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SVB Asset Management is pleased to announce the release of the Q1 2013 Economic Booklet as a research piece summarizing the macro-economic and sector trends in the global market. The Economic Booklet is our reference tool for clients. Displaying graph and chart views of the global economy, this piece guides clients through factors that impact their business. Some highlights from the Economic Report include:
• The Fed has taken a strong stance that it will continue with quantitative easing until unemployment improves substantially with a 6.5% target and as long as inflation in contained below 2.5%.
• Growth continues to be anemic despite the Fed’s aggressive pump of liquidity into the economy. Q4 GDP expanded at a dismal 0.4% due to cuts in defense spending and inventory.
• There has been no acceleration in employment the last two years. There were 2.10M and 2.12M jobs added in 2011 and 2012, respectively. This is evidence of diminished returns of monetary policy.
• Average jobs added in Q1 were 148K and the unemployment rate at the end of Q1 was 7.6%. The lower rate was due to the lowest participation rate in over 30 years.
• Bond investors remain bullish as long-term yields remain relatively unchanged over the past year.
• The US Dollar: Has benefited from economy woes in Europe and the UK and the prospects of further easing by the BOJ. 10-year yields have drifted from 1.76 at the end of December to 2.02 as of March 13, 2013.
• Dodd Frank started with 2300 pages and has metastasized to 8843 pages and will continue to grow.