Perspectives Blog

China’s reform announcement

Timothy Flanagan, Associate Portfolio Manager | November 21, 2013

…seems to have hit the major areas required to move the economy to a long‐term sustainable growth model: Financial system liberalization for more efficient resource allocation, eventually reducing financial repression to spur consumption growth, balancing the fiscal disparity between local governments and the central government, eventually floating the currency, more SOE privatization, and improving social safety nets (pensions, land rights, and…

Inflation consternation

Martin Harvey, Fund Manager, Threadneedle International Ltd | November 5, 2013

…tral Bank (ECB) action on November 7 or the December meeting. Previously, ECB President Mario Draghi has said lower inflation due to factors such as energy prices is actually positive, as it boosts disposable income and hence consumption. For sure, some of the October decline comes from energy base effects given that annual energy inflation fell to -1.7% year over year. But this doesn’t explain all of it. From a country perspective, a lot of the…

Apparel retail doldrums

Mari Shor, Senior Equity Analyst | August 11, 2014

…Premier global brands with differentiated product and strong, flexible supply chains are best positioned to manage through this challenging environment. Since late 2011, consumer spending has been paltry, with real personal consumption expenditures (PCE) running at a below-average growth rate around 2%. Digging deeper, spending on apparel and other non-durable goods has been weaker than spending on other categories, including durables and leisu…

Investing selectively in Asia

Soo Nam Ng, Head of Asian Equities | July 14, 2014

…ipe for growth opportunities as adaptive changes run their course and set investors up for prolonged harvesting. Asia ex Japan is still the fastest growing region in the world and its secular growth drivers remain intact. The consumption trend, for example, is still on an upward trajectory. However, one needs to be selective as to which sub-segments offer the greatest potential. While Swiss watches and Italian handbags are reeling from an anti-co…

Global Asset Allocation Outlook (as of May 13, 2014)

Columbia Management Global Asset Allocation Team, | June 2, 2014

…positive. The first quarter was indeed a disappointment on the growth front, but we are beginning to see signs of improvement in the second quarter. Areas of stability include improvement in payroll data and stabilization in consumption trends on slight improvement in wage growth. Overall, the broad range of U.S. data continues to suggest a rebound in the second quarter. We expect equities to outperform bonds in this environment. The asset alloc…

Emerging Markets: Waiting on exports

Anwiti Bahuguna, Ph.D., Senior Portfolio Manager | March 31, 2014

…broken out of the 2%-3% range, the eurozone is no longer contracting but expectations are for growth of only about 1%, and there are questions regarding Japan’s ability to sustain any growth rebound with the advent of the new consumption tax. Global growth has simply not been strong enough to support high demand for EM exports. The question is whether a continuing gradual recovery will eventually translate into EM export acceleration or whether o…

Finding opportunity in Chinese reforms

Robert McConnaughey, Director of Global Research | June 16, 2014

…be the ripple effects of closing unprofitable and highly polluting plants producing energy-intensive products such as steel and aluminum. The Chinese consumer’s tastes are also changing at a very rapid pace. Pure materialist consumption is losing share of spend, but cash-rich Chinese families are shifting significant resources into areas such as health (healthier food and beverage, exercise and preventative medicine), travel and private educatio…