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Results 301–350
of 439 found.
Your Alpha is My Beta
A couple of weeks ago, I had the pleasure of a short correspondence with Lars Kestner, a well known quant and derivatives trader, and creator of the thoughtful K-ratio as a measure of risk adjusted performance. We connected on the definition of alpha, and how the term has been so abused in media and marketing as to become almost meaningless.
Germany's "Time Pressure" Thesis; Noose Tightens on Europe
Today German Chancellor Angela Merkel proclaimed Greek Diplomatic Offensive Is Failing. Merkel’s Christian Democratic-led bloc in parliament has agreed not to give in to any “bad compromise that “defacto adds up to a debt writedown,” Hans-Peter Friedrich, a deputy leader of the caucus, said in an interview today.
Gallup CEO Calls 5.6% Unemployment Rate "The Big Lie": What's a Realistic Unemployment Rate?
On Linked-In, Gallup CEO, Jim Clifton proclaims 5.6% unemployment is "The Big Lie". And it is. I have talked about this for years, but perhaps it would be interesting to hear the same thing from a CEO of a big agency. I picked this story up from ZeroHedge.
Wait and See at the Bank of England
UK growth looks to be sustainable, with encouraging domestic demand, though we need to see business investment continue to pick up. Although inflation hovering below the 1% lower tolerance band of the Bank of England (BOE) remains a concern, we think it actually gives the central bank welcome breathing room during a period of uncertainty for the global economy. Looking ahead, we see compelling investment value in the intermediate part of the UK yield curve, namely five- to 10-year bonds, as the BOE plays the waiting game.
Dow 20,000: Is 2015 the Year
It?s that time of year again. Yup, that jolly, happy time of year when the soothsayers of Wall Street start trumpeting their views on what?s going to happen in 2015, and how to position portfolios to profit. Esteemed Wharton professor, Jeremy Siegel, author of the permabull bible, Stocks for the Long Run, recently joined the merry parade with his own forecast that Dow 20,000 ?could happen? in 2015. Astute investors might take stakes now in large manufacturers of confetti, party horns, and streamers.
Recovery Gaining Momentum?
U.S. growth will remain robust over the cyclical horizon due to increasing consumption driven by the narrowing unemployment gap and increase in disposable incomes. The Canadian recovery should continue, though divergent forces ? including the U.S. recovery and oil price declines ? could have significant implications for the economy. Growth will be muted across Latin America, with some economies benefitting from U.S. growth, and others dragged down by the slowdown in the eurozone and China.
Is the UK Getting Back to Business as Usual??
In light of the generally buoyant economy, we may start to see more normal conditions returning to the UK labour market and, importantly, upward movement in wage growth over the cyclical horizon. In turn, these developments are critical for the conduct and timing of monetary policy and the behaviour of the Bank of England's (BOE) Monetary Policy Committee. We believe investors may want to treat the BOE's interest rate cycle with caution in shorter-maturity bonds, while valuations offer more protection in intermediate bonds given PIMCO's New Neutral thesis of secularly low real interest rates.
Financial Repression (and How to Defend Yourself From It)
by Mike Shedlock of Doug Short,
I had the pleasure of being interviewed by Gordon Long last week. Gordon is publisher and editor of Gordon T Long Macro Analytics. The topic was "Financial Repression". What is financial repression? I defined it as "a set of fiscal and monetary policies for the expressed benefit of the ruling class: politicians, banks, and the already wealthy, at the expense of everyone else." In the video, I give numerous examples of repression, noting that central bank sponsored inflation is the epitome of financial repression. We also discuss what to do about financial repression.
PIMCO Cyclical Outlook for the Americas: Recovery Remains Intact, Yet Uneven
U.S. growth can potentially exceed expectations over the cyclical horizon, in part bolstered by a healing consumer and a very accommodative Federal Reserve. While real growth in Canada has been modest in recent years, it increased to 3.1% in the second quarter and we expect that positive momentum to continue this year. In Latin America, we expect growth will pick up for the region as a whole with outperformance by smaller economies like Colombia and Panama.
Forget Active vs. Passive: It's All About Factors
We just love a good debate, and there seems to be quite a heated debate at the moment about the relative utility of passive versus active investing. Perhaps this debate is as timeless as investment management itself, but a flurry of recent studies may have finally armed passive advocates with enough ammunition to settle the argument once and for all.
Is There a UK Housing Bubble????
We see the UK experiencing a very traditional monetary cycle involving lower mortgage rates, higher house prices and then hopefully higher transactions. The Bank of England can address rising house prices either by raising financing costs via the banking system or by raising interest rates. Markets will watch BoE activity closely. Our expectation is for a gradual and modest interest rate cycle, with low rates in the UK economy for years to come. Housing may be an overvalued asset, but one that is secularly supported by low rates.
Mixed Signals and the Road Less Traveled
As the markets flirt with all-time highs and a potential shift in Fed policy, earnings season has not altered the fact that the level of investor uncertainty feels elevated. Throw in the case of a really bad winter, a geopolitical environment that rhymes with events just prior to World War I, and poor trading volumes, and it all suggests that heightened levels of unease remain.
Henny Pennies
While the Fed?s qualitative guidance may have increased uncertainties over monetary policy, volatility will likely remain contained by powerful short- and long-run forces related to the economic outlook. In the UK, we should at least respect the risk of a hike late in the first quarter of 2015, earlier than what is currently priced in. In Japan, we believe the BOJ will remain full throttle on its current monetary easing for some time.
A Sustainable Recovery??
Early signs indicate that the long awaited increase in business investment is underway. In turn, that bodes well for real income growth and the sustainability of the economic recovery. Given the improved economic prospects and the change in rhetoric at the Bank of England, the central bank could well be an early adopter of tighter monetary policy. We expect the BoE to hike rates ahead of the US Federal Reserve. While we beli?eve the British pound has already reflected the BoE?s guidance for official rates to rise by mid-2015, the bond market has yet to fully reflect the new environment. ?
Broadleaf's 2014 Investment Playbook
Most sell side firms publish their outlook for the economy and stock market at the end of December and in early January. As a buy side firm, we really arent under any expectation to share our outlook for the coming year and, as funny as it might sound, some of our clients dont even care to know what we think, only that we handle what they hired us to do, which is to outperform the market indices over a full market cycle and help them attain their financial goals over time.
Reflections on 2013: What's Important, What's Not, and What's Ahead
A tale of 2 halves with lingering questions characterizes what we can say was the story for housing for 2013. In the first half of the year, rates were low as the 10 year note was well under 2%. People were still refinancing, as home prices rocketed. Multiple bids were common, and pundits like Ivy Zelman cheered the improving market with praise like "Housing is in Nirvana".
2013 A Pretty Good Year
by Mike Temple of Pioneer Investments,
This time last year we were bullish about equities and positive on the slow but steady strengthening of the economy. The market did not disappoint. The economy was almost heroic, you might say, with its performance enduring government sequestrations and higher taxes almost a 2% drag on GDP but comporting with our expectations of 2 - 2.5% growth. 2013 is ending with GDP and the markets coming fairly close to what we thought theyd achieve. Now the year is almost out, so lets take stock of 2013 but look ahead to 2014.
A Much Better Dilemma
While the UK economy is likely to avoid reverting to growth levels of recent years, it must transition into a more durable recovery involving business investment, higher productivity and stronger real wages. However, headwinds for domestic demand look significant and the banking system appears to favour secured lending to consumers over businesses. We believe that much of the rise in bond yields is already behind us. With clearer value in shorter bonds, our preference lies in short and intermediate gilts.
Viewpoints from AAM - Navigating the New High Landscape
December, historically the best month to own equities, has begun with a whimper with the S&P 500 closing at a loss each of the first four days of the month. If you include the last trading day of November, that makes five days in a row of red-filled screens for a total loss of 1.23% for the S&P 500. In the grand scheme of things that is a pretty small loss but it already has pundits dismissing the chances of a "Santa Claus Rally" and others saying the recent new market high of 1807.23 for the S&P 500 reached on November 27 might be its last.
Twenty Five
I am not a particularly good salesman. From the time I first meet a prospect to when they become a full-fledged client, it can often take two years even when they initiate the first meeting. Fortunately, growing the firm isnt one of my primary roles, a responsibility that does fall to Bill Hoover, my business partner. The beauty of our relationship is that while Bill devotes his time to our firms outside efforts, I am able to spend almost all of my attention tending to the portfolios of those who have already hired us. (View a printable version of this Economic
Aberdeen Global Investment Outlook: September 2013
by Mike Turner of abrdn,
The point of maximum policy accommodation may now be in sight:
Markets volatile as investors forced to contemplate U.S. Federal Reserve (Fed) exit strategy.
Slowing growth in China is putting pressure on Asian and emerging markets to develop domestic led demand.
This time really could be different for Japan - however reflating the economy was never going to be easy.
The Next Big Challenge to Investors: Rising Rates
by Mike Temple of Pioneer Investments,
Many investors were conditioned to accept that the economy would be in the rehabilitation ward for the foreseeable future, rates would remain low, and monetary stimulus would continue unabated. It was an increasingly dangerous mindset. Now thats changing with the slow but steady recovery of the economy and the Federal Reserves announcement in August that it may begin tapering its billions in monthly bond purchases designed to keep rates low and boost asset prices.
Four Interest Rate Scenarios We Could Face
by Mike Temple of Pioneer Investments,
Ive written a lot lately on the subject of duration and its potential impact on investor portfolios, now that the initial goals of the Federal Reserves Great Monetary Experiment appear largely accomplished and tapering of its monthly purchase of Treasuries to keep rates low is on the table. The era of lowering interest rates and rising bond prices looks finally at an end, with no place for rates to go but up. Its vital, then, that investors think about the impact that rising bond yields could have on their portfolios. Here are a few scenarios w
ING Fixed Income Perspectives August 2013
While it?s been said that a picture is worth a thousand words, some pictures are just not that complicated. Take the current U.S. yield curve, for example, our interpretation of which can be boiled down to just a handful of syllables: ?zero interest rate policy? and ?taper?.
The Next Big Challenge to Investors: Duration
by Mike Temple of Pioneer Investments,
Many investors have been conditioned to accept that the economy will be in the rehabilitation ward for the foreseeable future, rates will remain low, and monetary stimulus unending. We believe this is an increasingly dangerous mindset and the next great risk for bond investors is coming into view: the return of higher interest rates. We look at the refuge subsectors those areas of the fixed income market that investors may believe provide safe haven from the gathering storm.
Looking Farther Down the Road
The stock market has continued to do very well over the summer months, reaching new, all-time highs and proving to even the most stubborn of skeptics that Great Recessions can become Great Recoveries for those with the appropriate time horizon. While our industry spends a great deal of time and effort focused on relative performance results compared to appropriate benchmarks, the greatest value any financial advisor or money manager can provide is usually addressed far less often; simply keeping you in the game.
ING Fixed Income Perspectives July 2013
We are constructive on interest rate risks in many developed and emerging economies as global central banks reinforce accommodative monetary policy. We favor the U.S. dollar versus the Japanese yen, the Euro and other developed market currencies. Credit spreads should narrow from current levels as the markets gain confidence and the Treasury market stabilizes. preads offer more than adequate compensation for likely credit losses and a further rise in interest rates. Spreads have been pressured to pre-QE3 levels and mortgages look attractive at these higher levels as prepayment speeds slow.
The Fed's Prisoner Dilemma: Interest Rates Too Low for Too Long
by Mike Temple of Pioneer Investments,
The Prisoner Dilemma is based on the example of two prisoners who are told that if one testifies against the other, the one who testified will go free, but if both testify against the other, both will be jailed a conundrum about courses of action that dont result in the ideal outcome. We believe the Federal Reserve (Fed) will try to manage expectations so that the Treasury yield curve does not adjust too violently.
How Bonds Will Suffer Before the Fed Raises Rates
by Mike Temple of Pioneer Investments,
The Federal Reserves years-long zero-interest rate policy has flattened Treasury yields to where rising interest rates and inflation are almost assured manifestations. Investors may have to face the threat of rising bond yields. Damage to high quality, long-duration debt instruments would likely happen far in advance of a rise in interest rates with periods of significant volatility. What are the risks to portfolios? The first in a series of three papers that examines this questions is now available.
ING Fixed Income Perspectives June 2013
Fears of Fed tapering are overblown; we expect global funding conditions to remain easy. We continue to favor the U.S. dollar and are bearish on the euro and the yen; we are cautious on EM local currencies, as volatility is likely to persist.Spreads are appealing at current levels, with higher-quality industrials offering the most attractive risk/reward.
Driving with the Doors Off, Part II
About ten months ago, I wrote about my new bulldozer-yellow Jeep Wrangler, comparing the sensation of Driving with the Doors Off to investing in the New Normal, or as I like to call it, a slow growth for as far as the eyes can see environment. While the pavement had always been a mere twelve inches beneath my feet, Driving with The Doors Off made the experience far more real, far more alive, and far more aware of the risks that had always been there. In the New Normal it feels like we are always and everywhere just one small pothole away from the next economic disaster.
UK Secular Outlook - Morphing into the Carney Era
The UK remains in a stable disequilibrium, one that needs to either transform into growing economy with narrowing income differentials or risk a more aggressive policy response. Financial repression, protection of real purchasing power, tail risks of accelerated currency weakness and price sensitivity will likely dominate UK markets over the secular horizon. Investors may consider progressively reducing exposure to assets susceptible to tail risks. Higher quality short-dated income-generating, inflation-hedging and non-sterling assets remain attractive.
ING Fixed Income Perspectives May 2013
How do you like them apples? By pointing out some Excel blunders in the data of Harvard economists Reinhart and Rogoff, a UMass-Amherst grad student appears to have gotten their number and in the process discredited their seminal work touting the merits of austerity. Though Good Will Hunting fans may be amused to see a couple of Harvardians get their comeuppance, you don?t need the titular character?s wicked smarts to deduce that harsh government spending cuts may not be the best way to pick up your economy.
Deflation Is OverPlease Come Out
A blooper reel of 20th century history would likely include a feature on Japanese soldier Hiro Onoda. Posted to a small island in the Philippines during the waning days of World War II, when Onodas mission proved unsuccessful he was ultimately forced to flee into the woods, where he survived on a steady diet of coconuts and bananasfor almost 30 years after the end of the war.
Like Baseball in the Snow
As has occurred in each of the last three years, the economy should continue to plug along, not as we might like it to be, but as we can reasonably expect. Growth scare or not, we suspect that the end of 2013 will show that continued progress lies ahead, but perhaps not exactly in the same pattern as it has thus far.
F.I.R.S.T.: Bond Market Outlook
Amid heightened political uncertainty in Europe and subdued global growth expectations, global investors owe Hiroki Kuroda a big domo arigato for his pledge to inject about $1.4 trillion into the moribund Japanese economy by the end of 2014. The newly appointed BOJ governor?s unprecedented plan to buy Japanese government bonds,
What the Bull Giveth, the Bear Taketh Away
The question of whether to commit new funds to stocks here is nuanced and complex, not least because it isnt obvious that traditional alternatives - bonds or cash - offer any better value. We are very near all-time low interest rates across most developed government bond markets, credit spreads are near all-time tights, and rates are negative out to 5 or more years in real terms.
Valuation Based Equity Market Forecasts - Q1 2013 Update
Click to viewWe endorse the decisive evidence that markets and economies are complex, dynamic systems which are not reducible to normal cause-effect analysis. However, we are willing to acknowledge the likelihood that the future is likely to rhyme with the past. Thus, we believe there is substantial value in applying simple statistical models to discover average estimates of what the future may hold over meaningful investment horizons (10+ years), while acknowledging the wide range of possibilities that exist around these averages.
What's Next for U.S. and European Markets?
by Mike Temple of Pioneer Investments,
I was asked recently to provide some color around the state of global fixed income markets as we close out the first quarter of 2013. Of course, one of the more watched situations in the global markets has been Cypruss banking crisis. I wont go into too much depth on the subject here, as my colleague, Cosimo Marasciulo, has recently provided a comprehensive analysis.
F.I.R.S.T.: Made in the U.S.A.
Not just the preamble for the machine-wash-in-cold-water-and-eat-celery-only instructions on the inside of your skinny jeans, Made in the U.S.A. is a brand in vogue these days as the Stars and Stripes looks to dawn a manufacturing renaissance to go with that snazzy new housing recovery everyones been talking about.
What Happened to That Export-Led Recovery?
With nearly 50% of the UKs total exports going to Europe, an economic area constantly flirting with its own recession, it is no surprise to see that UK trade performance has been challenged.As the US continues to re-heal, and trade becomes more geographically diversified, we should see exports start to grow once more, albeit off a modest base. The easing in sterling is undoubtedly welcome and will improve prospects for exports, but it is unlikely to be a game changer.
Waiting on Weakness?
On Tuesday, March 5, The Dow Jones Industrial Average (DJIA) set a new record close at a level of 14,253.8 (old record of 14,164.5 was set on 10/09/07). Since then it has gone on to set four more consecutive record-closing highs. The S&P 500, at a closing level of 1556.2 on 3/11/13, is still about nine points shy of its record high of 1565.2 (also set on 10/09/07), but it is up seven days in a row and the odds of that occurring are about 1.17%.
Results 301–350
of 439 found.
