Perspectives Blog

India’s new government fires investor enthusiasm

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

…consumption with household penetration of many goods remaining low and giving huge scope for increased consumer spending; the potential for a big increase in infrastructure spending, which can ease structural bottlenecks; India’s democratic tradition encourages greater transparency and accountability than is seen in some other Asian countries. Investment ideas As the new government begins to put its stamp on policy, it will create investment opp…

Apparel retail doldrums

Mari Shor, Senior Equity Analyst | August 11, 2014

…extremely “picky” and continue to focus their spending in certain categories. For the past three to four years, spending on durable goods has outpaced spending on non-durables, including apparel (Exhibit 1). Relative strength in durable goods, including autos and home-related items, likely reflects post-recession catch-up spending and investment in home-related assets supported by strong housing fundamentals and government infrastructure spend….

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…

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

…ilar products. Fixing this issue 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 balanc…

Credit alternatives in government-backed debt

Columbia Management, Investment Team | June 23, 2014

…ched a historically low level. One way investors may boost yields without taking on undue credit risk is through government agency debt, which fills a niche in the market between high-quality spread product and low-risk Treasury securities. Through explicit or implicit guarantees, timely principal and/or interest on agency debt ultimately may be backed by the U.S. government. Many investors associate U.S. agency debt with very low yields; indeed,…

Half-time report on the U.S. consumer

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | July 28, 2014

…s. With consumers using credit cards less and using debit cards much more, the supports for higher discretionary spending are keyed off income and wages and also employment. With low debt use and income growth holding back consumption and demand, households will require stronger job growth and real wage gains to accelerate their spending. Households have made enormous progress in the past few years with the ongoing repair of balance sheets, grud…