The impact of Iraq’s turmoil on oil prices has been fairly muted, but any escalation of violence could pose a serious threat to the stability of global oil markets. With Iraq accounting for the majority of OPEC’s production growth, the market has started to rethink long term supply-demand dynamics and adjust commodity forecasts. Longer term
We believe YTD valuation improvement in stocks is more likely the result of basic supply and demand than an upward revision off corporate prospects. Going into corporate reporting season, we’re focused on whether the cyclical sectors show some signs of increasing activity. For the less cyclical sectors and consumer discretionary industries, we want to see
In contrast to last year, so far this year all major asset classes have performed well. Developed market equities, bonds, emerging market (EM) equities and EM bonds, and commodities are all up year to date in the range of 4%-8%. Globally diversified portfolios should continue to fare well in this environment and the global asset
Companies with competitive strengths still intact should have positive profit growth once adaptive change gets underway. The ability to control cost is essential to surviving the growth slowdown in Asia Pacific ex Japan. We do not just need companies to be adapted; we also need them to be positioned for adapting. A New Moderation in
Key investment professionals review the first half of 2014 and share their insights into what may be ahead for the second half of the year. Interest rates Zach Pandl, Portfolio manager and strategist Review: Government bond yields declined in early 2014, both in the U.S. and in other developed market economies. This surprising change in
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.
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