Perspectives Blog

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

Dan Ison, Portfolio Manager | January 13, 2014

…for European equities with an interesting mix of winners and losers. The best performing markets (all returning more than 33% for the year) were Greece, Finland and Ireland. Of the larger markets, Germany, The Netherlands and Spain were the best performers while France, UK and Italy were the worst. Four years since the start of the Euro Crisis (Greece late 2009), can we finally stop worrying about the periphery versus the core?  Year-to-date perf…

Is Europe heading for Japanese-style deflation?

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

…erway, it is difficult to reverse. Progress report for Europe In contrast to Japan, Europe’s asset price crash was part of an international phenomenon. Although there were property bubbles in some euro area countries, such as Spain and Ireland, this was not the root cause of the problem. Initially, it was Europe’s exposure to global trade that caused a steep drop in economic activity in the wake of the Lehman collapse, while the onset of the sove…

Global market mid-year outlook

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

…a would suggest. All else equal, that should push bond yields higher, particularly if the Fed stops its QE program later this year. The outlook for eurozone bond markets is rather more difficult to call; certainly Germany and Spain appear to have positive growth momentum, which should put some upward pressure on yields if that momentum remains in train. By contrast, the growth outlook in countries such as Italy and France remains very subdued, wh…

Q4 fixed income outlook — External influences

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

…on, geopolitical concerns emanating from Russia, Ukraine and the Middle East have driven government bond yields to incredibly low levels. 10-year government bonds in Germany now yield near 1% while 10-year government bonds in Spain (once shunned for fiscal concerns) now yield less than those in the U.S. (Exhibit 1). Exhibit 1: U.S. Treasury yields now exceed those of many global peers While these factors have influenced domestic bond markets, th…

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…

Inflation — The usual suspects

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

…a few caveats and special factors, inflation is generally higher in countries with smaller output gaps (e.g., Norway, New Zealand and Germany) and lower in countries with bigger output gaps (e.g., Cyprus, Greece, Ireland and Spain). These data are entirely consistent with the historical evidence that weakness in the real economy puts downward pressure on inflation. Exhibit 2: Lower inflation in economies with weaker real activity In emerging ma…

When the QE tide recedes, focus on what is revealed

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

…ompetitive front and the pace of reforms, it is far from a universally positive outlook. While we are seeing signs of improvement on the margin, there is divergence between the fortunes of the most proactive reformers such as Spain and the UK and the foot-draggers such as France. However, unlike the U.S., aggregate profit margins are well below prior peaks and valuations remain fairly forgiving, leaving room for upside against that backdrop of lo…