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Results 401–450
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Global Banks – Who Is Swimming Naked?
The outlook for most large banks around the world remains favorable, and one reason is that many global banks have been reporting unusually low non-performing loan disposal costs for a couple of years. Why? A financial crisis, like the one we had in 2008, is often followed by a period of low loan growth.
But there are some early warning signs of trouble brewing out there.
Global Growth Forecast - Q4 (Infographic)
by Rick Harrell of Loomis, Sayles & Co.,
The global economy is in the midst of a major rebalancing, and many themes we have tracked since the start of the year intensified during the third quarter. Every quarter, we update our forecast map. Read on for our global highlights.
Chart of the Week: Is It Time to Enjoy High Equity Risk Premiums?
The global average equity risk premium (ERP)–is 6.5%.This is good news for equity investors. With current low inflation across developed markets, the expected return from a portfolio of equities appears very attractive because earnings retention plus dividend yield is far above the sovereign bond yields, and also far above inflation in most markets.
Chart of the Week: Chinese Construction & Land Acquisition Falling
Over the last 10 years, the Chinese economy was drugged into growth through excessive amounts of investment. At its peak, capital expenditure made up 48% of GDP, an unprecedented level, and in my view, represented a massive misallocation of capital. Slowing levels of investment (mostly construction) have driven declines in related areas, including commodities, machinery and cement production.
Fed Leaves Interest Rates Unchanged: 4 Insights from Loomis Sayles
by Orla O'Brien of Loomis, Sayles & Co.,
The FOMC signaled that plans for interest rate normalization are deferred but not yet derailed. It's difficult to categorize this outcome as a genuine surprise. While the rate decision and accompanying policy statement were no doubt dovish relative to expectations, the so called 'dot plot' reveals that the median Fed member sees that interest rate normalization, once begun, is expected to proceed at the same pace as was expected in June.
The Smartphone Banking Revolution: Leaders of the Pack
By 2020 it is projected that 70% of the world’s population will own a smartphone - 1.2 billion smartphones were sold worldwide last year alone. Users increasingly rely on their smartphones for conducting a variety of daily activities including banking transactions. As retail banks respond to this shift toward mobile reliance, winners and losers are quickly emerging in the internet and app-based banking space.
Don't Panic: Putting Market Turbulence in Context
by Tom Fahey of Loomis, Sayles & Co.,
Sharp declines in China’s equity markets have heightened fears about the country’s economic prognosis and what it might mean for global growth. While concerns center on the emerging markets, the tumult has spilled across global financial markets. Our advice: don’t panic.
Global Growth Forecast - Q3 (Infographic)
by Rick Harrell of Loomis, Sayles & Co.,
Every quarter, we update our forecast map. What's different this time? We have shaved our US GDP forecast down to 2.3% from 2.9%, mostly on account of weaker exports, a strong dollar and the decline in oil prices. In emerging markets, we still believe Asia Pacific is currently a bright spot - but we expect China to slow further as easing measures fail to gain traction.
Mid-Year Commodities Update: Is It Time To Buy?
by Saurabh Lele of Loomis, Sayles & Co.,
Commodities have been falling, mainly due to concerns over the Chinese stock market crash, economic turmoil in Greece and the recent Iran nuclear deal. So could this be a good time to buy commodities? Not all of them. Here’s my updated forecast.
The Invisible Hand Clobbers the Shanghai Market – And the State Intervenes
Anything that goes up as fast as the Chinese stock market was bound to correct. The Shanghai Composite Index value doubled over the last seven months (December 2014 – July 2015) and the rise was not based on brightening fundamentals (the Chinese economy has been slowing for more than a year.)
Epic Uncertainty: Markets React to Greek Debt Crisis
by Laura Sarlo of Loomis, Sayles & Co.,
It's a tense standoff between Greece and its international creditors. Unless both sides dramatically return to the negotiating table, Greece looks set to default on its €1.5 billion International Monetary Fund (IMF) loan payment on June 30.
Emerging Market Currencies: All About That Base
by Esty Dwek of Loomis, Sayles & Co.,
The case for investing in emerging local currency debt over the long haul is well-documented: as developing countries improve productivity, their economies globalize and their currencies appreciate.But this is a long-term theory and the current reality may differ somewhat. Indeed, amid the current US dollar strength, many US dollar investors have been disappointed by EM local debt returns -- which have fallen more than 5% each year of the last two years. But what happens if we look at emerging market (EM) local debt returns through the lenses of different currencies?
Oil Prices: 4 Factors to Watch as Iran Increases Energy Exports
by Saurabh Lele of Loomis, Sayles & Co.,
Iran eagerly awaits the opportunity to escalate its oil exports. A final agreement on the country's nuclear capabilities is expected this summer: sanctions will start to be peeled back and Iran will be able to increase production. Within 12 -18 months, they will likely be producing an additional one million barrels per day. It’s also likely that Saudi Arabia, now producing well above its quota, will be called on by OPEC members to reduce its production in order to accommodate Iran's higher output.
China is Choking on its Own Debt
We have it on good authority. And in this case that authority is an unlikely source – the People’s Bank of China (PBoC). It’s difficult to remember the last time so many paid so little attention to something so vitally important. The revelation came in the bank’s release of its 1Q 2015 Monetary Policy Report on 8 May 2015.
Refrigerator vs. Restaurant: Where Are US Consumers Spending More?
A very interesting detail from April's retail sales report – for the first time in US history, consumer spending at restaurants and bars exceeded spending at grocery stores. In March, Americans spent $50.4 billion in restaurants and bars versus $50.1 billion in grocery stores.
Emerging Markets Winners and Losers: Q1 2015
2015 kicked off with a rocky start for emerging markets: pending US rate hikes, falling commodity prices, quantitative easing in Europe, and idiosyncratic country risks all soured investor sentiment and caused the US dollar to soar. This led to substantial weakness in emerging market (EM) foreign exchange, pummeling US-based investors in many local currency bond markets. Despite that pain, EM credit performed well, and along with EM sovereign debt, posted positive gains.
Bank Loans Are the Tortoise, Not the Hare
The global financial crisis did not change the nature of bank loans. Bank loans were specifically designed by bankers to resist the forces that drive volatility in most other asset classes. Bankers designed bank loans to reduce the volatility that comes along with changes in interest rates and company values, so they insisted that loans have floating coupons and that they be senior and secured.
The Dollar and the Fed: A Love-Hate Relationship
by Rick Harrell of Loomis, Sayles & Co.,
The US job market continues to plow ahead, leading many to believe Fed rate hikes are coming later this year. However, the pace of hikes may be slower than expected. The Fed is facing a “dollar dilemma” as it evaluates US economic outperformance.
5 Charts: The Troublesome Trajectory of Student Loans
Although many seem focused on the dangers posed by the recent growth of subprime auto loans, we believe a major looming threat to consumers is coming from student loans. The increasing level of student debt on the millennial generation raises concerns about its sustainability and the impact it may have on known consumer behavior patterns.
Growth in the Euro Zone: Europeans Consuming Again
by Laura Sarlo of Loomis, Sayles & Co.,
Euro area growth appears set to outperform in 2015, thanks in part to a stronger consumer. Consumers are feeling more confident about their own economies, and in some spots, job growth and wage increases provide an additional boost. Here are some of the major consumer trends I have noticed across the euro zone.
US Economy: Cooler Than Consensus
The rebound is over, and we can’t just blame the dreadful winter weather. Much recent data have been disappointing. Even though I believe they are not bad enough to be recessionary signals, they do suggest that the recovery going forward may be a bit blander than hoped.
Three Surveys Show US Consumers Feeling Friskier
US consumers are feeling friskier according to recent data. Consumers appear to have, at long last, shaken off the “blues” they suffered on account of the severe recession of 2007-2009 and the subsequent slow recovery. I don’t think we can attribute the improved consumer outlook to any one factor, but rather from a combination of factors: over a year of solid payroll growth, improving wage gains, a plunge in gasoline prices, rising stock and house prices, and low interest rates.
Oil Prices: The Petro Plunge Continues in January 2015
Crude oil spot prices have dropped in a straight line to around $50 per barrel with no semblance of consolidation since the second half of 2014. In the near-term, weak supply/demand balance, high inventory, poor demand and a risk-averse investor could mean that oil prices will remain depressed.
2014 Outlook: The Emergence of a Global Expansion
by Team of Loomis, Sayles & Co.,
After years of a global recovery characterized by fits and starts, we expect more synchronized global growth in 2014. Global GDP growth will accelerate modestly from 2.7% in 2013 to approximately 3.4% in 2014, primarily driven by larger advanced economies. In particular, we are optimistic that US growth will be sustainable. The fading economic drag from government policy and the ongoing housing recovery should help boost US GDP growth toward 3% as the year progresses. The UK is poised for a similar rate of expansion in 2014, and Europe will likely post positive growth in the coming year.
Bond Market Review & Outlook
by Thomas Fahey of Loomis, Sayles & Co.,
Flip-flopping Federal Reserve (Fed) policy defined the third quarter. Last quarter, the Fed threw the markets a curve ball by announcing possible tapering of its large-scale asset purchases beginning this year. That ?taper talk? set off a mini-riot in global bond markets. Many emerging market (EM) countries, like Brazil, India, Indonesia and South Africa, were the biggest victims, as their bond yields rose and their currencies crashed.
Equity Market Review & Outlook
Equities generally performed well across the board in the third quarter. The S&P 500 Indexs solid 5.24% return built on strong gains from earlier in the year. The Index has returned more than 19% through September, surpassing expectations at the start of the year. Slow but steady economic growth in the US, support from the Federal Reserve (the Fed), and more recently, signs of potentially better growth in Europe and Asia have been important positive catalysts.
Defining the EM Corporate Bond Opportunity
by Elisabeth Colleran, Peter Frick, Peter Marber, David Rolley, Edgardo Sternberg of Loomis, Sayles & Co.,
Finance is a numbers business. Investors study prices, yields, rates of return. However, when it comes to sizing up emerging markets, we think they should also pay attention to semantics. In the past, terming a country emerging made it synonymous with low credit quality and higher risk. But today, many emerging markets boast strong credit profiles while parts of the developed world buckle under heavy debt loads.
Seeking Global Growth: Our Outlook for Credit
Global business and credit cycles are nothing new to investors. The familiar sequence of recession, recovery, expansion and slowdown plays out over time, influencing interest rates, credit availability, business climate and capital markets. Its a time-honored process, but in practice, no two business and credit cycle pairings are exactly alike. Business and credit cycles tend to be driven by specific but varying factors that accumulate until an economic tipping point is reached, after which the business and credit climates deteriorate.
Covenant-Lite Loans: Credit Quality Is Still the Dominant Factor
As portfolio managers for bank loan products at Loomis Sayles, we are often asked about covenant-lite bank loans, and in particular whether they represent a dangerous trend that suggests loans are overheated and should be avoided. This paper describes our views on what covenant-lite loans are and are not; it is based more on reasoning and experience than proof, because covenant-lite loans have not been offered over a long enough period to establish a meaningful fact pattern.
Bond Market Review & Outlook
by Thomas Fahey of Loomis, Sayles & Co.,
The first quarter of 2013 turned out pretty much as expected: a low volatility environment with the level of bond yields and credit spreads relatively stable. At some point, we have to be happy with earning a yield on our fixed income investments. The last several years have been a major bond bull market, particularly 2012, but with yields at low levels, there is not much room left for bond price appreciation and we should be comfortable with earning our yield and carry.
A Continuing Case for Dividends
The investment case for dividend-paying stocks is as strong as ever. Many dividend-paying stocks continue to boast yields comparable to or higher than US Treasurys, and the case for dividend growth in the years ahead remains favorable. Dividends have a long history as a significant component of total return, and investors will likely continue to press for rising payouts since corporate balance sheets are flush with cash. What should investors consider as they survey the universe of dividend-paying companies?
Bond Market Review & Outlook
by Thomas Fahey of Loomis, Sayles & Co.,
The ?nal quarter of 2012 was the icing on the cake of an exceptional year for the credit sectors. Fourth quarter credit gains stemmed in part from uncommonly aggressive monetary policy responses in the third quarter. As economic growth continued to undershoot expectations, major central banks made clear that they were dissatis?ed with the status quo of tepid economic growth and high unemployment. The Federal Reserve went so far as to tie its monetary policy to the level of the unemployment rate.
Equity Market Review & Outlook
While the S&P 500 Index posted a slightly negative fourth-quarter return, the Index's 16.0% return for all of 2012 was notable in the face of a long list of global fundamental concerns. Midcap and small cap stocks performed better during the ?nal three months of the year, posting gains of roughly 2.0%-3.0%. The fourth quarter outperformance of smaller stocks was enough to overtake the S&P 500 for the year, but just fractionally.
Where Are We in the Boom/Bust Liquidity Cycle?
by Thomas Fahey of Loomis, Sayles & Co.,
In an often cynical world, standard ?nancial and macroeconomic quantitative models give people the bene?t of the doubt. Fundamental economic theory assumes the best of us, supposing that human beings are perfectly rational, know all the facts of a given situation, understand the risks, and optimize our behavior and portfolios accordingly. Reality, of course, is quite different.
Obstacles to a Lasting Recovery: The Liquidity, Hesitancy & Solvency Traps
by Thomas Fahey of Loomis, Sayles & Co.,
Those familiar symptoms are back again to start the summer: risk aversion; falling equity prices; rising volatility; record-low German and US government bond yields; wider credit spreads; a European country getting picked on; and a stronger US dollar. We have seen this bad movie twice before, during the summers of 2010 and 2011.
Equity Market Review & Outlook
Global equity markets performed well in the third quarter after posting modest losses in the second quarter. The soft second quarter, which followed back-to-back double-digit quarterly gains, proved to be a pause rather than a signal that the equity bull market was ending. Though defensive sectors garnered favor in the second quarter, economically sensitive sectors have generally led performance this year, with technology, financials and consumer discretionary topping the list year to date.
Bond Market Review & Outlook
by Thomas Fahey of Loomis, Sayles & Co.,
Aggressive policy responses from major central banks were dominant forces in the third quarter. The European Central Bank (ECB), Federal Reserve (Fed), Bank of Japan (BoJ) and other central banks took decisive action, prompted by the escalating European sovereign debt crisis, slowing global growth, ?nancial market volatility, and the impending US "?scal cliff."
House Prices on the Rise
by Dmitri Rabin of Loomis, Sayles & Co.,
After four years of consecutive declines, US housing prices appear to be stabilizingand even beginning to rise. While we expect the recovery to be slow and geographically uneven, we do believe that US house prices bottomed in the first quarter of 2012 and could grow approximately 2-3% per year through 2015. In our view, these slow increases in house prices will gradually help consumers repair their balance sheets and increase demand for housing, supporting homebuilders and other housing-related industries.
Results 401–450
of 495 found.