Standard Chartered provides their outlook for 2017, identifying four key pivots:
1) From Pax Americana to multi-polarity as China's rise challenges U.S. dominance
2) From monetary to fiscal policy as the U.S. boosts fiscal spending to spur growth
3) From deflation to inflation as deflationary fears fade and inflation rises
4) From globalization towards protectionism as populism increases trade barriers
They predict a 'Reflation' scenario is most likely, with moderate growth and rising inflation.
Scott Minerd, Chairman of Investments and Global CIO, analyzes global macroeconomic trends most likely to shape the investment environment in 10 charts.
Neither bulls nor bears in 2011, LPL Financial Research expects the economy and the markets will be range-bound in 2011. Bound by economic and fiscal forces that will restrain and not reverse growth, we believe the markets will provide modest single-digit rates of return.
In 2011, business leaders, policymakers, and investors will play important roles in shaping the investing environment.
It has been seven years since the last financial crisis. In that seven-year period, the total global debt has increased by even more than it did in the seven years previous (2000-2007). From the end of 2007 through to the end of the first half of last year, total global debt increased by 40%, or $US 57 TRILLION! This massive increase in debt has been a consequence of easy money in a low interest rate environment aided and abetted by programs of quantitative easing (the provision of liquidity by central banks) in order to promote economic growth and investment.
The first quarter managed to record some positive results overall, despite severe declines in some sectors.
Scott Minerd, Chairman of Investments and Global CIO, analyzes global macroeconomic trends most likely to shape the investment environment in 10 charts.
Neither bulls nor bears in 2011, LPL Financial Research expects the economy and the markets will be range-bound in 2011. Bound by economic and fiscal forces that will restrain and not reverse growth, we believe the markets will provide modest single-digit rates of return.
In 2011, business leaders, policymakers, and investors will play important roles in shaping the investing environment.
It has been seven years since the last financial crisis. In that seven-year period, the total global debt has increased by even more than it did in the seven years previous (2000-2007). From the end of 2007 through to the end of the first half of last year, total global debt increased by 40%, or $US 57 TRILLION! This massive increase in debt has been a consequence of easy money in a low interest rate environment aided and abetted by programs of quantitative easing (the provision of liquidity by central banks) in order to promote economic growth and investment.
The first quarter managed to record some positive results overall, despite severe declines in some sectors.
Geopolitical events continued to make headlines this quarter but did little to quell investors’ enthusiasm as markets continued to advance. Russia and the Ukraine managed to agree to a temporary ceasefire just as sectarian violence in Iraq exploded driving oil prices higher. China garnered attention with its hegemonic designs on the South China Sea much to the displeasure of Japan and Vietnam as well as pushing back on any pro-democracy desires in Hong Kong. In addition, Argentina once again threatens to default on its debt after losing a Supreme Court decision to creditors in the US.
Are the good times here to stay or are we hearing the Sirens’ call? Since 2008, investors have been on an odyssey. Gradually, stock markets have managed to recover from the disastrous carnage precipitated by the financial crisis of 2007 and 2008. It has been an uneven path back to current market levels as there have been many occasions when it appeared that the fragile recovery would be stymied by bickering politicians, slowing emerging economies, deflationary pressures, regulatory zeal, civil unrest in the Middle East, over spent consumers, etc
Geopolitical events continued to make headlines this quarter but did little to quell investors’ enthusiasm as markets continued to advance. Russia and the Ukraine managed to agree to a temporary ceasefire just as sectarian violence in Iraq exploded driving oil prices higher. China garnered attention with its hegemonic designs on the South China Sea much to the displeasure of Japan and Vietnam as well as pushing back on any pro-democracy desires in Hong Kong. In addition, Argentina once again threatens to default on its debt after losing a Supreme Court decision to creditors in the US.
Are the good times here to stay or are we hearing the Sirens’ call? Since 2008, investors have been on an odyssey. Gradually, stock markets have managed to recover from the disastrous carnage precipitated by the financial crisis of 2007 and 2008. It has been an uneven path back to current market levels as there have been many occasions when it appeared that the fragile recovery would be stymied by bickering politicians, slowing emerging economies, deflationary pressures, regulatory zeal, civil unrest in the Middle East, over spent consumers, etc
“Anyone who lives within their means suffers from a lack of imagination.”- Oscar Wilde
It all seemed so easy. The elixir of low interest rates and successive rounds of quantitative easing by the central banks created an environment wherein stock and real estate prices have risen, private equity and credit deals proliferated, corporations lowered their cost of capital with low rates and sub-prime borrowers regained access to capital. Until this quarter, investors were content to drink this elixir as markets steadily climbed out of the depths from 2008. The politicians taking credit and the central bankers implementing these policies cannot be accused of a lack of imagination.
THIRD QUARTER 2015 RETROSPECTIVE AND PROSPECTIVE We’ve Seen This Movie BeforeRobert Champion
Global markets remained in turmoil as concerns regarding the global economy persisted. While much of the international focus was centred around the slowing economy in China, there were few places that investors could hide as even cash, paying little to negative interest in some parts of the world, was a relative winner in the quarter.
It's not getting any easier to invest, with the US economy growing quickly in the midst of trade wars and rising interest rates. The rest of the world is performing more modestly, and is more worried by US developments than the Americans.
Australia's doing better than we realise, with expansion of our resource exports, and population growth supportive of our economy, if not our stock market.
The easy gains in markets are past - we are confronted by rising world interest rates in conjunction with already elevated asset prices. Managing risk and avoiding complacency will be key.
Growth stocks are most expensive relative to their net present value, while value stocks have been depressed in relative terms. Markets are overpricing growth and underpricing stability.
Certitude Global Investing Insights - May 2013certitudeglobal
The Certitude Global Insights is produced each quarter, and provides a summary of key global investment themes over the last quarter coupled with investment insights from our fund managers. Highlights this quarter include: 10 Reasons for Global Equity Income, Breaking the Bad News Cycle, Watch Capital Flows for the Central Bank’s Next Move & Easy Eurozone Trades are Running Out of Road.
Dealing With Divergences - Blackrock 2015 OutlookJoão Pinto
2015 Investment Outlook
Economic growth and monetary policies are diverging across the world. Get ready for volatility spikes in 2015—and new opportunities.
We debated this at our 2015 Outlook Forum in mid-November in London. The semi-annual event, the seventh of its kind, was marked by intense investment debates in small and large groups.
The 20-page piece includes: our 2015 base case (see chart below); top investment ideas; in-depth sections on valuations, volatility and currencies; five interactive graphics; and spotlights on key regional investment trends.
Laurentian Bank Securities - Economic Research and Strategy Mark MacIsaac
LBS Asset Allocation December Update:
Global equities made yet another high this month as global economic data remained robust and economic growth prospects kept being upgraded.
In 2014, there may be more all-time highs seen in the stock market and higher yields in the bond market than
we have seen in years as economic growth accelerates. The primary risk to our outlook is that better growth in
the economy and profits does not develop. That risk is likely to be much more significant than the distractions
posed by Fed tapering and mid-term elections. In our almanac, we forecast a healthy investment environment
in which to cultivate a growing portfolio in 2014.
*** GDP: 3% Growth ***
As economic drags fade and global growth improves, the U.S. economy may accelerate to its fastest pace in nearly a decade.
*** STOCKS: 10-15% Returns ***
This slightly above-average annual return forecast is rooted in our expectations for high single-digit earnings growth and a modest rise in the PE.
*** BONDS: Flat Returns ***
Interest rates will move higher and bond prices lower in response to improving economic growth eroding return from yield.
Global equities hit another record high in December as global economic data remained robust, economic growth prospects kept being upgraded and financial conditions stayed accommodative.
LBS Asset Allocation August Update - July 28, 2017Mark MacIsaac
Global economic data continue to point to robust and synchronized economic growth with the release of stronger-than-expected ISM surveys, German IFO business climate survey and Chinese Q2 real GDP growth data.
Adjusting primitives for graph : SHORT REPORT / NOTESSubhajit Sahu
Graph algorithms, like PageRank Compressed Sparse Row (CSR) is an adjacency-list based graph representation that is
Multiply with different modes (map)
1. Performance of sequential execution based vs OpenMP based vector multiply.
2. Comparing various launch configs for CUDA based vector multiply.
Sum with different storage types (reduce)
1. Performance of vector element sum using float vs bfloat16 as the storage type.
Sum with different modes (reduce)
1. Performance of sequential execution based vs OpenMP based vector element sum.
2. Performance of memcpy vs in-place based CUDA based vector element sum.
3. Comparing various launch configs for CUDA based vector element sum (memcpy).
4. Comparing various launch configs for CUDA based vector element sum (in-place).
Sum with in-place strategies of CUDA mode (reduce)
1. Comparing various launch configs for CUDA based vector element sum (in-place).
Show drafts
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Empowering the Data Analytics Ecosystem: A Laser Focus on Value
The data analytics ecosystem thrives when every component functions at its peak, unlocking the true potential of data. Here's a laser focus on key areas for an empowered ecosystem:
1. Democratize Access, Not Data:
Granular Access Controls: Provide users with self-service tools tailored to their specific needs, preventing data overload and misuse.
Data Catalogs: Implement robust data catalogs for easy discovery and understanding of available data sources.
2. Foster Collaboration with Clear Roles:
Data Mesh Architecture: Break down data silos by creating a distributed data ownership model with clear ownership and responsibilities.
Collaborative Workspaces: Utilize interactive platforms where data scientists, analysts, and domain experts can work seamlessly together.
3. Leverage Advanced Analytics Strategically:
AI-powered Automation: Automate repetitive tasks like data cleaning and feature engineering, freeing up data talent for higher-level analysis.
Right-Tool Selection: Strategically choose the most effective advanced analytics techniques (e.g., AI, ML) based on specific business problems.
4. Prioritize Data Quality with Automation:
Automated Data Validation: Implement automated data quality checks to identify and rectify errors at the source, minimizing downstream issues.
Data Lineage Tracking: Track the flow of data throughout the ecosystem, ensuring transparency and facilitating root cause analysis for errors.
5. Cultivate a Data-Driven Mindset:
Metrics-Driven Performance Management: Align KPIs and performance metrics with data-driven insights to ensure actionable decision making.
Data Storytelling Workshops: Equip stakeholders with the skills to translate complex data findings into compelling narratives that drive action.
Benefits of a Precise Ecosystem:
Sharpened Focus: Precise access and clear roles ensure everyone works with the most relevant data, maximizing efficiency.
Actionable Insights: Strategic analytics and automated quality checks lead to more reliable and actionable data insights.
Continuous Improvement: Data-driven performance management fosters a culture of learning and continuous improvement.
Sustainable Growth: Empowered by data, organizations can make informed decisions to drive sustainable growth and innovation.
By focusing on these precise actions, organizations can create an empowered data analytics ecosystem that delivers real value by driving data-driven decisions and maximizing the return on their data investment.
2. This commentary reflects the views of the Wealth Management Group of Standard Chartered
Outlook 2017
The year of the #pivot?
3. Source: Standard Chartered, Global Investment Committee
Fast changing world where
information/misinformation travels at an
ever-increasing speed through cyber-
space
Pivot can be defined as ‘keeping one
foot firmly grounded while you shift the
other in a new direction’
Degree of uncertainty surrounds the
magnitude and pace of the pivots
The year of the #pivot?
4. From Pax Americana to multi-polarity
The rise of China and the relative decline of the US
will likely lead to rising tensions, especially in Asia,
which infers a potential Asian pivot away from the US
towards China. History has taught us that multi-
polarity can often lead to ‘black swan’ events
From monetary to fiscal
Ever since 1999,
economies have been
supported by extremely
loose monetary policy
settings. However, the US
is now taking a leading
role in boosting fiscal
policies via tax cuts and
increased infrastructure /
defense spending to spur
economic activity
From deflation to inflation
Deflationary fears against the backdrop of sluggish
growth and high debt levels are fading. Recent
economic data and rising oil prices have supported
the case for rising inflation.
From globalisation towards protectionism
Globalisation has been a key feature for many
decades. However, the rise in populism risks a
swing towards increased protectionism in global
trade. The US is at the forefront of this shift.
Source: Standard Chartered, Global Investment Committee
Our four pivots
6. Macro: Inflation expectations are rising amid
tighter labour markets and higher commodity
pricesLong-term market-based inflation expectations in the US, UK and the Euro area
5-year, 5-year inflation swap rates
Source: Bloomberg, Standard Chartered
7. Macro: Emerging Markets are recovering
EM-DM growth differential is likely to widen for the first time since the financial
crisis
EM and DM growth trend and consensus estimate for 2017 (%); Growth differential between EM and DM
Source: Bloomberg, Standard Chartered
%
%
8. Macro: Asian exports have been under pressure
for the past two years, but there are nascent signs
of an upturnExport growth trend for major Asian exporters
% y/y
Source: Bloomberg, Standard Chartered
9. Singapore: Job creation has softened, but
wage growth has accelerated
% y/y (LHS); ’000 (RHS)
Source: WTO, CEIC, Standard Chartered
11. *Note that probabilities do not add up to 100% as all scenarios are not captured here.
Figures in brackets represent GIC probabilities in June 2016 while figures outside represent current probabilities
Source: Standard Chartered, Global Investment Committee
‘Reflation’ and
‘Muddle-through’
are most likely,
with ‘Stagflation’
and ‘Deflation’
as outside risks Mediocre growth
Low inflation
Accommodative monetary policies
Neutral fiscal policies
Accelerating growth and rising inflation
Easier fiscal policies
Still-accommodative monetary policies
Slower growth
Rising inflation
Eventually lead to tighter monetary policies
Mediocre or slowing growth
Falling inflation
Eventually lead to easier monetary policies
Muddle-through
Probability
30
%(45%)
Reflation
Probability
35
%(15%)
Stagflation
Probability
20%(20%)
Deflationary
downside
Probability
10%(20%)
Our core scenarios
12. Source: Standard Chartered, Global Investment Committee
MULTI-ASSET
Multi-asset income allocation
to deliver positive absolute
returns
Balanced allocation (mix of
50% Global Equity & 50%
Global Fixed Income) to
outperform multi-asset
income allocation
BONDS
Corporate bonds
to outperform government bonds
DM High Yield bonds to outperform
broader bond universe
US floating rate senior loans to
deliver positive returns
EQUITIES
US, Japan (FX-hedged)
to outperform global
equities
India, Indonesia to
outperform within Asia ex-
Japan
COMMODITIES
Brent crude oil
price to be higher
by end 2017
ALTERNATIVE
STRATEGIES
Our alternative strategies
allocation to deliver
positive absolute returns
in 2017
FX
EUR/USD to fall
AUD/USD to rise
USD/CNY to rise
Our asset class views at a glance
13. Multi-asset: Pivot towards a reflationary
scenario
Trends in multi-asset investing (2009 – Today)
Source: Standard Chartered
14. Multi-asset income: Performance strong, but
weakened in Q4 as US interest rate
expectations rosePerformance of multi-asset income
Source: Bloomberg, Standard Chartered
15. This commentary reflects the views of the Wealth Management Group of Standard Chartered
Outlook 2017: Bonds
The year of the #pivot?
16. Bonds: Corporate credit to outperform
government bonds
Focus on lowering interest rate sensitivity and maintain maturity profile around 5
years
Bond preference in a rising yield environment
Source: Bloomberg, Standard Chartered
17. Bonds: DM HY corporate bonds and US
floating rate loans are our preferred sub-asset
classesWe like their lower interest rate sensitivity, attractive yield and correlation to
equities
High Yield bonds and Floating Rate Senior loans total return index. Rebased to 100 on 1 Jan 2013
Source: Bloomberg, Standard Chartered
95
100
105
110
115
120
125
Jan-13 Oct-13 Jul-14 Apr-15 Jan-16 Oct-16
Index
US HY Total Return
S&P/LSTA Leveraged Loan Total Return
Spike in
Yields
18. This commentary reflects the views of the Wealth Management Group of Standard Chartered
Outlook 2017: Equities
The year of the #pivot?
19. Equities: Country Preferences
Source: Standard Chartered
US
Japan
Euro area
UK
HKSG
SA RU MX
Korea
India
China
Australia
LATAM
AxJ
IDTW
BZ
MA
Overweigh
t
Neutral
Underweight
Our preferred markets as we enter 2017 include US, Japan (on a FX-hedged
basis) globally, and India and Indonesia within Asia
20. Equities: US is one of our preferred markets
US earnings recover, led by energy
US earnings growth expectations
Source: Bloomberg, Standard Chartered
21. Equities: Japan also preferred on an FX-
hedged basis
Nikkei rises and falls with USD/JPY
Japanese Nikkei Index and USD/JPY
Source: Bloomberg, Standard Chartered
22. This commentary reflects the views of the Wealth Management Group of Standard Chartered
Outlook 2017: FX
The year of the #pivot?
23. USD: Riding on higher US rate expectations
Source: Standard Chartered
Fed hikes ahead
of inflation
Global central banks
maintain stimulus
Political risk in
EU and UK
Strong EM
growth rebound
Stimulus
withdrawal outside
US
US rates lower
for longer
Strength Weakness
Balance of factors still supportive of USD strength
However, this depends on how the Fed responds to resurgent inflationary pressures
24. FX: At a Glance
Moderate USD strength, further downside in EUR and CNY, constructive on AUD
Key drivers/factors underlining our view
Source: Bloomberg, Standard Chartered
Legend: Bullish | Neutral | Bearish | Not Supportive | Neutral | Supportive
Currency Outlook
Real Interest
Rate
Differentials
Risk
Sentiment
Commodity
Prices
Broad USD
Strength
Comments
USD n/a
Higher US rates coupled with
maintenance of policy easing in major
economies
EUR n/a n/a
Widening rate differentials as ECB
maintains easy policy settings
JPY n/a n/a
Widening rate differentials amid BoJ’s
yield curve control policy
GBP n/a n/a
Weak sentiment amid post Brexit
uncertainty and weak balance of
payment fundamentals
AUD, NZD
Moderately higher commodity prices to
be supportive while easing cycle has
likely troughed
EM FX
Modestly stronger USD is a headwind,
but moderately higher commodity
prices and stable China growth to limit
downside
25. CNY: Further weakness expected
Continued monetary easing in China to drive USD/CNY higher
China monetary conditions index and USD/CNY
Source: Bloomberg, Standard Chartered