Perspectives Blog

Room to run

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | September 15, 2014

…ears. The question about the current business cycle’s longevity is relevant, considering peaks mark the start of recessions and turning points carry important implications for asset class performance. The National Bureau of Economic Research (NBER) has the final say on dating business cycles, but does so using a variety of measures and only with hindsight. For instance, the group announced in December 2008 that the last recession began on Decembe…

The coming divide in state credit quality

Ty Schoback, Senior Municipal Analyst | June 3, 2014

…presents a sample list. State sector credit quality is generally robust and has improved significantly since the recession. Where fiscal improvements have occurred amidst the recession and subsequent recovery, definitive action and fiscal fortitude have been at the forefront. Commonalities among fiscal leaders include a willingness to make difficult decisions to realign spending with recurring and reliable tax revenues, a history of full pension…

Steady as she goes

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | April 7, 2014

The March labor market report was solid, with the overall private level of employment finally exceeding the pre-recession high. The Household Survey had the unemployment rate holding steady at 6.7%. A recurrent problem is the poor quality of job growth in terms of underemployment/part timers and wage growth. The March labor market report from the BLS can be characterized as solid and showing little weather effects and probably some catch-up fr…

The role of income inequality

March 3, 2014

The rise in income inequality was a root cause of the U.S. financial crisis and the slow post-recovery period. Mediocre income gains for middle income households have contributed to the slow recovery of U.S. consumption and economic growth. As pressure continues to build to address income inequality, we expect the government to lead on this issue and private sector to lag. By Marie Schofield, Chief Economist and Toby Nangle, Head of Multi asse…

A less certain world favors high-quality stocks

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

…the weaker growth outlook in Europe and increased near-term geopolitical risks. A more uncertain outlook, but no recession in Europe Sentiment indicators do not currently suggest that Europe is heading back towards recession (Exhibit 1), though gross domestic product (GDP) growth will remain subdued. Much has been made of the recent downturn in some European sentiment indicators, but by and large they remain consistent with positive — albeit low…

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…

To infinity and beyond!

Colin Moore, Global Chief Investment Officer | October 13, 2014

…are root economy, during which we faced multiple years of structurally lower economic growth following the great recession. Six years ago many commentators assumed the recession would be followed by strong growth. Recessions are often caused by the need to correct cyclical excesses. So assuming the underlying trends are strong, it is not unreasonable to expect a strong bounce back. However, I believed then and continue to believe that the great r…