Perspectives Blog

What to expect from Janet Yellen’s testimony

Zach Pandl, Portfolio Manager and Strategist | February 10, 2014

…red to something else. And relative to today’s FOMC, Yellen does not strike us as exceptionally dovish. 2. Narrower views on participation rate. For a few years now, economists have debated how to interpret the decline in the labor force participation rate—the percent of adults that are either working or looking for jobs. Based on the growing pile of research notes on this topic in my inbox, it looks like the economics community is closing in on…

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

March 10, 2014

Income inequality has tended to rise in both developed and EM. Companies look across the globe to determine where they can manufacture their products at the lowest risk-adjusted cost. We believe that the global unit labor cost arbitrage is likely to continue for many decades. By Marie Schofield, Chief Economist and Toby Nangle, Head of Multi Asset Allocation Last week we discussed rising income inequality in developed markets and the degree to…

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

Dan Ison, Portfolio Manager | January 13, 2014

…ns high, even within the region. Many people have forgotten how to invest in a bull market — indeed many market participants (in Europe at least) may never have experienced a true bull market at all. Of this, more later… Unit labor cost evolution, rebased to 100 in 2000 Source: Threadneedle International Limited Spain and Ireland are certainly the poster children of eurozone reforms. Both have exited their troika programmes (bailouts composed by…

Fed outlook over the short and longer run

Zach Pandl, Portfolio Manager and Strategist | October 23, 2013

…uncertain, these same two factors should lead to a pullback in QE in the not-too-distant future. First, Fed officials are unlikely to ignore the drop in the unemployment rate entirely. Although they have emphasized that other labor market indicators are important as well, the unemployment rate still plays a prominent role in debates about U.S. monetary policy. As Yellen herself noted in a speech earlier this year: “Federal Reserve research conclu…

FOMC December meeting scouting report

Zach Pandl, Portfolio Manager and Strategist | December 16, 2013

…of core inflation. At the September FOMC meeting press conference, Chairman Bernanke said that the decision to slow the pace of QE depended on “the receipt of evidence supporting the Committee’s expectation that gains in the labor market will be sustained and that inflation is moving back towards its 2 percent objective over time” (our emphasis). Since that time the incoming inflation data have offered a mixed picture. On the one hand, the six-m…

Does Japan’s sell-off present buying opportunities?

Daisuke Nomoto, Senior Portfolio Manager | February 10, 2014

…ts, we think the government will likely unveil a specific agenda for the third arrow particularly: i) corporate tax cuts; ii) granting a Special Economic Zone license to Tokyo, Osaka, Nagoya, Hokkaido and/or Okinawa; and iii) labor reform to ease working visa issuance to foreign workers for the construction and medical industries, raise female labor participation rate, etc. Since the market expectation of Abe’s growth strategy is somewhat low at…

Digital dining: How restaurants are applying technology to drive sales

Daniel Spelman, Equity Analyst | February 24, 2014

…antly, the tablets let customers check out and pay their bills quickly, so tables turn faster. Since credit cards never leave their owner’s hands, the risk of fraud drops significantly. Brinker will likely be able to leverage labor expense over time, and servers do not mind the tablets because tips tend to be higher. Lastly, the Ziosks help capture important customer data such as email addresses, so patrons can be targeted for future marketing me…