Perspectives Blog

Interest rates in a highly indebted economy

Zach Pandl, Portfolio Manager and Strategist | October 13, 2014

…rates rise along forward path Another way to look at the deleveraging constraint is through the lens of private sector debt dynamics—a framework more often applied to government finances. Changes in debt ratios are a function of three variables: (1) average effective interest rates, (2) nominal income or GDP growth and (3) the savings rate (or in public sector terms, the budget balance; in either case, excluding interest payments). We again show…

Thoughts on navigating market volatility in today’s technology markets

Rahul Narang, Senior Portfolio Manager | April 28, 2014

…o the continued move towards e-commerce • Pivot of business models towards mobile • Growth in the China Internet sector • Industry consolidation • Content providers with growing abilities to monetize across new mediums So, within this approach, how do we respond to the recent painful move down in certain sectors of the technology space? In particular, cloud software stocks have borne the biggest brunt of the sell-off with many stocks down 40% ove…

How bad is China’s credit crisis?

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

…il 2013 San Francisco Fed paper “Shadow banking in China: Expanding Scale, Evolving Structure”) • China’s trusts sector consists of 60 or so trust companies, which are largely owned by agencies of the states. That means the government still has a tight grip of the sector. • Total trust assets are estimated to be Rmb (US$10 trillion), only about 7% of total banking sector assets. Another shadow banking product is wealth management products issued…

Biotech’s beneficiaries: How outsourcing is improving the sector and spreading the wealth

Aaron Reames, Senior Equity Analyst | February 24, 2014

…quarters. Outsourcing offers biotech firms varied advantages, from cost reduction to enhancing credibility. The sector’s success and the outsourcing trend is fueling ancillary businesses, notably specialty REITs, CROs and research tools companies. As biotech indices continue to surpass all-time highs, one must contemplate if there is additional room to run. We continue to believe the sector will outperform the broader markets for at least a few…

Oil and the high yield market

Columbia Management, Investment Team | December 8, 2014

…Portfolio Manager and Head of High Yield and Mark Van Holland, CFA, Senior Portfolio Manager  Size of the Energy Sector Because the energy sector is a large component of the U.S. high yield market relative to some other asset classes, the market has received increased scrutiny due to recent declines in oil prices. Prior to the recent sell off, energy accounted for more than 15% of the high yield market, making it by far the largest industry (heal…

Detroit and Stockton are game changers for municipalities in fiscal distress

Columbia Management Municipal Investment Team, | December 22, 2014

…gacy costs. Unlike a corporation, a municipality and its elected leaders are responsible for providing essential public services, such as education, transportation and public safety. Therefore, a municipality has the responsibility to maintain the desirability of its tax base to residents and businesses by providing quality and reliable public services. Municipal bankruptcy undermines the ability of a municipality to provide some of the most basi…

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…