Perspectives Blog

European equities – Should investors care about periphery vs. core anymore?

Dan Ison, Portfolio Manager | January 13, 2014

…this, more later… Unit labor cost evolution, rebased to 100 in 2000 Source: Threadneedle International Limited Spain and Ireland are certainly the poster children of eurozone reforms. Both have exited their troika programmes (bailouts composed by European Commission, the International Monetary Fund and the European Central Bank). Spain can easily finance itself in open markets while Ireland is preparing for its first bond sale since the bailout…

Is Europe heading for Japanese-style deflation?

Martin Harvey, Fund Manager, Threadneedle International Ltd | August 4, 2014

Although there are many differences that should ensure that the eurozone does not follow Japan‘s fate, policymakers will need to act forcefully if the risk of deflation intensifies. While the euro area appears to be on track to avert deflation in the short term, many euro countries are “one crisis away from deflation.” The European Central Bank (ECB) claims to be ahead of the game, but policy needs to be more pro-active. The following is an ex…

Global market mid-year outlook

Mark Burgess, Chief Investment Officer, Threadneedle Investments | June 16, 2014

Overall macroeconomic picture in U.S. should push bond yields higher, particularly if the Fed stops its QE program later this year. We remain positive on emerging market debt while maintaining a bias against emerging market equities. Overall equity markets have been strong and current index levels suggest that investors still have confidence in the outlook for profits. Global equities and global bonds made progress in May with the former outpa…

Q4 fixed income outlook — External influences

Gene Tannuzzo, CFA, Senior Portfolio Manager | September 22, 2014

While the bond market has generated strong returns so far in 2014, we are positioning portfolios with a shorter duration to protect against rising interest rates. Although we think that corporate bonds look better than their government counterparts, the most attractive bond market opportunities may be outside of the corporate market. Investors should remain flexible in order to protect themselves from some of the policy potholes that may lie ah…

Inflation — The usual suspects

Zach Pandl, Portfolio Manager and Strategist | August 11, 2014

Four factors figure empirically into how and why inflation moves: (1) commodity prices, (2) spare capacity, (3) changes in exchange rates, and (4) monetary policy. These same factors argue for a gradual recovery in U.S. inflation in the year ahead, which could be a headwind for high-quality fixed-income returns. In contrast to U.S. markets, in markets with prospects for a trend lower in inflation expectations (e.g. certain pockets of EM), falli…

When the QE tide recedes, focus on what is revealed

Robert McConnaughey, Director of Global Research | January 6, 2014

Monetary stimulus from central banks can no longer be counted on to lift asset prices For 2014 we see a market with lower cross-correlations and more divergent investment outcomes Finding alpha opportunities requires in-depth global research to take advantage of market inefficiencies While there is fierce debate on the ultimate effectiveness of monetary stimulus surging from the central banks, one cannot dispute the boost that it has given to…

It’s a mobile world

Dave Egan, Senior Equity Analyst | March 10, 2014

While the growth of smartphones on the high-end is decelerating, the low-end in China and the emerging markets continue to see strong growth. The outlook for communications infrastructure seems to have improved. The ‘Internet of Things’ may be more evolutionary than revolutionary for most companies. Mobile World Congress (MWC) is the industry’s annual trade show, which was held this year during the last week of February in Barcelona, Spain. As…