Perspectives Blog

Are financial markets priced for secular stagnation?

Columbia Management, Investment Team | December 15, 2014

…ility of central bank rate rises and associated economic recovery was incrementally priced out. Corporate credit markets saw spreads tighten as the reach for yield spread from the JGB market. Plus, with no monetary policy uncertainty and the Japanese economy functioning like a company in solvent run-off, defaults stayed low. Equity markets crashed, crashed and crashed again, periodically rallying 40% before giving all this and more back as the he…

2015 Outlook — Same song, slightly different arrangement

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | December 15, 2014

…delivered more return than expected. Global stocks, on the other hand, delivered less than expected. Exhibit 2: Equity returns lagged the change in corporate earnings Exhibit 2 breaks down global equity returns into the portion attributed to corporate earnings growth and the portion attributed to changes in the price/earnings (P/E) multiple (the multiple of earnings that investors have paid for equities). For 2014, returns for the MSCI All Coun…

How will the Volcker rule impact capital markets?

Richard Manuel, CFA, Senior Analyst | January 6, 2014

…re was great consternation in the industry – warnings that it would impair the proper functioning of our capital markets and produce an uneven playing field for U.S. firms, making them less competitive in global markets. With the final rule out, though some uncertainty remains, it seems that tragedy was averted and that our capital markets will continue to thrive. There has been considerable debate as to the role proprietary (“prop”) trading play…

Not all emerging markets are created equal

Robert McConnaughey, Director of Global Research | January 27, 2014

We see emerging markets shifting from an environment of common thematic tailwinds to one of more idiosyncratic outcomes We believe that painting all emerging markets with a broad brush is a mistake We examine some of the key factors in uncovering EM investment opportunities Emerging markets (EM) is a term given to a universe of countries that is extremely diverse across a wide number of variables including geography, levels of industrializatio…

Comments on the effect on global markets from the Ukraine crisis

Mark Burgess, Chief Investment Officer, Threadneedle Investments | March 12, 2014

…ange. We therefore do not expect major sanctions against the country. Elsewhere, investment grade and high yield markets have been unmoved by the crisis in Ukraine. Foreign exchange markets, outside of the obvious areas such as the rouble, have also ignored it. Developed market equity and bond markets have recently been driven by other factors such as the headwinds from a stronger pound for the UK equities, the severe weather in the U.S. and the…

October — It always seems to happen in October!

Ted Truscott, CEO, Global Asset Management | October 20, 2014

…y too quickly.”* Welcome to October, a month that more often than not seems to bring out the worst in financial markets. After a remarkable period of calm, low interest rates and more than five years of rising markets, the last few weeks have certainly been nauseating. What’s behind all of this and why are markets reacting now? 1)  As the quote above suggests, worldwide growth has surprised on the downside. However, there is an even darker side…

Emerging Markets: Waiting on exports

Anwiti Bahuguna, Ph.D., Senior Portfolio Manager | March 31, 2014

…s have remained sluggish for the past three years due in part to the subpar nature of global growth. As emerging markets struggle to overcome the challenges to their growth story, the EM landscape will likely face significant challenges ahead. Equity markets in the developed world did very well in 2013 while the picture was far more mixed in the developing world. So far this year emerging market (EM) stocks have not just trailed developed market…