Perspectives Blog

Global asset allocation outlook (as of March 2014)

Columbia Management Global Asset Allocation Team, | April 7, 2014

…first quarter rising about 5%-7%. In a complete reversal from last year’s trend, commodities also rallied in the first quarter. The U.S. economy experienced a slowdown partly attributed to weather, but also due to softness in housing and payback from a very strong inventory cycle in the second half of 2013. In addition, geopolitical fears intensified with Russia’s incursion into Ukraine and nervousness about the shadow banking system in China res…

Special report – Commodity markets outlook

Columbia Management, Investment Team | July 21, 2014

…ve to hold underweights in others, since we are always fully invested in commodities. Our significant underweight in copper and aluminium results from the negative news flowing from China, whether it concerns the economy, the housing market or the financial sector. Prices are unlikely to pick up until this negative newsflow abates and there is a change in the demand dynamic in China. However, we would expect that our underweight stance on copper,…

Retail sector outlook – It’s a share game

Mari Shor, Senior Equity Analyst | March 17, 2014

…he holiday season provides a useful prism through which to examine consumer behavior into 2014. On the positive side, comparisons ease as we cycle the payroll tax increase in 2013, and the “wealth effect” (net equity gains in housing and stocks) should drive sustained strength in consumer confidence. Unfortunately, the negatives seem to outweigh the positives with 1) lower levels of growth in disposable income forcing allocations across spending…

More light, less tunnel

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | October 31, 2013

…markets and manufacturing orders. Unfortunately, both reports present a picture of economic activity in the third quarter that ended on a soft note well before the government shutdown. Consumer sentiment measures slipped and housing demand cooled. Next week we will see reports on industrial production and consumer spending for September giving us a fuller picture of Q3 activity. But so far, growth appears little changed from the tepid 1% to 2% p…

Second quarter earnings preview

Tom West, Director of Equity Research | June 30, 2014

…es with large revenue streams outside the U.S. The economic backdrop for financial stocks has largely remained the same, with some surprises. Volatility in capital markets has remained weak, driving weak trading revenues, and housing metrics have remained stable. The surprises have been the accelerating strength of M&A activity, the 0.25% drop in the 10-year Treasury and modest signs of an increase in loan demand. The overall revenue environm…

Where’s Waldo? Be on the lookout for rising costs in a low growth world

Paul DiGiacomo, Senior Analyst | August 18, 2014

…nsumer Price Index (CPI) growth rates have remained within a low band since the recession, despite the Fed’s massive liquidity injection (Exhibit 1). But, cracks in the façade are starting to show. With the modest recovery in housing, the move of manufacturing back to North America and the shale energy boom, the trucking industry is struggling to find drivers, given the industry’s low wages and poor quality of life: a typical long-haul driver ret…

A tale of two labor markets

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | November 11, 2013

…pending) was soft, up only 1.5%, and the smallest rise in two years. Unfortunately, business spending actually pulled back, the first decline in a year, as uncertainty is still restraining spending. Residential investment and housing remains a support (up 15%) and trade contributed positively to growth as net exports advanced. The fiscal drag is also waning with a small net add from state and local purchases. Trend growth still looks near 2% base…