Perspectives Blog

What’s behind the weakness in U.S. housing?

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | March 24, 2014

…er will improve, the latter conditions will not. There is some evidence of a two-tiered market as well, with most of the slowing seen in the single-family sector against a firmer multi-family segment, particularly in new home construction. Over the last year there has been a marked slowing in single-family permits and single-family starts across all regions, not just those areas suffering through a miserable winter. The reduced pace of constructi…

Snow job!

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | January 13, 2014

…, but the majority came from retail (+55k) and temp help (+40k), areas noted for low wages. Outside of these two sectors, payroll counts were weaker across a broad number of industries—either smaller gains or outright losses. Construction shed 16k jobs while information/telecom shed 12k. Professional and business services added only 19k, despite the strong rise in temp hiring, due to a 25k decline in accounting and bookkeeping services. The publi…

Rebalancing the U.S. economy

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | January 13, 2014

…e capital, not return it to shareholders in the form of dividends. This capital deepening can begin to close the output gap and is probably what the markets are counting on. We are beginning to see some lift in private sector construction spending on offices, commercial space and manufacturing plants (see chart 2). Private sector construction Source: Census Bureau, November 2013   Consumers (70% of growth) appear a bit hamstrung. Spending h…

How bad is China’s credit crisis?

Weili Jasmine Huang, Senior Portfolio Manager | February 3, 2014

…o implement some reforms, there will be no easy or immediate fix. Reform efforts to fundamentally adjust spending responsibility between central and local government (allowing private capital to invest in urban infrastructure construction, allowing bond issuance and setting up local government balance sheets to improve transparency) will help resolve many of the issues surrounding LGFVs. Nevertheless, a sense of urgency regarding reform implement…

Does Japan’s sell-off present buying opportunities?

Daisuke Nomoto, Senior Portfolio Manager | February 10, 2014

…he third arrow particularly: i) corporate tax cuts; ii) granting a Special Economic Zone license to Tokyo, Osaka, Nagoya, Hokkaido and/or Okinawa; and iii) labor reform to ease working visa issuance to foreign workers for the construction and medical industries, raise female labor participation rate, etc. Since the market expectation of Abe’s growth strategy is somewhat low at the moment, any clarity about it could positively surprise the market….

Steady as she goes

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | April 7, 2014

…ay have been due to weather, but I would point to payback from the inventory swing. Gains were at or slightly above trend in professional/business services with about half from temporary jobs. Solid gains were seen in retail, construction, and healthcare. Leisure and hospitality was a little light, with restaurant hiring strong—indicative of a pickup in part-time jobs. Public sector continues to be a drag with cuts at both federal and state &…

The case for active muni management

Kimberly Campbell, Senior Portfolio Manager | April 21, 2014

…stment process has withstood the test of different market cycles. In stark contrast to a passive approach, an active investment manager will consider the overall investment and political environment when determining portfolio construction and strategy. Active managers define their strategy by managing the fund’s exposures, or “risk budget,” through the fund’s internal attributes such as yield curve positioning, issuer selection, quality, sector,…