Perspectives Blog

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…

Gaps, not growth

Zach Pandl, Portfolio Manager and Strategist | February 25, 2014

…ts structural rate. Okun’s Law is at the center of today’s biggest policy debate. Since the recovery began in the second half of 2009, GDP growth has increased at an average annualized rate of just 2.4%. Before and during the recession, most economists thought that potential GDP growth was greater than 2.5% (based on various forecaster surveys). Thus, the Okun’s Law equation above would have implied a worsening output gap, because GDP growth was…

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…

Building wealth through dividend investing

February 18, 2014

…ng *Source: Ned Davis Research, August 2013 Dividend payments are not guaranteed. The amount of a dividend payment, if any, can vary over time and issuers may reduce or eliminate dividends paid on securities in the event of a recession or adverse event affecting a specific industry or issuer. The Standard & Poor’s (S&P) 500 Index tracks the performance of 500 widely held, large-capitalization U.S. stocks….

What to make of the rebound in emerging market equities

Dara White, Senior Portfolio Manager | April 14, 2014

…s the market is getting excited a little too early about the prospects of change. With reservoir levels running at historic lows, the country will very likely face energy rationing, which may push the economy into a technical recession. Finally, valuations are not as cheap as they might first appear at 10x earnings and 1.5x book value. If you take a closer look at the index constituents and exclude the Chinese banking and Russian energy sectors w…

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…