The document discusses the outlook for the global economy in 2012. It predicts that US GDP growth will accelerate to 2.0-2.5% in the second half of the year, helped by improving housing, employment, and consumer demand. It also discusses the outlook for other major economies like the Eurozone, Japan, and China, noting continued challenges from the European debt crisis but also the use of monetary and fiscal policy tools to support growth. Key investment implications include overweighting equities and shifting exposure to non-US markets.
Global synchronization provide upward bias to Equity based investments once again. In depth look at how Janney breaks down the year ahead and where to invest to take advantage of the reemergence of Global Growth.
Dark clouds were gathering on the horizon for the Indian economy in 2020 according to the document. After a period of disruption and reset in the economic paradigm since 2019, growth was expected to remain below 6% with high inflation and volatility in the markets. Globally as well, economic growth was projected to slow down with increased uncertainties. The investment strategy recommended remaining risk averse with an underweight allocation to equities and overweight allocation to precious metals and debt.
The document summarizes the global economic meltdown that began in 2008. It discusses recessions and depressions, the history of the Great Depression, and factors that led to the 2008 crisis such as the housing bubble and subprime lending. It describes the impact on various sectors in India as well as government initiatives to stimulate the economy. While conditions have improved, certain sectors remain affected. The conclusion emphasizes learning from the crisis and the need for continued monitoring of economic conditions.
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]Gary Crosbie
- Economic growth in 2011 was sluggish at around 1.7% GDP, below the level needed to significantly reduce the unemployment rate. While some improvements were seen, job growth and the labor participation rate remained problematic.
- The Federal Reserve implemented several quantitative easing programs aimed at stimulating growth by lowering interest rates and increasing liquidity, but these have had limited success in spurring lending and investment.
- Continued policy uncertainty around taxes, regulations, healthcare, and the European fiscal crisis have contributed to risk aversion among businesses and investors, limiting hiring and capital expenditures. The economic outlook for 2012 remains tepid.
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]Gary Crosbie
The document provides an economic summary and analysis of the 2011 4th quarter. It finds that while some economic indicators showed improvement, overall growth remained sluggish. GDP growth increased in 2011 but was still lower than in 2009-2010. Job growth improved but remained insufficient to significantly lower the unemployment rate. The recovery has been much weaker than past post-WWII recessions. Uncertainty around fiscal policy, taxes, and regulations has hindered business investment and hiring. Overall the economic outlook remains tepid with growth expected around 2% for 2012 and unemployment remaining elevated.
Monetary Policy Definition
Fiscal Policy Definition
Difference between them
Inflation
Bank reserve ratio
Open market operation
Repo & Reserve repo rates
Cash reserve ratio
Statutory liquid ratio
Factors affecting
Impact
Limitation
Overall domestic equity market outlook – marginally positive, expect benchmark indices to continue moving in a narrow range in near term
Currency outlook – Stable, expect INR to average 70-71 for the year
Rate outlook – expect more easing
Global synchronization provide upward bias to Equity based investments once again. In depth look at how Janney breaks down the year ahead and where to invest to take advantage of the reemergence of Global Growth.
Dark clouds were gathering on the horizon for the Indian economy in 2020 according to the document. After a period of disruption and reset in the economic paradigm since 2019, growth was expected to remain below 6% with high inflation and volatility in the markets. Globally as well, economic growth was projected to slow down with increased uncertainties. The investment strategy recommended remaining risk averse with an underweight allocation to equities and overweight allocation to precious metals and debt.
The document summarizes the global economic meltdown that began in 2008. It discusses recessions and depressions, the history of the Great Depression, and factors that led to the 2008 crisis such as the housing bubble and subprime lending. It describes the impact on various sectors in India as well as government initiatives to stimulate the economy. While conditions have improved, certain sectors remain affected. The conclusion emphasizes learning from the crisis and the need for continued monitoring of economic conditions.
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]Gary Crosbie
- Economic growth in 2011 was sluggish at around 1.7% GDP, below the level needed to significantly reduce the unemployment rate. While some improvements were seen, job growth and the labor participation rate remained problematic.
- The Federal Reserve implemented several quantitative easing programs aimed at stimulating growth by lowering interest rates and increasing liquidity, but these have had limited success in spurring lending and investment.
- Continued policy uncertainty around taxes, regulations, healthcare, and the European fiscal crisis have contributed to risk aversion among businesses and investors, limiting hiring and capital expenditures. The economic outlook for 2012 remains tepid.
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]Gary Crosbie
The document provides an economic summary and analysis of the 2011 4th quarter. It finds that while some economic indicators showed improvement, overall growth remained sluggish. GDP growth increased in 2011 but was still lower than in 2009-2010. Job growth improved but remained insufficient to significantly lower the unemployment rate. The recovery has been much weaker than past post-WWII recessions. Uncertainty around fiscal policy, taxes, and regulations has hindered business investment and hiring. Overall the economic outlook remains tepid with growth expected around 2% for 2012 and unemployment remaining elevated.
Monetary Policy Definition
Fiscal Policy Definition
Difference between them
Inflation
Bank reserve ratio
Open market operation
Repo & Reserve repo rates
Cash reserve ratio
Statutory liquid ratio
Factors affecting
Impact
Limitation
Overall domestic equity market outlook – marginally positive, expect benchmark indices to continue moving in a narrow range in near term
Currency outlook – Stable, expect INR to average 70-71 for the year
Rate outlook – expect more easing
The current crisis is unprecedented in the sense that it has seriously impacted the liquidity, solvency and viability of a large number of businesses, all at the same time. The only way out of this crisis is to inflate a colossal bubble in asset prices, which is equally unprecedented. A global bubble will inflate in healthcare sector. far bigger and durable than the dotcom and subprime bubbles, as it deals with human lives directly. The politicians, bankers, investors, policy makers, administrators, businessmen, consumers et. al. who have spent weeks locked down in their houses fearing for their lives while watching the death statistics on media, would readily accept the need for much higher investment and spending on healthcare. In that sense, this bubble will be far more tangible, believable, acceptable and inflatable.
The Reserve Bank of India (RBI) is India's central monetary authority that controls the supply of money in the economy through its monetary policy. The objectives of RBI's monetary policy are to maintain price stability and achieve high economic growth. Some key aspects of India's monetary policy include the Monetary Policy Committee that decides the repo rate, instruments like open market operations, cash reserve ratio, and statutory liquidity ratio that control money supply, and a focus on price stability, controlled credit expansion, and promoting efficiency.
The Reserve Bank of India (RBI) controls the monetary policy of India with the objectives of maintaining price stability and promoting high economic growth. RBI exercises control over interest rates and money supply in the economy. Some key aspects of India's monetary policy include controlled expansion of bank credit, maintaining price stability, restricting inventories, directing credit to priority sectors, promoting an equitable distribution of credit, and using monetary policy tools like open market operations, cash reserve ratios, and repo rates to influence money supply and credit conditions. The overall aims of monetary policy are to promote economic development, maintain reasonable price stability, and facilitate a favorable environment for growth.
Rania Al-Mashat - Minister of Tourism
ERF 24th Annual Conference
The New Normal in the Global Economy: Challenges & Prospects for MENA
July 8-10, 2018
Cairo, Egypt
Current fiscal and monetary industrial policy in india revisedFBS Business School
Monetary and fiscal policies are two important instruments that can be put to use by government in order to achieve stability in the economy.While monetary policy is implemented by RBI, the fiscal policy is implemented by the government.
The document discusses how interest rates have behaved since the financial crisis and makes several predictions:
1) Tapering of quantitative easing by the Federal Reserve is likely to lower interest rates as investors flee to safety in bonds, increasing bond prices and lowering yields.
2) Previous tapers have weakened the economy, pushing interest rates lower, and ending quantitative easing and zero interest rate policies may end the long but fragile economic expansion.
3) Interest rates will remain low due to disinflationary forces like low wage growth and money hoarding offsetting increases to the money supply.
4) The document predicts the Fed's balance sheet will remain above 2011 levels until 2020 and policy rates will
The document discusses monetary policy in India. It begins by defining monetary policy as the process by which a central bank like the Reserve Bank of India controls money supply to maintain price stability and economic growth. It then outlines the objectives of India's monetary policy and the major monetary policy tools and operations used by RBI like cash reserve ratio, statutory liquidity ratio, and bank rate. It further discusses the role of monetary policy in developing economies like India and some obstacles to effective monetary policy implementation. Finally, it notes some recent changes to RBI's monetary policy approach including using multiple indicators instead of just money supply targets and reducing required reserve ratios to boost lending.
Monetary policy refers to how central banks use tools like interest rates, money supply, and credit conditions to achieve goals like price stability, economic growth, and unemployment control. The main tools are quantitative and qualitative credit controls. Quantitative controls directly target money supply through interest rates, open market operations, and reserve requirements. Qualitative controls influence credit allocation through margin requirements, credit rationing, and differential interest rates. Monetary policy can be expansionary by increasing money supply to boost economic activity, or contractionary by decreasing money supply to curb inflation.
The document discusses India's monetary policy and operations. It provides an overview of the major tools and objectives of monetary policy in India, including open market operations, cash reserve ratio, statutory liquidity ratio, bank rate policy, credit ceilings, moral suasion, marginal standing facility, repo rate, and reverse repo rate. It also summarizes the Urjit R. Patel Committee report and its recommendations to target consumer price index for inflation. The conclusion emphasizes that monetary policy must be coordinated with fiscal policy for maximum economic stability and growth.
This document summarizes a study that analyzes the relationship between domestic savings and economic growth in Nigeria from 1970 to 2006. It finds that while domestic savings as a percentage of GDP has generally been higher than investment, economic growth has remained low. It concludes that the main problem is not mobilizing savings, but rather the intermediation between savings and investment. It recommends that the government adopt policies to improve intermediation in the economy in order to enhance the link between savings and growth.
This document discusses monetary policy and fiscal policy in India. It defines monetary policy as steps taken by the Reserve Bank of India to regulate money supply, credit availability, and interest rates. The objectives of monetary policy include full employment, price stability, economic growth, and balance of payments stability. Tools of monetary policy discussed include bank rate, cash reserve ratio, open market operations, and selective credit controls. Fiscal policy is defined as the government's tax and spending policies. The objectives of fiscal policy are to influence aggregate demand and achieve economic goals like employment and investment. Types of fiscal policy tools covered are tax policy, government expenditure, and public borrowing.
Below please find a link to our monthly market perspective piece for December. This month we examine the impacts of the rapidly changing low interest rate environment.
Monetary policy is used by central banks to control the supply of money and regulate credit in order to promote economic growth and stability. There are two types: expansionary policy aims to reduce unemployment by increasing the money supply during recessions, while contractionary policy aims to reduce inflation by decreasing the money supply during expansions. The tools for changing the money supply include open market operations, interest rates, and reserve ratios.
The document discusses interest rates and inflation trends over recent decades and their impact on mortgage rates, bond yields, and retirement savings. It notes that while rates had declined significantly since the 1970s and 1980s, inflation has remained low in recent years, averaging just 1.7% over the past three years. This has led some to question whether the current low rate environment represents a "new normal." The document examines various economic factors that could influence the direction of future rate changes, such as wage growth, unemployment levels, and actions by the Federal Reserve.
The document summarizes a presentation by Travis Fling, Chief Economist at the Madison County Chamber of Commerce, on current leading economic indicators and unemployment. Fling discusses national and global economic factors, components of the US economy like GDP and consumer spending, leading economic indicators for the US, Ohio, and Madison County, and offers advice to business owners on managing through the economic recession.
The Reserve Bank of India uses various monetary policy instruments to achieve its objectives of price stability and economic growth. These include varying reserve ratios like the cash reserve ratio, using open market operations to purchase and sell government securities, and adjusting policy rates like the discount rate. The ultimate goals of monetary policy are to influence total spending, inflation, and other macroeconomic indicators through acting on monetary aggregates and interest rates. In recent decades, the RBI's monetary policy has focused on stabilizing inflation and liberalizing the economy.
Based on our scuttlebutt and feedback from industry sources and ground views of experts regarding the current state of affairs in India due to Coronavirus lockdown, We shall now present our thoughts on investment strategy for post lock down period.
this presentation is currently have this upload set to Public. This means that it will be indexed by search engines and view able by anyone on the web.
This document discusses the impact of loose global monetary policy on economic growth and equity markets since the 2008 financial crisis. Central banks around the world expanded their balance sheets significantly through measures like quantitative easing to stimulate their economies. This monetary expansion appears highly correlated with rising asset prices and market performance. However, as interest rates are expected to rise, the effects of tightening monetary policy on market volatility and asset price appreciation require careful portfolio positioning.
The document discusses the positive economic impacts of the U.S. energy renaissance driven by increased production of shale gas and tight oil. It notes that this energy boom has led to over 1 million new jobs, billions in tax revenues, energy independence and security, lower energy costs for consumers and businesses, and reduced greenhouse gas emissions. The low natural gas prices are fueling a manufacturing resurgence in the U.S. and billions in new investment. Overall the energy renaissance presents many reasons for economic optimism going forward.
This document provides information to help plan for a financially secure retirement. It discusses important questions to consider, such as saving enough and having realistic spending goals. It also outlines risks like longevity, inflation, market uncertainty and illness that are hard to control. The document emphasizes the importance of retirement planning and monitoring expenses, income sources, asset allocation and withdrawals over time to adapt to changes. The overall message is to carefully assess savings, income needs, guaranteed versus non-guaranteed income sources and use tools like annuities to optimize securing a stable retirement.
The current crisis is unprecedented in the sense that it has seriously impacted the liquidity, solvency and viability of a large number of businesses, all at the same time. The only way out of this crisis is to inflate a colossal bubble in asset prices, which is equally unprecedented. A global bubble will inflate in healthcare sector. far bigger and durable than the dotcom and subprime bubbles, as it deals with human lives directly. The politicians, bankers, investors, policy makers, administrators, businessmen, consumers et. al. who have spent weeks locked down in their houses fearing for their lives while watching the death statistics on media, would readily accept the need for much higher investment and spending on healthcare. In that sense, this bubble will be far more tangible, believable, acceptable and inflatable.
The Reserve Bank of India (RBI) is India's central monetary authority that controls the supply of money in the economy through its monetary policy. The objectives of RBI's monetary policy are to maintain price stability and achieve high economic growth. Some key aspects of India's monetary policy include the Monetary Policy Committee that decides the repo rate, instruments like open market operations, cash reserve ratio, and statutory liquidity ratio that control money supply, and a focus on price stability, controlled credit expansion, and promoting efficiency.
The Reserve Bank of India (RBI) controls the monetary policy of India with the objectives of maintaining price stability and promoting high economic growth. RBI exercises control over interest rates and money supply in the economy. Some key aspects of India's monetary policy include controlled expansion of bank credit, maintaining price stability, restricting inventories, directing credit to priority sectors, promoting an equitable distribution of credit, and using monetary policy tools like open market operations, cash reserve ratios, and repo rates to influence money supply and credit conditions. The overall aims of monetary policy are to promote economic development, maintain reasonable price stability, and facilitate a favorable environment for growth.
Rania Al-Mashat - Minister of Tourism
ERF 24th Annual Conference
The New Normal in the Global Economy: Challenges & Prospects for MENA
July 8-10, 2018
Cairo, Egypt
Current fiscal and monetary industrial policy in india revisedFBS Business School
Monetary and fiscal policies are two important instruments that can be put to use by government in order to achieve stability in the economy.While monetary policy is implemented by RBI, the fiscal policy is implemented by the government.
The document discusses how interest rates have behaved since the financial crisis and makes several predictions:
1) Tapering of quantitative easing by the Federal Reserve is likely to lower interest rates as investors flee to safety in bonds, increasing bond prices and lowering yields.
2) Previous tapers have weakened the economy, pushing interest rates lower, and ending quantitative easing and zero interest rate policies may end the long but fragile economic expansion.
3) Interest rates will remain low due to disinflationary forces like low wage growth and money hoarding offsetting increases to the money supply.
4) The document predicts the Fed's balance sheet will remain above 2011 levels until 2020 and policy rates will
The document discusses monetary policy in India. It begins by defining monetary policy as the process by which a central bank like the Reserve Bank of India controls money supply to maintain price stability and economic growth. It then outlines the objectives of India's monetary policy and the major monetary policy tools and operations used by RBI like cash reserve ratio, statutory liquidity ratio, and bank rate. It further discusses the role of monetary policy in developing economies like India and some obstacles to effective monetary policy implementation. Finally, it notes some recent changes to RBI's monetary policy approach including using multiple indicators instead of just money supply targets and reducing required reserve ratios to boost lending.
Monetary policy refers to how central banks use tools like interest rates, money supply, and credit conditions to achieve goals like price stability, economic growth, and unemployment control. The main tools are quantitative and qualitative credit controls. Quantitative controls directly target money supply through interest rates, open market operations, and reserve requirements. Qualitative controls influence credit allocation through margin requirements, credit rationing, and differential interest rates. Monetary policy can be expansionary by increasing money supply to boost economic activity, or contractionary by decreasing money supply to curb inflation.
The document discusses India's monetary policy and operations. It provides an overview of the major tools and objectives of monetary policy in India, including open market operations, cash reserve ratio, statutory liquidity ratio, bank rate policy, credit ceilings, moral suasion, marginal standing facility, repo rate, and reverse repo rate. It also summarizes the Urjit R. Patel Committee report and its recommendations to target consumer price index for inflation. The conclusion emphasizes that monetary policy must be coordinated with fiscal policy for maximum economic stability and growth.
This document summarizes a study that analyzes the relationship between domestic savings and economic growth in Nigeria from 1970 to 2006. It finds that while domestic savings as a percentage of GDP has generally been higher than investment, economic growth has remained low. It concludes that the main problem is not mobilizing savings, but rather the intermediation between savings and investment. It recommends that the government adopt policies to improve intermediation in the economy in order to enhance the link between savings and growth.
This document discusses monetary policy and fiscal policy in India. It defines monetary policy as steps taken by the Reserve Bank of India to regulate money supply, credit availability, and interest rates. The objectives of monetary policy include full employment, price stability, economic growth, and balance of payments stability. Tools of monetary policy discussed include bank rate, cash reserve ratio, open market operations, and selective credit controls. Fiscal policy is defined as the government's tax and spending policies. The objectives of fiscal policy are to influence aggregate demand and achieve economic goals like employment and investment. Types of fiscal policy tools covered are tax policy, government expenditure, and public borrowing.
Below please find a link to our monthly market perspective piece for December. This month we examine the impacts of the rapidly changing low interest rate environment.
Monetary policy is used by central banks to control the supply of money and regulate credit in order to promote economic growth and stability. There are two types: expansionary policy aims to reduce unemployment by increasing the money supply during recessions, while contractionary policy aims to reduce inflation by decreasing the money supply during expansions. The tools for changing the money supply include open market operations, interest rates, and reserve ratios.
The document discusses interest rates and inflation trends over recent decades and their impact on mortgage rates, bond yields, and retirement savings. It notes that while rates had declined significantly since the 1970s and 1980s, inflation has remained low in recent years, averaging just 1.7% over the past three years. This has led some to question whether the current low rate environment represents a "new normal." The document examines various economic factors that could influence the direction of future rate changes, such as wage growth, unemployment levels, and actions by the Federal Reserve.
The document summarizes a presentation by Travis Fling, Chief Economist at the Madison County Chamber of Commerce, on current leading economic indicators and unemployment. Fling discusses national and global economic factors, components of the US economy like GDP and consumer spending, leading economic indicators for the US, Ohio, and Madison County, and offers advice to business owners on managing through the economic recession.
The Reserve Bank of India uses various monetary policy instruments to achieve its objectives of price stability and economic growth. These include varying reserve ratios like the cash reserve ratio, using open market operations to purchase and sell government securities, and adjusting policy rates like the discount rate. The ultimate goals of monetary policy are to influence total spending, inflation, and other macroeconomic indicators through acting on monetary aggregates and interest rates. In recent decades, the RBI's monetary policy has focused on stabilizing inflation and liberalizing the economy.
Based on our scuttlebutt and feedback from industry sources and ground views of experts regarding the current state of affairs in India due to Coronavirus lockdown, We shall now present our thoughts on investment strategy for post lock down period.
this presentation is currently have this upload set to Public. This means that it will be indexed by search engines and view able by anyone on the web.
This document discusses the impact of loose global monetary policy on economic growth and equity markets since the 2008 financial crisis. Central banks around the world expanded their balance sheets significantly through measures like quantitative easing to stimulate their economies. This monetary expansion appears highly correlated with rising asset prices and market performance. However, as interest rates are expected to rise, the effects of tightening monetary policy on market volatility and asset price appreciation require careful portfolio positioning.
The document discusses the positive economic impacts of the U.S. energy renaissance driven by increased production of shale gas and tight oil. It notes that this energy boom has led to over 1 million new jobs, billions in tax revenues, energy independence and security, lower energy costs for consumers and businesses, and reduced greenhouse gas emissions. The low natural gas prices are fueling a manufacturing resurgence in the U.S. and billions in new investment. Overall the energy renaissance presents many reasons for economic optimism going forward.
This document provides information to help plan for a financially secure retirement. It discusses important questions to consider, such as saving enough and having realistic spending goals. It also outlines risks like longevity, inflation, market uncertainty and illness that are hard to control. The document emphasizes the importance of retirement planning and monitoring expenses, income sources, asset allocation and withdrawals over time to adapt to changes. The overall message is to carefully assess savings, income needs, guaranteed versus non-guaranteed income sources and use tools like annuities to optimize securing a stable retirement.
Investment outlook piece describing the Feed the World Theme. This will help to provide you with some insight in how to invest to take advantage of forth coming trends.
The document discusses the implications of the Affordable Care Act on individuals, employers, and the healthcare industry. It finds that the Act will provide coverage to around 30 million uninsured Americans through Medicaid expansion and insurance subsidies. For individuals, there will be a penalty for not obtaining coverage starting in 2014. Employers with over 50 employees will face a penalty starting in 2015 if they do not provide affordable coverage. The healthcare industry will see both costs and revenues impacted, with insurers expected to gain many new customers but also facing new regulations, and hospitals losing some funding but gaining new insured patients. Overall the impacts are viewed as manageable for most employers and positive for the healthcare sector in the long run.
The document discusses China's rapid economic growth over the past few decades and analyzes its future prospects and challenges. It notes that while China faces issues like debt and excess industrial capacity, the risks of a "hard landing" are remote. China is at a critical turning point as it transitions from an export/investment-led model to one based more on domestic consumption. Continued urbanization and development of inland provinces provide significant potential for future growth as China catches up to more advanced economies. Reform measures recently announced by China's new leadership may lead to investment opportunities from economic changes.
This document discusses how changing US demographics, specifically the aging Baby Boomer generation and coming of age Millennials, will impact the economy and stock market in coming decades. It finds that while retiring Baby Boomers will slow economic growth, Millennials are a larger population now entering their peak spending years, supplemented by Generation X, providing strong economic demand to offset declining Baby Boomer consumption. Certain industries like housing and autos are positioned to benefit from these demographic tailwinds. Student loan debt is high but should not cause a financial crisis due to key differences from the mortgage crisis. The economy is projected to grow around 2.1% annually over the next decade due to demographic factors.
This document discusses the importance of investing to maintain purchasing power in the face of inflation. It argues that many investors' goal should be to grow their capital at a rate that matches or exceeds inflation. Stocks that pay dividends are presented as a solution, as they can provide income that increases over time to outpace inflation. Several large, stable companies are used as examples that have consistently raised their dividends by over 10% annually for the past decade, demonstrating how purchasing power can be achieved through dividend-paying stocks.
This document discusses web API test automation using Frisby, a Node.js framework. It provides an introduction to web APIs and the differences between SOAP and REST. The objectives are to understand web APIs, differentiate SOAP and REST, learn common API test tools, and develop API test automation with Frisby and Node.js. Frisby methods like Get(), Post(), Put(), and Delete() are demonstrated along with expectations like expectStatus() and expectJSON(). Challenges with Frisby like documentation, debugging, and asynchronous calls are addressed. A case study is presented on SHIFT ASIA's methodology incorporating Frisby into their automated API testing.
Lanyrd Pro is an event marketing and management tool that helps companies maximize their impact at events. It allows companies to create branded public profiles and event calendars, showcase employee expertise at conferences, and promote their brand. Lanyrd Pro gives insights into a company's event strategy through analytics and helps increase brand exposure to thousands of event attendees. It provides visibility of a company's event presence and helps plan future event marketing.
Lanyrd is now integrated with Eventbrite to allow users to connect their accounts and automatically sync event attendance between the two platforms. This will help users network with other attendees before and after events more effectively by tying their profiles together across services.
The document summarizes recent market indicators and economic trends:
- Volatility has decreased this year as markets reach new highs, though uncertainty can rise temporarily. Investors should stay disciplined.
- Major central banks are keeping interest rates low and expanding their balance sheets to support economic growth.
- Declining labor force participation, retiring baby boomers, technology advances, and globalization are long-term factors impacting the job market.
- Job openings remain high as companies hire in anticipation of future demand.
- Inflation has begun to increase as the economy reaches new peaks following the Federal Reserve's actions to support markets.
The Power-point discusses the macroeconomics of china. It discusses the inflation, unemployment in china, fiscal and monetary policy of china and the foreign exchange rate mechanism of china. It also discusses what can be the endgame for china for changing in its policy.
Below please find a link to our monthly market perspective piece for December. This month we explore a variety of factors potentially driving markets and evaluate the risks and rewards lying beneath the surface.
The document provides an economic forecast from the group "Too Big to Fail" (TBTF) for 2014. It predicts:
- Minimal short-term economic growth of 2.0% GDP for 2014, driven by increases in personal consumption and investment as consumer confidence and demand rise.
- A decrease in the unemployment rate to 6.3% alongside a drop in labor force participation to 62.5% despite improvements in the job market.
- Inflation of around 1.3% for core and headline inflation rates, driven by stable energy prices, declining healthcare costs, and flattening shelter inflation.
- Continuation of quantitative easing and an extremely low Fed Funds rate of 0
This document provides an economic and market outlook for the second quarter of 2014. It summarizes recent economic indicators such as GDP, housing, oil prices, employment, and interest rates. It then reviews the performance of various financial markets in the first quarter of 2014, including equity, fixed income, and asset class returns. Overall, it finds that the US economy continues a slow recovery while most major asset classes experienced positive returns in Q1.
The economic outlook summary is as follows:
1) The US economy has slowed significantly with weak GDP growth and persistently high unemployment.
2) Even the slow recovery is threatened by the ongoing European sovereign debt crisis which could trigger a global recession.
3) Domestic consumption, a major driver of GDP, remains subdued due to high unemployment, income inequality, and households focusing on debt reduction over spending.
Case Study - Financial Crisis of 1997 - South Korea
1. Political and Economical History
2. Causes Of Financial Crisis
3. Consequences Of Financial Crisis
4. Recovery Measures
5. Current Situation - Political & Economical
6. Vulnerability of Current Economic situation to another future financial crisis
7. Economic Projections
8. Recommendation to save South Korea from another Hit
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]Gary Crosbie
The document provides an economic summary and analysis for the 4th quarter of 2011. Key points include:
- Economic growth was sluggish in 2011, with GDP growth averaging 1.7% for the year, well below the 5-8% typically seen in recoveries. Unemployment improved slightly but remains high.
- This recovery has been the weakest since World War II. Job and GDP growth have been insufficient to significantly reduce unemployment.
- Business investment and hiring have been hampered by economic uncertainty, regulations, taxes. Corporations have large cash reserves but are using funds mostly for mergers and stock buybacks rather than hiring.
- The Federal Reserve has pursued monetary stimulus through policies
4th Qtr Year End 2011 Economic Review Feb 15 [Autosaved] [Autosaved]Gary Crosbie
2011 4th Qtr Economic Review
Economic Summary
Fed Policy
Bus Investment
Other Economic Indicators
Employment Analytics
“Falling Knife -1- Employment vs Skils”
“Falling Knife -2- The Great In-equality of Wages”
Thought Experiment
Market Forecast
Picks
- The document summarizes key points from a call between Mayukh Datta of Mirae Asset on debt markets, the COVID-19 impact, global reactions, actions taken by India and RBI, impact on equity markets, and portfolio strategies.
- It was noted that government fiscal space is limited, monetary policy will drive most action, and interest rates will likely decrease further. Loose global monetary policies were also discussed.
- Estimates suggest India's lockdown could reduce GDP growth by 2% for the fiscal year. The document outlines India and RBI's economic support measures.
- Equity markets have fallen significantly but valuations now appear attractive if earnings impacts are temporary. Portfolios should focus on large caps and
China has the second largest economy and is the most populous country. It has experienced rapid economic growth averaging 10% over the last 30 years due to reforms allowing private sector growth and foreign investment. China uses fiscal and monetary policies like government spending on infrastructure, adjusting required reserve ratios, and managing the yuan's exchange rate to influence economic stability and growth. These allowed China to recover quickly from the 2008 financial crisis through measures such as lowering interest rates and enacting a $650 billion stimulus package. While still having some state-owned sectors, China has transitioned significantly from a centrally planned to more market-based economy.
The document discusses the U.S. macroeconomic outlook in October 2012. It identifies several global challenges, including rebalancing the U.S. housing market and avoiding structural unemployment. It then reviews what the author got wrong in their previous predictions about the 2007-2012 period. Specifically, the author underestimated the impact of the subprime crisis and overestimated the government and Federal Reserve's response. The document goes on to analyze the financial crisis, spending slowdown, and housing collapse in more detail. It considers the risks and opportunities currently facing the U.S. macroeconomic situation.
Below please find a link to our monthly market perspective piece for February. This month, with the prospect for potential policy changes ahead, we take a deeper dive into the concept of inflation and what it means to investors.
The document discusses inflation and its potential impacts given policy changes under the new US administration. It notes that inflation has eroded purchasing power over the long-term and that equities have historically outperformed bonds and cash in inflationary environments. However, unexpected high inflation in the short-term could negatively impact the economy and markets. The conclusion is that the potential for higher inflation exists, which increases the difficulty of holding cash, so flexibility and risk management are important.
A detailed analysis of the prospects for the UK economy in 2012 from Geoff Riley at tutor2u. Among the key themes explored by Geoff are:
Are we already back in recession?
A damaging legacy from the slump
Have policies lost their effectiveness?
Macro fragility in a world of external shocks
[4:55 p.m.] Bryan Oates
OJPs are becoming a critical resource for policy-makers and researchers who study the labour market. LMIC continues to work with Vicinity Jobs’ data on OJPs, which can be explored in our Canadian Job Trends Dashboard. Valuable insights have been gained through our analysis of OJP data, including LMIC research lead
Suzanne Spiteri’s recent report on improving the quality and accessibility of job postings to reduce employment barriers for neurodivergent people.
Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
1. MARK LUSCHINI
Chief Investment Strategist
Janney Montgomery Scott LLC
I N V E S T M E N T S T R AT E G Y G R O U P
2. Talking Points
• Fiscal resolution leading to revenue and spending adjustments
• Highly accommodative monetary conditions and continued ZIRP
• Positive but subpar growth that may accelerate in 2H
• The search for income yields an asset class rotation
• Overweight equities and increased exposure to non-US markets
• Underweight bonds and particularly interest-rate-sensitive debt
• Shift commodity exposure from liquidity to growth
• Adopt low-correlated investments to temper portfolio instability
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 1
3. GDP will initially grow by a lethargic 1.0–1.5% but accelerate to 2.0–2.5% in the second half
• Expect growth, averaging approximately 2% in 2012, to
provide similar momentum leading into 2013
• Resolution to the fiscal cliff may present a haircut to economic
activity in the year’s first half
− Lost fiscal thrust of 1–1.5% due to tax adjustments and
spending cuts compromised to solve the “cliff”
− Uptick in growth resulting from a release in pent-up
demand by businesses as “cliff” is rendered into a “slope”
• Building on improving housing, employment, and consumer
demand, the economy strengthens through the year
• Exogenous risks relating to Europe and China recede,
increasing global economic stability
• In-shoring will continue as wage arbitrage and low-cost
energy feedstock work to benefit US-based manufacturing
− US companies repatriate manufacturing
− Non-US companies diversify currency exposure and avail
input cost structure to cheap natural gas
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 2
4. Business investment will recover, providing an economic boost
• Core capital goods orders have declined precipitously
− Loss of confidence in the C-suite
− Lack of visibility to demand
• Corporate profits are high and rising
− Companies hold near $2 trillion in cash
− Profits are healthy
− Capital stock has been underinvested
• Businesses spending will increase as uncertainty clears
− Resolution to the fiscal cliff
− Global risks abate
• Capital goods orders will increase
− Lift in activity will boost GDP
− Hiring intentions will be converted to job growth
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 3
5. New and existing home sales are rising
• Household formation crossed over 1 million
− Apartment vacancies are at decade lows
− Home ownership rate stabilizes near trend of 65%
• Housing affordability is at a generational high
− Prices declined 33% from the peak
− Historically low mortgage rates
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 4
6. Housing stock is declining Economic contributions are material
• Inventories of homes for sale are at or below equilibrium • Residential investment will add +/- 0.5% to GDP
• Fewest new homes for sale since 1963 (NAR recordkeeping) • Rising home prices induce the “wealth effect”
U.S. Existing Homes Sales (SAAR)
8.0
7.0
6.0
Millions of homes
5.0
4.0
3.0
2.0
1.0
0.0
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 5
7. Job creation will expand Job Openings and Labor Turnover (JOLTS)
• Currently averaging 150,000 new jobs per month but picking up • More job openings remain unfulfilled
• Unemployment has slowly worked lower • Employee skill set needs to develop to match employer needs
• Hiring intentions in small business community will tick higher
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 6
8. Consumer confidence is rising Wage growth remains weak , but is still positive
• Job stability has firmed • Inflation-adjusted wages are growing, albeit marginally
• Economic news is supportive • Incomes have outstripped spending enough to increase savings
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 7
9. Consumers are repairing their balance sheets
• Debt is being destroyed
− Debt-to-household disposable income is moving to trend
− The cost of debt service is at multi-decade lows
− Low mortgage rates have created a refinancing
bonanza
• Household wealth is within 4% of the 2007 peak
− Financial assets have re-priced
− Home prices have begun to lift, adding to home equity
• The saving rate has stabilized near 3.5%
− Allows for further debt repayment
− Room for spending to continue at 3% or better
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 8
10. The unwinding of credit excesses will last several more years
• Current pace of deleveraging will achieve trend by 2016
− Debt levels topped at 130% and today stand at 108%
• Reduced debt burden will increase consumer
confidence
− Personal balance sheet flexibility
• Improved consumer credit quality solidifies US
economic foundation
− Debt relief frees spending capacity and credit access
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 9
11. Eurozone GDP is contracting Monetary Policy
• Recession conditions likely to persist in 1H • Mario Draghi at the ECB declared to do “whatever it
• Relatively short and shallow fall in output takes”
− Lender of last resort to troubled sovereigns
− Likely to lower overnight rate
• Troika will utilize the European Stability Mechanism to
fund troubled institutions and bailout recipients
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 10
12. Fiscal policy Eurozone PMI
• Politics is coalescing around budgets and structural • Still indicative of contraction but hooking upward
reform • German Ifo index of business sentiment is improving
• Banking union to be established and supervised by
the ECB
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 11
13. Japan’s economy has fallen into recession
• Consecutive quarters of economic contraction
• Yen strength is counterproductive to export activity
New Prime Minister Shinzo Abe vows structural change
• Japan is fighting massive government debt and an aging
population
• Deflation has been endemic for fifteen years
• PM Abe is vocal in requesting central bank intervention
Bank of Japan
• PM Abe is spurring the central bank into more aggressive
action
− New stimulus measures being taken
• Expanding asset purchase program will outpace US Federal
Reserve as a percentage of GDP
• Security purchases include an array of equity and fixed
instruments
• Central Bank Governor Shirakawa may jeopardize his role if
he fails to cooperate
− His position is up for reappointment in April
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 12
14. China’s GDP slowed after running in double digits
for years
• Q3 growth of 7.4% was below the 7.6% pace of Q2
• Export activity has been crimped by Europe’s recession
(exports to Europe dropped from 20% to 14% of total)
• China is still growing quickly enough to create an
economy the size of Greece every three months
Recent data suggest the economy has stabilized
• Manufacturing PMI readings indicative of expansion
− Industrial and electricity production is on the rise
− Retail sales are growing
• Inflation is well controlled and below the People’s Bank of
China’s target of 4%
• Property sales have increased, and prices are nudging
higher
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 13
15. The once-in-a-decade change in regime is settled
• Xi Jinping, leader of the ruling Communist Party, is joined by just six other members in the Politburo
− Expect only incremental reform but an attack on corruption
− Mr. Xi will work to transition China toward a consumption-based economy
• 7.5% GDP growth is targeted in 5-year plan
− Lessening reliance on exports and internal investment
• Ultimately a healthier proposition for China and its contribution to global activity
• Rising per-capita incomes will lead to increased spending on consumer products
» Consumer spending is less than 35% of Chinese GDP vs. 71% in US
» Wage growth and installing a more robust social safety net will reduce the need for high savings rate
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 14
16. Fiscal Issues
• Congress has little appetite for underwriting a large fiscal
stimulus
• Austerity measures underway to control budget deficit
• Tax reform and spending cuts will establish a path toward
debt reduction
− A directional positive, but years removed from the end
of deficit spending
− Credit downgrade will remain a threat if the political
will wavers
• Federal deficit exceeds GDP, which may begin to retard
economic growth
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 15
17. US debt issuance needs willing lenders to ensure
smooth auctions
• China and others are diversifying away from US dollar-
denominated assets
• Dollar debasement hurts investment values held by
foreign hands
− Central banks have been buying record levels of gold
− The IMF has expanded its roster of reserve
currencies to include Canadian and Australian dollars
• US retains its status as the world’s reserve currency, but
that is a privilege, not an entitlement
• The Federal Reserve is indirectly underwriting debt
accumulation with low interest rates and asset purchase
programs
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 16
18. Interest rates are being carried at historic levels
• The Federal Reserve has begged interest rates at 0-0.25%
− Held at these levels since 2008
− Policy will likely remain intact for several more years
Asset Purchase Programs
• The Federal Reserve instituted “quantitative easing” to drive
bond yields lower across the yield curve
• The program underway is directed at purchases of Treasury
and mortgage-backed securities
− $40 billion in MBS and $45 billion in Treasuries per
month
− If the purchases run through 2013, it would add $1
trillion to the Fed’s balance sheet
• The Fed’s balance sheet would expand to approximately $4
trillion from roughly $800 billion in 2008
• Rates have effectively been lowered across the curve as a
result, but the issue is demand, not cost of capital
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 17
19. The Federal Reserve adopted a state-dependent
policy regime
• Rather than a date-dependent policy – “the middle of
2015” – the Fed expressed its intent to keep its policy
highly accommodative until unemployment reaches 6.5%
as long as inflation 1-2 years forward stays below 2.5%
• Designed to allow market participants to better anticipate
a Fed policy shift
− Defuses the chance an unexpected change might
alarm bond investors
− Stages a more “communicative” Fed, where markets
can adapt without the Fed using traditional policy tools
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 18
20. Short-term fixed instruments (such as money
market funds, savings and checking accounts, and
CDs) will be relegated to yield the equivalent, or
thereabout, of Fed’s overnight rate (near zero)
• Economic growth will not be strong enough to warrant a
change in Fed policy for some time to come
• Even as the economy improves, the Fed will likely err on
the side of caution and raise rates timidly
Cash is an important source of liquidity for near-
term liabilities, and a place to store money being
staged into longer-duration assets
• The opportunity cost of holding cash earmarked for risk
assets is extraordinarily high given its yield
• With little change expected in the short near-term
forecast for interest rates, the loss of purchasing power
due to inflation makes holding cash an expensive
decision
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 19
21. Bonds have benefitted from the lack of inflation and aggressive fed policy
• Bond yields have worked lower, providing total returns to investors that rival equities over the last several years
− The pattern can continue only if the economy worsens or an event occurs driving a flight to safety
• The eventuality of interest rate normalization by the Fed suggests investors should prepare in advance
− Consider the interest rate sensitivity of fixed income securities being bought or held
• Credit versus guaranteed government securities
• Test the duration of portfolio holdings
We expect bond yields to move slightly higher toward 2.25% for the 10-year Treasury
• Yields rise as the market begins to perceive the Fed’s outlook for improving conditions and full employment by 2016 is correct
• Corporate bond values will decline, but the improving environment for corporate health will temper the impact
Spread product is appealing against the option of government securities
• Taxable fixed income
− Corporate securities are favored as a steady economy and strong corporate fundamentals compensate for the risk of a balance sheet as collateral versus a
government guarantee
• High-quality corporate bonds offer a spread of 1% or more over comparable Treasuries
• High-yield (or junk) bonds offer a spread of as much as roughly 5%, but are most suitable for risk-based capital
• Tax-free fixed income
− Municipal bonds are appealing as the revenues of state and municipal governments have improved
− Tax-free status could be subject to prospective changes in tax policy expected to occur in 2013
Bonds of foreign sovereigns and corporations may be a means to diversity income sources
• Yields found in many emerging market countries are higher than US debt
− Prefer sovereign over corporate debt as the fiscal conditions have improved markedly in developing markets
− Inflation-protected securities are appealing as many central banks are attempting to reflate economic activity
• Currency diversification can be added or hedged predicated upon the issuer
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 20
22. US stocks have performed well since the lows of 2009
• While prices have risen, the move has been supported by a commensurate rise in profits
• Valuations are undemanding
− Based on earnings estimates for 2013 ($108 for the S&P 500) stocks trade at a reasonable P/E of 13.3
− The Earnings Yield (EY = 1/13.3) of 7.5 is historically high and richer than the yield on speculative debt
− The Equity Risk Premium (EY – risk-free rate) near 5.7% is unusually high
• Equity prices are poised to advance approximately in line with earnings growth plus dividends
− Earnings growth of 5-7% y/y plus a 2% dividend yield on the S&P 500 results in a total return estimate of 7-9%
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 21
23. Non-US equities offer greater appeal in 2013
Europe
− Equity valuations are some 20% cheaper than in US markets
− The earnings growth disparity compared to the US is near historic levels
− Market expectations are low, allowing for positive surprise to trigger a “catch-up” phase in performance
China
− Averting an economic hard landing will lead to a re-rating of valuations
− Equity valuations are more than 10% below the emerging market average and well below global equities
Japan
− The Japanese equity market has had many false dawns, but the change agent now in place may be a catalyst
− Stocks are very cheap compared to other world equity bourses
− Aggressive monetary intervention, which should lower the yen, reduces currency-induced friction to Japanese multinationals
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 22
24. US equity markets should produce near trend returns
Large, high-quality companies Low-yield fatigue may force a rotation from bonds
− Shift emphasis back to those that are globally geared
− Sector sentiment is increasingly less defensive
to stocks as an income-producing alternative
• Consumer facing – improving consumer condition bodes well for spending – Dividend payers will be rewarded as the search for income
» Autos sources goes unabated
» Housing stocks and related companies • Seek payers that have an extended history of raising the
dividend regularly
• Energy – 55% of oil consumption comes from the near inelastic demand of
emerging market countries • Conventional areas for dividends, such as Utilities and Telecom,
sport rich valuations capping upside potential
» Major integrated
» Consider healthcare, energy and tech instead
» Oil services
• Financials – balance sheet improvement and increased spending on financial
services
» Regional banks
» Insurance companies
• Health care – inexpensive valuations and growing health care expenditures in
emerging markets
» Medical device
• Technology – benefactor of the coming capital spending revival
» Software
» Semiconductors
• Special situation
» Gold miners
» Non-gold miners
» Select industrials
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 23
25. These non-US equity markets may deliver performance that exceeds that of the US equity market
• Europe
− Germany – a diverse and relatively resilient economy
− France – French companies often get unfairly penalized for their location
− Italy and Spain – the sovereign crisis extracted a great toll on these economically important countries
• The ECB will act to prevent insolvency, which has stabilized these markets
• Generationally cheap valuations could rise as the fog of uncertainty lifts
− UK – London market hosts many non-UK-based mining companies, hinging the exchange to the global economy
• China
− Chinese equities should most often be purchased through a diversified investment vehicle
• Chinese H-shares are listed and traded on the Hong Kong exchange
• Chinese A-shares are listed and traded on the Shanghai exchange
» Generally more utilized by Chinese retail investors
» May not move in tandem with the H-shares
• Japan
− Nikkei is inexpensive on a price-to-book value (below 1.0)
− Japanese multinationals may pick up a tailwind through a lower currency
− Hedge currency exposure as a US-based investor to be rewarded if the yen’s expected decline is realized
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 24
26. Look to transition from liquidity- to growth-driven
commodities
• Hold gold for now
− “Alternative currency” that is no country’s liability and
cannot be debased through central bank money
printing
− No cost of carry in a world awash in negative real
interest rates
− Increasingly viewed as a hard currency that is still
under-owned by institutions
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 25
27. • Moving precious metals exposure to palladium, then platinum • Industrial metals are not likely to repeat the parabolic move
− These two “white” metals benefit from an uptick in of the last decade as the supply/demand imbalance has
auto sales as they are used in catalytic converters move closer to equilibrium
• Palladium is used in more cars going to China while platinum • Soft commodities are heavily influenced by weather patterns,
is used by more cars sold in Europe but the secular theme is strong
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 26
28. Oil prices should remain elevated as supply
constraints preclude an abundance of
inventory hitting global markets
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 27
29. Commercial real estate has improved as vacancy rates have declined
• The lack of overbuilding during the real estate boom has helped the commercial market recover
• Employment growth has drawn down available space and hardened pricing
• Yields have moved lower as a result of price appreciation, decreasing this sector’s appeal
Residential
• The housing market recovery should continue as inventories have been drawn down to equilibrium or below
• Housing starts are increasing but at a measured pace
• The “shadow” inventory of homes that are in foreclosure or bank-owned is less threatening, given the quickening pace of sales
activity
• Prices have started to recover, with some markets (Nevada, Arizona, and Florida) showing steep gains year-over-year
− Aggregate prices are still near 30% off of highs
− Housing affordability will remain high given the Fed’s mortgage-bond buying program
• New IPOs of residential roll-ups are in the pipeline
− Allows for a public mechanism to participate in the housing recovery via an exchange-listed security
International real estate is a diversified way to capture a resumption of global economic activity
• Emerging Asia, in particular, holds promise
• Canada and Australia have highly indebted consumers, which could be a negative for housing activity
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 28
30. Currencies are a zero sum game where one’s Australian dollar (neutral) is benefitting from an economy
strength is based off another’s weakness that has not experienced a recession since 1991 and
whose proximity to China gives way to a strong export
market, given its resource-laden composition
For US dollar-based investors, a foreign currency’s
merit is evaluated by comparing the sovereign against
the US.
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 29
31. Canadian loonie (bullish) should gain on rising oil prices Euro (neutral) will likely rise unless the ECB undertakes an
and a stable US economy, its most important trading aggressive form of money printing or the US economy
partner. firms.
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 30
32. Yen (bearish) strength will be tested against the will of Yuan’s (neutral) peg to the US dollar has loosened,
the new Prime Minister and his influence over the leaving it likely to trend higher, albeit slowly.
Bank of Japan.
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 31
33. Traditional policy portfolios consist of stocks, bonds, and cash
• Stocks for growth, bonds for predictability and income, and cash as a vehicle to feed spending policies
• A 60% stock, 40% bond mix is a commonly constructed “foundation” portfolio
− Optimal risk/return characteristics
− Precedent for delivering a spending target while keeping up with inflation
Traditional portfolio architecture is challenged by today’s interest rate environment
• Quality bonds yield a third of their historical average
• Low yields increase the interest-rate-sensitivity of bonds
• Convention holds that bonds are the stable portion of a balanced portfolio
Augmenting portfolios with low-correlated investments may increase return predictability
• Seek investment strategies that produce return streams with a low correlation to stock and bond benchmarks
− Real return, managed futures, merger arbitrage, distressed debt
• Strategies that can reduce swings in market value are useful to combat policy infidelity
• Conditions change, often unexpectedly, warranting increased use of alternative solutions
− Helps to reduce drawdown potential on equity values
− A portfolio stabilizer when long-only bond exposure limits flexibility
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 32
34. Feed the World
Global population is expected to grow from 7 billion today to 9 billion by 2050. It is estimated that 70% more food will be needed,
given rising per capita incomes and expanding dietary desires. In addition, available sources of drinking water are already being
stressed by today’s needs.
Agribusiness and desalinated water production are themes to consider via fertilizer companies, food enhancers, water facilities,
and farm or earth-moving equipment makers. Related investments are soft commodities and the New Zealand Kiwi.
Energy
Global energy demands are rising. Increasingly, the highly populated and urbanized areas such as Asia, Latin America, and Africa
are buying cars and need power to support infrastructure development. The IEA has forecast energy independence for the US by
2035 at current rates of technologically accessible reserve development and production.
Energy companies, from major integrated multinationals to equipment makers and oil-service enterprises, will benefit.
Infrastructure
Developing markets are undergoing a massive transformation from rural to increasingly urban. China alone is expected to have as
many as a half billion people shift from farmland to the cities. Roads, bridges, buildings, apartments, airports, are going to be built,
wired, heated, and cooled. Electric and other energy sources will be needed.
Consider equipment makers for power generation and non-precious metal miners for cooper, iron ore, and nickel. Also
commodity currencies, such as the Australian dollar, and industrial metals.
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 33
35. Optimistic Case – 30% Probability
• Economy and Markets
The fiscal cliff is rendered a mere slope and sidelined demand is released. Hiring edges above 200,000 per month. Business and consumer confidence lifts. Europe posts positive
growth in the third quarter latest and China’s GDP prints an 8-handle. Corporate profits push toward double-digit year-over-year gains, and the market’s risk premium compresses.
Applying a mid-point 1-year trailing/forward multiple of 15 to earnings pushes the S&P 500 to new highs of 1680.
• Investment Strategy
Risk assets produce double-digit gains with stronger returns from emerging market equities. An asset rotation from bonds to stocks begins, which is the kindling for equity prices
but is counterproductive for bond returns. The market begins to think the Fed may pull in its QE program and rate target, jarring bond yields.
Base Case – 60% Probability
• Economy and Markets
The US continues to grow at a below-trend rate, but the pace accelerates over the year as uncertainty over the fiscal cliff clears. Europe’s recession remains relatively shallow and
brief, and China’s growth stabilizes. No new threat rises from the Middle East that could disrupt oil supplies, leaving WTI prices below $110. Corporate profits rise mid-upper single
digits and little margin pressure is applied. Limited multiple expansion that moves the P/E up slightly to 14.3 takes the S&P 500 to 1545 by year end.
• Investment Strategy
US stocks act reasonably well, outperforming bonds and cash. As evidence accumulates that macroeconomic risks are receding, global growth potential is upgraded. Investors
should add to non-US equity exposure, where returns will likely be more favorable. Interest-rate-sensitive securities should be underweight.
Pessimistic Case – Probability 10%
• Economy and Markets
The US does not avert the fiscal cliff, and no resolution is found for an extended period of time. Anxieties rise and worries over US growth impact global business activity. Europe’s
recession worsens, and China cannot bail out the deterioration in world-wide economic conditions. Corporate profits succumb to lack of demand, and equity investors de-risk.
Valuation compression leads the S&P 500 to correct 15% to 1250 before rebounding to finish the year at 1400.
• Investment Strategy
US stocks do relatively better than non-US equities. High-quality, large-cap dividend payers gain sponsorship for predictability. Bonds produce better returns than stocks with
Treasuries gaining most from the flight to safety. Cash and low-correlated investments serve to buffer portfolio volatility. Gold serves as a good hedge.
A weighted blend of these scenarios establishes a year-end price target for the S&P 500 of 1571.
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 34
36. This is for informative purposes only and in no event should be construed as a recommendation by us or as an offer to sell, or
solicitation of an offer to buy any securities. The information given herein is taken from sources that we believe to be reliable, but is
not guaranteed by us as to accuracy or completeness. Opinions expressed are subject to change without notice and do not take into
account the particular investment objectives, financial situation or needs of individual investors. Employees of Janney Montgomery
Scott LLC or its affiliates may, at times, release written or oral commentary, technical analysis or trading strategies that differ from the
opinions expressed here.
Returns reflect results of various indices based on target allocation weightings. Weightings are subject to change. Index returns are
for illustrative purposes only and do not represent the performance of any investment. Index performance returns do not reflect any
management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.
Performance data quoted represents past performance and is no guarantee of future results. Current returns may be either higher or
lower than those shown.
INVESTMENT STRATEGY GROUP
I N V E S T M E N T S T R AT E G Y G R O U P 35