Perspectives Blog

Asset allocation – Kinetic vs. potential energy

Columbia Management Global Asset Allocation Team, | August 4, 2014

…we expected the U.S. to pass the baton of strong positive performance to the international markets, particularly Europe where hopes were high that the economy was finally edging out of recession. Instead, the European economy has continued to show signs of disinflation, prompting the European Central Bank (ECB) to introduce new stimulus measures in June. Analysts have also reduced earnings growth estimates sharply from overly optimistic earnings…

Ghost of crises past

Jay Leopold, Head, U.S. Investment Risk | October 27, 2014

…may have played an important role. While there may be little direct economic impact, it shook the confidence of Europe that both depends on natural gas from Russia and would be on the front lines of a regional conflict if Russia exhibited Soviet-style aspirations. Already anemic growth in Europe has slowed further. In addition, concerns regarding China’s growth have once again moved front and center. Finally, the unknowns regarding the spread of…

Asset allocation: Q4 equity strategy

Columbia Management Global Asset Allocation Team, | October 27, 2014

…ke action to stimulate the credit cycle in the eurozone. On this news, the euro fell 7.5% versus the dollar, but European equity markets have held up reasonably well in local currency terms. This slide in the euro could help boost Europe’s export-oriented economy and stem the deflationary pressure; but deficient demand remains a continuing headwind, and it might be a few months before the impact of such policies provides a backstop to support gro…

Stairs up, elevator down

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | August 18, 2014

…ion as summer draws to a close. Chief among these, we think, is the prominent slowdown in economic growth across Europe. Overall GDP growth across the eurozone in Q2 was 0.0, decelerating from its modest .2% trajectory during this year’s first quarter. The effects of this slowdown can readily be observed in the equity, bond and currency markets across Europe. This slowdown may pass, of course, or even prompt the European Central Bank to initiate…

Could tapering be good for stocks?

Fred Copper, Senior Portfolio Manager | December 16, 2013

Despite all the discussion surrounding quantitative easing (QE), there has been little theoretical justification for the link between QE and equity prices. Europe provides a glaring counter-example of the impact of central bank policy on financial markets. Once the psychic umbilical cord of QE is cut (tapered), the market may actually be cheered by the end of what has always been perceived as a temporary and extreme form of life support. Few i…

Special report – Commodity markets outlook

Columbia Management, Investment Team | July 21, 2014

…ket. Consequently, developments in the Ukraine, for example, have no bearing on the U.S. natural gas market. The European natural gas market certainly is affected, however. But overall we believe that Europe and Russia’s interdependence is too great for there to be any long-term impact from the problems in the Ukraine, where we anticipate that the situation will be resolved diplomatically without any serious disruption to supplies from Russia int…

Global asset allocation outlook (August 2014)

Columbia Management Global Asset Allocation Team, | September 8, 2014

…cial market volatility. This volatility is most visible in currency markets. For example, economic stress across Europe has created pressure on the euro. Some of this pressure has been intensified by geopolitical developments in Ukraine and in the Middle East. In the eurozone, economic data — both hard and forward looking sentiment indicators — has been disappointing. Inflation data in Europe has been particularly weak, prompting the European Cen…