Perspectives Blog

Quality milestone in the European recovery story

March 17, 2014

…ric Jeanmaire, Fund Manager, Threadneedle Investments After 18 consecutive negative months, the flow of eurozone bank loans into the private sector finally turned positive in January. This marks a milestone on the path towards Europe’s economic recovery. The turning point in the continent’s fortunes was July 2012 when European Central Bank (ECB) President Mario Draghi gave his “we will do whatever it takes” speech in support of the euro. Since th…

U.S. rates – Forward guidance taxonomy

Zach Pandl, Portfolio Manager and Strategist | March 17, 2014

…en the Fed’s forward guidance for 2014, and that for 2015 and beyond. The styles of forward guidance provided by central banks differ along two main dimensions: (1) the degree of commitment and (2) the motivation for providing guidance in the first place. Both aspects can affect credibility, and therefore the importance of these statements for markets. Forward guidance can take the form of an explicit commitment or a forecast. Central banks never…

In the land of 7 footers, 6’8″ plays guard

Fred Copper, Senior Portfolio Manager | May 5, 2014

…buying stocks after six years of sharp gains. This risk taking behavior is an intentional and essential part of central bank policy. Post credit crisis, all sectors of the economy wanted to de-lever their balance sheets at the same time. If no one is willing to invest or spend, economic activity halts. So central bank policy is geared toward rewarding borrowing (presumably to spend/invest) and penalizing saving. If pushing investors farther out…

What investors should know about Fed forward guidance

Zach Pandl, Portfolio Manager and Strategist | March 24, 2014

…en the Fed’s forward guidance for 2014, and that for 2015 and beyond. The styles of forward guidance provided by central banks differ along two main dimensions: (1) the degree of commitment and (2) the motivation for providing guidance in the first place. Both aspects can affect credibility, and therefore the importance of these statements for markets. Forward guidance can take the form of an explicit commitment or a forecast. Central banks never…

A less certain world favors high-quality stocks

Philip Dicken, Head of European Equities, Threadneedle International Ltd | October 6, 2014

…ct, then full QE may be unlikely for this year, although any further weakness will increase the pressure for the European Central Bank (ECB) to act. Exhibit 1: European sentiment indicators: turning down, but not in recessionary territory Source: Threadneedle, September 2014. Recent ECB policy action has highlighted the central bank’s commitment to anchoring inflation expectations. In early September, the ECB cut its main interest rate by 10 bas…

Asset allocation: Q4 equity strategy

Columbia Management Global Asset Allocation Team, | October 27, 2014

…rebuilding an equity overweight, primarily using U.S. large-cap stocks. While the Fed heads toward the exit, the European Central Bank is planning to provide further monetary easing and the Bank of Japan is continuing to expand its balance sheet. We are neutral on the eurozone, overweight Japan, neutral on overall EM equities favoring Asia over Latin America and maintaining a small overweight to EMEA. In August, we cut our recommended equity wei…

2015 Outlook — Same song, slightly different arrangement

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

…the globe has become desynchronized, with the U.S. Federal Reserve (the Fed) contemplating rate hikes, while the European Central Bank (ECB) and the Bank of Japan (BOJ) intensify their monetary stimulus programs. In this article, I will detail the implications of these conditions for investment strategy. In our view, while equities will most likely continue to dominate, the complex interactions of today’s conditions elevate the role of dynamic r…