We continue to be excited about the opportunities to position in emerging markets ahead of positive change where market uncertainty still exists. Chinese corporate level governance reforms may be fertile ground for undiscovered investment opportunities. The scope and pace of China’s reform will have significant influence on the global economy and should be monitored closely.
Global Perspectives offers global economic, market and investment commentary on Monday morning of each week.
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
Fed and consensus unemployment forecasts are likely to come down after last week’s jobs report. It is not obvious what lower unemployment rate forecasts mean for U.S. monetary policy. June FOMC meeting should shed light on Fed’s worldview—in particular, whether the U3 unemployment rate still matters. The latest jobs report may look pretty bland on
Several forces are colliding now and causing a downshift in the trajectory of the U.S. housing recovery. Household formations remain at multi-year lows due in large part to mediocre income and job gains in combination with high student loan debt by 25 – 45 year old homebuyers. Fewer homeowners mean missing multipliers for growth. As
The Great Moderation was a period of macroeconomic growth and reduced volatility that provided a backdrop to the strong performance of U.S. equities. The lessons hold relevance for equity investors in Asia as big picture conditions for a Great Moderation are starting to fall into place. We believe the “new moderation” mindset will take Asia
For many investors, emerging market debt could be viewed as a core-portfolio holding rather than a short-term tactical investment. 2013’s re-pricing created value in terms of higher yields, a more dedicated investor base and a better relative value argument. Flexibility across the full spectrum of EMD investment opportunities is extremely important, as emerging markets are
The global asset allocation team reaffirmed their recommendation to modestly overweight equities versus bonds, despite the slight underperformance of equities relative to bonds so far this year. The S&P 500 is up about 3.5% while the Barclay’s aggregate index is up 4.0% and longer dated bonds are up over 13%. This strong bond market performance