Perspectives Blog

The perils and pitfalls of buying individual municipal bonds

James Dearborn, Head of Municipal Bonds | February 27, 2014

…nsured bonds, analysts at rating agencies are now required to follow a larger numbers of issuers. This increased workload comes at a time when many state and local governments are still addressing the lingering effects of the recession as well the ramifications of depleted pension funding. These factors have been exacerbated by the ratings recalibration, a large scale rating adjustment that resulted in sweeping credit upgrades. In 2010, Moody’s a…

Flexible income strategies — Avoiding side effects from the Fed’s medicine

David King, CFA, Senior Portfolio Manager | August 11, 2014

…te risk. To increase an investor’s chances of success, an investment strategy needs the flexibility to look beyond the most visible asset classes with the most homogeneity and highest correlations. The U.S. economy went into recession in 2008, and it looked serious. As our fiscal deficit piled up, the political appetite for high government spending waned, leaving monetary policy as the primary available weapon to prevent recession from becoming…

An improving outlook for European equities

Philip Dicken, Head of European Equities, Threadneedle International Ltd | October 18, 2013

Economic data confirm that the Eurozone has exited recession. There are signs that corporate transactional activity is increasing as businesses become more financially secure. While Europe remains beset by challenges, the economic background is improving, valuations are looking more attractive and investors who have not been paying attention to European stocks may want to take a closer look. According to Eurostat, the 17 eurozone member states…

Dovish feathers showing through

Zach Pandl, Portfolio Manager and Strategist | April 14, 2014

…t, Yellen made clear last Monday that she views the “extra slack”—that portion not accounted for by the U3 unemployment rate—as extremely costly. She said, for example: “In some ways, the job market is tougher now than in any recession”. Second, the FOMC meeting minutes hinted that the upward shift in the funds rate forecasts may have overstated the change in the views of the committee leadership (although there remains some question about exactl…

Labor markets in the new digital age

Columbia Management, Investment Team | April 14, 2014

…d is now at 60.7%, the lowest level since 1952. The last time labor’s income share was rising was when the economy experienced near full employment. Since then, the rise in unemployment and the expanding output gap during the recession undermined the bargaining power of workers and automation made some expendable. High profit margins are (and will remain) a continuing theme as businesses directs capital to technology which substitutes for (low-sk…

Q2 fixed income outlook – Hitting for the cycle

Gene Tannuzzo, CFA, Senior Portfolio Manager | March 31, 2014

…new-issue volume Source: JP Morgan The economic cycle is favorable at this stage, but much less advanced than the credit cycle. While moderate growth continues, the economy has yet to recover all of the jobs lost during the recession, and unemployment is still above the Fed’s target. The U.S. housing market is improving on the back of reduced supply, labor market improvements and overall confidence. We believe this creates opportunities for bon…

Lifting the U.S. oil export ban – Who wins?

Jonathan Mogil, Portfolio Manager and Senior Analyst | March 24, 2014

…ducing 8.4 million barrels per day (mbpd) of oil, and importing 4.1mbpd, representing one-third of its total consumption. Over the next three decades, oil imports more than doubled, and by 2008, during the throes of the Great Recession, the U.S. was importing 66% of its total oil consumption. Since 2008, U.S. oil volumes have grown faster than anywhere else in the world as a result of the U.S. shale revolution. Oil production averaged 7.5mbpd dur…