Search results for: stimulus

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Should investors be cheering Japan’s new stimulus program?

Stock markets rose on the announcement that the government of Prime Minister Shinzo Abe was significantly stepping up its policy actions. The other major announcement was that the Government Pension Investment Fund will shift its asset allocation to domestic equities and foreign bonds/equities away from domestic bonds.

Tagged with: Equities, Global Economy, Investing

Is the ECB’s stimulus a positive for European stocks?

Under yesterday’s expanded QE programme, the European Central Bank (ECB) will implement combined monthly purchases of €60bn to end September 2016 or until there is sustained improvement in path of inflation (i.e,. a far-reaching commitment,  though they have said they will not buy more than 25% of the outstanding stock).

Tagged with: Global Economy, Markets

Bond yields are too low somewhere

Long-maturity bond yields are determined at a global level. Abnormally low forward rates are not just a U.S. phenomenon: there’s been a similar shift in the relationship between rates and growth across developed markets.

Tagged with: Economy, Fixed Income, U.S. Economy

Stairs up, elevator down

Major asset classes had nice gains through mid-June but have declined as of late. Although we still favor equities, we think it is time to bolster portfolio resilience.

Tagged with: Asset Allocation, Equities, Fixed Income, Investing, Markets

ECB asset purchases — Bazooka or damp squib?

With inflation expectations declining to the levels that preceded the recent shift in policy, should the ECB and the financial markets be worried? In our view, the ECB probably won’t be wholly impressed by the reaction of inflation expectations to recently announced measures, and will be keeping a close eye on favored measures.

Tagged with: Economy, Global Economy, Markets

Oil and the high yield market

By Jennifer Ponce de Leon, Senior 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 (healthcare is the second largest at approximately 8.5%).

Tagged with: Fixed Income, Investing

Is Europe heading for Japanese-style deflation?

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.

Tagged with: Global Economy, Investing

Is Europe Heading for Japanese-style Deflation?

There are many parallels between the euro area today and Japan in the 1990s. The euro area appears to be on track to avert deflation in the short term.

Tagged with: Equities, Global Economy, Investing, Markets

What to make of the rebound in emerging market equities

Despite continuing headlines of concern, EM markets have rebounded recently. In order to sustain that rally, we need to see progress on export volumes and political/economic reforms.
While not universally cheap, EM equity valuations are not unreasonable and we continue to find bottom-up opportunities.

Tagged with: Equities, Global Economy, Investing
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