Perspectives Blog

India’s new government fires investor enthusiasm

Natasha Ebtehadj, Fund Manager, Threadneedle International Limited | September 8, 2014

nlikely to fall further; any pick up will potentially drive future growth Sources: Central Statistics Office, Nomura, July 2014. Data also points to a recovery in the fiscal year beginning in March 2015. Capital and consumer spending are starting to revive and we expect to see earnings results improve. Margins and returns are at 10-year lows with potential for upside as revenue growth strengthens, spare capacity is used and returns trend back to…

Apparel retail doldrums

Mari Shor, Senior Equity Analyst | August 11, 2014

Since 2011, consumer spending has been below average overall, and spending on retail apparel has been especially poor. A host of factors, from shifting consumer priorities to poor inventory control have forced apparel retailers to compete on price, and sales and profitability have suffered dramatically. Premier global brands with differentiated product and strong, flexible supply chains are best positioned to manage through this challenging env…

Defense industry outlook – Looking past the headlines

Ben Blomberg, Senior Equity Analyst | March 17, 2014

The outlook for U.S. defense contractors has been improving despite all the negative headlines. Army spending is under pressure, but Navy and Air Force spending remain well supported. The recent Ryan-Murray deal is a substantial positive, with a more predictable DoD outlook. Defense investors have had their share of bad news around the trajectory of defense spending, starting with the Budget Control Act of 2011, followed by the failure of the…

More light, less tunnel

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | October 31, 2013

After a data vacuum of almost three weeks, government agencies have started to gear up again with key reports; unfortunately, they present a picture of economic activity in the third quarter that ended on a soft note. While the third quarter is typically the weakest in a given year, the current trend in employment is disappointing. It appears the elusive turn in capital spending will await 2014 and then see only a modest build at some point nex…

A tepid cyclical lift

Tom West, Director of Equity Research | April 28, 2014

Cyclical investment and discretionary spending are on track to deliver earnings growth of 7% in the S&P 500. Strength in some consumer durables appears more of a “wallet share” gain than a general lift due to recovering wages or a release of excess savings. Construction and energy are poised for another year of growth, while “enterprise” spending and investment in the tech sector remain challenged. The S&P 500 Index should grow earning…

How bad is China’s credit crisis?

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

…ssue ultimately requires fundamental change in the China financial system. While the government has announced and begun to 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 transpar…

Credit alternatives in government-backed debt

Columbia Management, Investment Team | June 23, 2014

One way investors may boost yields without taking on undue credit risk is through U.S. government agency debt. While many investors associate U.S. agency debt with very low yields, other types of agency debt can offer significant spreads to Treasuries with a modest decline in liquidity. We have been increasing our allocation to the agency market in core portfolios as a way to reduce credit risk while maintaining competitive yields. By Carl W….