Perspectives Blog

Rebalancing the U.S. economy

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

arely changed (essentially no growth) after adjusting for inflation and taxes. This area has failed to rebalance and remains challenged, particularly as businesses assess staffing and planned costs of the ACA (Obamacare). The global growth story as well appears a mix—capital flows are rebalancing and demand drivers are few with lots of excess supply putting downward pressure on inflation. Investors should note that this rebalance to better growth…

Income inequality, disinflation and profit growth – the role of globalization

March 10, 2014

Income inequality has tended to rise in both developed and EM. Companies look across the globe to determine where they can manufacture their products at the lowest risk-adjusted cost. We believe that the global unit labor cost arbitrage is likely to continue for many decades. By Marie Schofield, Chief Economist and Toby Nangle, Head of Multi Asset Allocation Last week we discussed rising income inequality in developed markets and the degree to…

The U.S. economy — a gain in GDP?

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | May 2, 2013

…ich has contracted in 10 of the last 11 quarters. Net exports were also a drag as imports (a negative for the GDP accounts) grew at a faster pace than exports—the latter likely hurt by the strong U.S. dollar and the spreading global slowdown. Fixed investment increased 4%, as residential investment (housing) grew 12% in Q1. This has been rising between 10% and 15% seasonally adjusted annualized rate (saar) for the last few quarters. Housing remai…

Slow growth: Why is it here and will it stay?

February 24, 2014

…s may be undergoing a long period of slow growth has been attracting an increasing amount of attention. While primarily a developed market phenomenon, this should have more than a passing interest for all investors. True, the global financial crisis unleashed particularly strong deflationary forces, but the drivers of slower growth and lower inflation have largely been in place for some time. Some point to growing income inequality, while others…

When the QE tide recedes, focus on what is revealed

Robert McConnaughey, Director of Global Research | January 6, 2014

Monetary stimulus from central banks can no longer be counted on to lift asset prices For 2014 we see a market with lower cross-correlations and more divergent investment outcomes Finding alpha opportunities requires in-depth global research to take advantage of market inefficiencies While there is fierce debate on the ultimate effectiveness of monetary stimulus surging from the central banks, one cannot dispute the boost that it has given to…

Signs point to an improving U.S. economy

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | December 9, 2013

Data shows economy is improving Job growth is continuing GDP is not as good as the report would make you think The first week in December was a data goldmine for anyone hoping for news that the economy maintained momentum through the early autumn government distortions. The payroll report continued to post moderate and steady payroll gains consistent with a sustained improvement in labor markets. The interruption from the government shutdown i…

Emerging Markets: Waiting on exports

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

Exports by emerging market economies are the most important factor in explaining long-term growth. EM exports 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 mixe…