Perspectives Blog

Asset allocation – Kinetic vs. potential energy

Columbia Management Global Asset Allocation Team, | August 4, 2014

…further downward revisions to profit expectations. In our latest Investment Strategy Outlook we discuss kinetic energy vs. potential energy and how the distinction between the two provides a helpful metaphor as we formulate our investment strategy. The following excerpt focuses on our equity strategy. Using the metaphor of kinetic energy as a tenacious force, we find that most equity markets across the globe were swept up in the first half of th…

A less certain world favors high-quality stocks

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

…litical risks have come to the fore, not only because of the Ukrainian situation and corresponding concerns over energy security, but also due to unrest in the Middle East. With its reliance on Russian energy supplies, Europe has suffered as a result of the Russia/Ukraine crisis. However we should bear in mind that of the major developed economies, only the U.S. is close to full energy independence. Countries such as Japan and the UK depend heavi…

Special report – Commodity markets outlook

Columbia Management, Investment Team | July 21, 2014

…ove. Given that the developed world is leading the global economy, we anticipate that the expansion will be more energy intensive, and less intensive in terms of its consumption of industrial-type commodities, than if it were led by the emerging economies. Could you elaborate on developments in the energy complex, including how the Iraqi conflict is affecting oil and how the situation in Ukraine is impacting natural gas? We anticipate that the pr…

What to expect from U.S. midterm elections

Robert McConnaughey, Director of Global Research | October 20, 2014

…concern about the ACA (Obamacare) has fallen significantly. Similarly, the GOP effort to run on support for U.S. energy independence and energy-based job creation seems less effective with dramatically falling oil/gasoline prices. Finally, despite the oft-cited portrayal of the GOP as the party of Big Money, the Democrats have a significant overall funding advantage in these elections; that money will give them an edge in the advertising barrage…

Lifting the U.S. oil export ban – Who wins?

Jonathan Mogil, Portfolio Manager and Senior Analyst | March 24, 2014

…ation of U.S. oil export policies; however, independent refiners would likely see their profitably decline. The Energy Policy and Conservation Act of 1975 Following the OPEC oil embargo in 1973, Congress enacted the Energy Policy and Conservation Act of 1975, making it illegal to export U.S. oil without a license. At that time, the U.S. was producing 8.4 million barrels per day (mbpd) of oil, and importing 4.1mbpd, representing one-third of its…

Ukraine Crisis – Can the U.S. make Europe less dependent on Russian gas?

Jonathan Mogil, Portfolio Manager and Senior Analyst | July 28, 2014

…year, there have been calls for the U.S. to assist its European allies who are heavily reliant on Russia for its energy needs. In March, John Boehner, Speaker of the U.S. House of Representatives called for Obama administration to expedite the process for exporting LNG. Other lawmakers in both the U.S. and Europe have called for similar actions. In late May, the Department of Energy (DOE) proposed a major overhaul of its approval process for non-…

Turmoil in Iraq – Implications for the oil market

Jonathan Mogil, Portfolio Manager and Senior Analyst | June 30, 2014

…nk long term supply-demand dynamics and adjust commodity forecasts which underpin the earnings and cash flows of energy companies. Of note, North American energy companies are generally more levered to domestic crude prices, and given the current U.S. export ban on crude oil, they are somewhat less sensitive to changes in the Brent oil price stemming from geopolitical tensions. What are the implications for oil prices? While oil prices have incre…