Perspectives Blog

Triangulating on 2014 corporate earnings

Tom West, Director of Equity Research | January 27, 2014

Estimating corporate earnings with bottom-up forecasts, top down forecasts and empirical forecasts will result in a range of outcomes While we believe bottom-up forecasts provide the best estimate, the other two methods can be useful in testing the result We look at top down build-up earnings growth for the S&P 500 and growth expectations by sector to arrive at an EPS growth estimate for 2014 I generally think the best way to build up an e…

What should U.S. bond investors expect in 2014?

Zach Pandl, Portfolio Manager and Strategist | January 6, 2014

…expected to continue at a steady pace throughout this year, the timing of the Fed’s QE exit is no longer the central question in the interest rate outlook. Instead, at the start of 2014, market attention is now turning toward growth. Unlike most asset classes, government bonds and other interest rate-sensitive securities tend to perform best when the economy performs poorly—when growth and inflation are falling and the Federal Reserve eases monet…

European equities – Should investors care about periphery vs. core anymore?

Dan Ison, Portfolio Manager | January 13, 2014

The more dramatic the economic reforms, the better the stock market performance in the eurozone We expect nominal growth to be the key driver of an improving earnings picture in Europe European equities should show further good returns to investors in 2014 As we enter 2014 there are the usual questions, conversations and strategy pieces extolling the virtues of different regions and asset classes. 2013 saw a phoenix-like resurgence in interest…

Slow growth: Why is it here and will it stay?

February 24, 2014

There is no consensus on the root causes of slow growth. As economists seek explanations, the secular stagnation theory has re-emerged. Strong evidence suggests the neutral real rate has fallen. (But is it negative? We explore this question in this continuing series over the next few weeks.) By Marie Schofield, Chief Economist and Toby Nangle, Head of Multi Asset Allocation The idea that economies may be undergoing a long period of slow growth

Income inequality, disinflation and profit growth – the role of globalization

March 10, 2014

…lly unstable and unsustainable dynamic that culminated in the global financial crisis. We postulated that the lack of willingness on the part of banks to recreate this unsustainable dynamic would deliver a drag to consumption growth in developed markets. This week we consider the degree to which income inequality is a global phenomenon. Many countries in emerging markets (EM) have high and rising levels of income inequality with attendant social…

It’s a mobile world

Dave Egan, Senior Equity Analyst | March 10, 2014

While the growth of smartphones on the high-end is decelerating, the low-end in China and the emerging markets continue to see strong growth. The outlook for communications infrastructure seems to have improved. The ‘Internet of Things’ may be more evolutionary than revolutionary for most companies. Mobile World Congress (MWC) is the industry’s annual trade show, which was held this year during the last week of February in Barcelona, Spain. As…

More heat than light

Zach Pandl, Portfolio Manager and Strategist | October 3, 2013

Recent comments from the Fed have provided relatively little information about future QE tapering decisions. Officials have expressed contradictory views on several major policy concerns, including the state of the labor market. If economic growth continues over the next few months, tapering may commence in December. Following their surprising decision to maintain the current pace of quantitative easing (QE), Fed officials provided more detail…