Latest Perspectives

Global Economy

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In equity markets, we are generally positive on the major regions except emerging markets, which we continue to underweight. There are some selective opportunities in EM countries benefitting from lower oil prices and where the respective governments have committed to business-friendly reforms.
In bond markets, we see an increasing disconnect between the U.S. and UK, where yields should move higher, and Europe, where the ECB began intervening in secondary markets on 9 March.

Tagged with: Economy, Equities, Global Economy, Global Perspectives

Q: What do you mean by “solutions” as referenced in your title and domain of responsibility? A: We use that word to refer to investment strategies whose success and risk are defined in an outcome-oriented way as opposed to a benchmark-oriented way.

Tagged with: Asset Allocation, Equities, Fixed Income, Global Economy, Global Perspectives, Investing, Markets

The factors keeping inflation low remain U.S. dollar strength and sluggish global trade, together with the deflationary pulse from weak energy and commodity prices. While there is little danger of this developing into true deflation, the strong dollar effect will continue to depress inflation for much longer and this has a stronger influence on core inflation.

Tagged with: Economy, Global Economy, Global Perspectives

Base metals, U.S. natural gas, grains and now oil are all trading at price levels that are signalling producers to cut production. We see the over-production of oil as temporary and the market balancing in Q3 2015, and while this will leave significant inventories to work through, prices should recover into year end.

Tagged with: Global Economy, Global Perspectives, Investing

The European Central Bank is embarking on quantitative easing at a time when tailwinds are already beginning to build behind the euro area economy. A more constructive economic outlook could have important implications for European markets.

Tagged with: Equities, Global Economy, Global Perspectives, Markets

Investors are concluding that the prospects for EM equities are as dim as ever. Yet evaluating EM as a monolithic whole is outdated and dangerous.

Tagged with: Equities, Global Economy, Global Perspectives

The strong U.S. dollar has weighed on the results of global firms that report in dollars. But investors think there may be some end-market weakness hiding in the currency translation effects.

Tagged with: Economy, Equities, Global Economy, Global Perspectives

Fed officials should be encouraged by the ECB’s announcement to begin a large-scale bond buying program in an effort to shore up growth and prevent deflation. The action reduces downside risks to global growth, and thus the risks of spillovers to the domestic economy.

Tagged with: Economic/Markets Outlook, Economy, Global Economy, Global Perspectives, Investing

We are positive on the financial market impact of European QE if it brings down risk premia such as peripheral bond spreads. The tendency amongst investors will be to own more risk assets such as equities, particularly as the ECB’s move will help to keep interest rates low globally.

Tagged with: Global Economy, Global Perspectives, Investing

Investors should understand the risks in their portfolio, and be cognizant that black swan events can occur much more frequently than models suggest. Risk models are extremely helpful when thinking about portfolio construction, but shouldn’t be relied upon exclusively.

Tagged with: Economy, Global Economy, Global Perspectives
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