ongoing vagaries of quarantines and shutdowns, how has their growth outlook changed?

The pandemic had a significant impact on household spending in March and April, with a sharp contraction in consumer services (basically anything where people come into close contact with each other). The relaxation of social distancing guidelines has contributed to a sharp-but-partial rebound in May and June.

In emerging markets, some industries and countries are in better shape than others. And many businesses have the right qualities to benefit from structural changes now and long after local conditions improve.

Weeks before the S&P 500 bottomed, many millennial Robinhood investors began picking up coronavirus-impacted airline stocks. The buying spree continued even after Warren Buffett announced that he’d dumped his holdings.

Everyone who owned common stocks in the U.S. went through hell in the first quarter of this year. The 36% decline in the S&P 500 Index in February and March was the fastest 36% decline of my lifetime. This hell was especially damaging to those of us who have a positive view of the U.S. economy over the next ten years.

Rate of change and inflection points in economic data drive stocks; but in these unique times, the level of said data needs to be considered, too.

Markets continued to rise in June, as efforts to reopen state economies across the country continued throughout the month. Investors reacted to the continued reopening with optimism, driving the S&P 500 up 1.99 percent in June following a 4.76 percent increase in May.

Read Harold Evensky's latest newsletter.

U.S. industrial production in June posted the largest monthly gain since 1959, indicating manufacturing is stirring to life after coronavirus-related shutdowns.

In this week’s “Technically Speaking,” the “Golden Cross” arrives, but are the bulls safe? As noted two weeks ago, is the 50/200 dma crossover is historically bullish for equities. However, with markets facing one of the worst earnings declines on record, could overly exuberant investors be walking into a trap?

At LPL Research, we know the stock market is forward-looking: It focuses on what’s happening today and what it sees on the path ahead. Much of the real-time economic data we follow—such as transportation activity, home sales, and jobless claims—is showing tangible evidence that economic activity—while still depressed—has begun to make a comeback.

It identified 244 companies during the 2020 annual proxy season that weren’t doing enough to either prepare their businesses for a warming planet or inform investors about the climate-change risks.

Wells Fargo & Co. plummeted after reporting its first quarterly loss since 2008 as loan-loss provisions soared with the bank expecting a more severe downturn from the coronavirus pandemic.

Buffett changed his mind and bought a 10% stake in all four of the largest U.S. airlines. For a few years it seemed that he was finally right about the airlines.

Next time you see a client’s resolve to stay invested waver, ask them two questions…

The value of this year’s annual hedge fund performance survey was turned on its head when a pandemic shut down the global economy and sent securities plummeting. But a deeper look at consistently performing funds revealed managers that as a group have largely been able to weather the storm better than the market and their peers.

The economic calendar was thin. Investors remained concerned about rising cases of COVID-19. A return to a full lockdown appears unlikely, but the pace of improvement in the economy is expected to slow.

Precious metals were the big winners for the first six months of 2020. Spot gold took the first place position, rising over 17 percent, followed in second place by silver, up nearly 2 percent. Palladium rounded out the top three, essentially flat at negative 10 basis points.

Low yields plus rising defaults seemingly leave little ground for bond investors seeking safety or income—or both. But for investors who remain flexible, those objectives aren’t as distant as many think.