This document provides an economic update and market commentary for February 2016. It includes key economic statistics for the US, benchmark interest rates and yields, municipal bond market news, and commentary on Federal Reserve policy and interest rates. Inflation indicators rose in January while unemployment fell slightly. Benchmark interest rates declined over the month.
The SVB Asset Management Economic Report, Q2 2017, is a review of and outlook on economic factors that impact global markets and business health.
In this edition, the team discusses the U.K.’s Article 50 notice and the FOMC’s current path towards normalization. The report also examines the Trump Administration’s first 100 days in office and current business sentiment.
Standpoint: Global Reflation by Kevin Lings STANLIB
Fears of sustained deflation and stagnant growth in the United States and Europe have been replaced by a more optimistic growth outlook as well as concerns about rising inflation. This has driven developed market equities higher, but also weakened major bond markets.
Duff & Phelps' Capital Markets Insights - Spring 2018 report states that leveraging costs and structures showed signs of increasing volatility in the first quarter of 2018, as markets reacted to rising economic growth, inflation concerns and trade tensions. Read the report for more detail.
Factsheet for Birla Sun Life Mutual Fund- WishfinAnvi Sharma
The scheme aims to maximize long term capital appreciation by investing primarily in equity & equity related securities of companies engaged in banking & financial services. The scheme would invest in banks as well as NBFC's, insurance companies, rating agencies, broking companies, etc.
From the BPV Capital Management investment team comes our most recent update on capital markets. In this issue, we examine how a risk-on environment in equities did not translate to fixed income, keeping interest rates subdued.
The SVB Asset Management Economic Report, Q2 2017, is a review of and outlook on economic factors that impact global markets and business health.
In this edition, the team discusses the U.K.’s Article 50 notice and the FOMC’s current path towards normalization. The report also examines the Trump Administration’s first 100 days in office and current business sentiment.
Standpoint: Global Reflation by Kevin Lings STANLIB
Fears of sustained deflation and stagnant growth in the United States and Europe have been replaced by a more optimistic growth outlook as well as concerns about rising inflation. This has driven developed market equities higher, but also weakened major bond markets.
Duff & Phelps' Capital Markets Insights - Spring 2018 report states that leveraging costs and structures showed signs of increasing volatility in the first quarter of 2018, as markets reacted to rising economic growth, inflation concerns and trade tensions. Read the report for more detail.
Factsheet for Birla Sun Life Mutual Fund- WishfinAnvi Sharma
The scheme aims to maximize long term capital appreciation by investing primarily in equity & equity related securities of companies engaged in banking & financial services. The scheme would invest in banks as well as NBFC's, insurance companies, rating agencies, broking companies, etc.
From the BPV Capital Management investment team comes our most recent update on capital markets. In this issue, we examine how a risk-on environment in equities did not translate to fixed income, keeping interest rates subdued.
Fed must relent. Our expectations now is for a state dependent (global financial conditions to stabilise, cushion rising debt repayment burden and allowing domestic leverage to level off, coupled with still moderate economic growth/inflation, policy options to widen positively globally, especially in China) Fed relent with scope for a final 25-50bps, if any (pause otherwise), in late 2019/2020, should the cycle extents, with the FFR hitting cycle terminal at 2.75-3.00%.
Global Economic Update & Strategic Investment Outlook Q2 2014Cohen and Company
An informative overview of the current state of the global economy and the many factors that impact investment strategies, and a look at domestic economic indicators that may impact them.
Ivo Pezzuto - "FED BITES THE BULLET - Implements First Rate Hike in Nearly a ...Dr. Ivo Pezzuto
The US Federal Reserve finally bites the bullet, increasing the
FFR – a key short-term interest rate – by quarter of a per cent.
With this, the regulator has clearly signaled that it might take
similar actions in future, if need arises, to take the economy
towards full recovery.
The SVB Asset Management Economic Report, Q1 2017, is a review of and outlook on economic and market factors that impact global markets and business health.
In this edition, the team discusses the Fed's recent activity and its intentions to raise benchmark interest rates three times in 2017. The report also focuses on how the new U.S. administration will impact domestic and global economies.
Financial Wealth Management benefits a basic knowledge of the current economic climate. Download this free report on the state of the economy, government, and how they affect YOU.
The fourth quarter of 2012 brought an abundance of angst and speculation surrounding how, and
when, Congress might resolve its ongoing battle over fiscal policy. As investors worried about the
impact of the tax and spending provisions the Budget Control Act of 2011 would have on an already
fragile economy, Congress showed little inclination to reach a bi-partisan compromise. For more info: www.nafcu.org/nifcus
Since the previous meeting of the Monetary Policy Committee (MPC), several risks to the inflation outlook have begun to materialise. While headline inflation is comfortably within the inflation target band, indications are that we have passed the low point of the current cycle. Developments in the international environment have placed upward pressure on the inflation trajectory, while the domestic growth outlook remains challenging.
Economy and equity markets: are they disconnected?Markets Beyond
Equity markets are not disconnected from the real economy and there no reason, under the current circumstances, to fear a market collapse. The S&P 500 is however no longer cheap.
Did you know total nonfarm payroll employment fell by 701,000 in March 2020, measuring the effects of COVID-19 and efforts to contain it? Employment in leisure and hospitality fell by 459,000, mainly in food services and drinking places. Notable declines also occurred in health care and social assistance, professional and business services, retail trade, and construction.
From the BPV Capital Management investment team comes our most recent update on capital markets. In this issue, we examine how the stabilizing global economy pushed equities, interest rates, and commodities higher in April.
North American Commercial Real Estate ReportChris Fyvie
We are pleased to share with you the our latest North American Research Report -covering approximately 70 metro areas - demonstrating that the office market in the United States and Canada will continue a steady growth, but will lack in the force and pace of prior cycles. However, positive market trends exist, including strong absorption and declining vacancy rates in all the major U.S. CBDs. Additionally, construction is increasing, but remains below historic highs.
Fed must relent. Our expectations now is for a state dependent (global financial conditions to stabilise, cushion rising debt repayment burden and allowing domestic leverage to level off, coupled with still moderate economic growth/inflation, policy options to widen positively globally, especially in China) Fed relent with scope for a final 25-50bps, if any (pause otherwise), in late 2019/2020, should the cycle extents, with the FFR hitting cycle terminal at 2.75-3.00%.
Global Economic Update & Strategic Investment Outlook Q2 2014Cohen and Company
An informative overview of the current state of the global economy and the many factors that impact investment strategies, and a look at domestic economic indicators that may impact them.
Ivo Pezzuto - "FED BITES THE BULLET - Implements First Rate Hike in Nearly a ...Dr. Ivo Pezzuto
The US Federal Reserve finally bites the bullet, increasing the
FFR – a key short-term interest rate – by quarter of a per cent.
With this, the regulator has clearly signaled that it might take
similar actions in future, if need arises, to take the economy
towards full recovery.
The SVB Asset Management Economic Report, Q1 2017, is a review of and outlook on economic and market factors that impact global markets and business health.
In this edition, the team discusses the Fed's recent activity and its intentions to raise benchmark interest rates three times in 2017. The report also focuses on how the new U.S. administration will impact domestic and global economies.
Financial Wealth Management benefits a basic knowledge of the current economic climate. Download this free report on the state of the economy, government, and how they affect YOU.
The fourth quarter of 2012 brought an abundance of angst and speculation surrounding how, and
when, Congress might resolve its ongoing battle over fiscal policy. As investors worried about the
impact of the tax and spending provisions the Budget Control Act of 2011 would have on an already
fragile economy, Congress showed little inclination to reach a bi-partisan compromise. For more info: www.nafcu.org/nifcus
Since the previous meeting of the Monetary Policy Committee (MPC), several risks to the inflation outlook have begun to materialise. While headline inflation is comfortably within the inflation target band, indications are that we have passed the low point of the current cycle. Developments in the international environment have placed upward pressure on the inflation trajectory, while the domestic growth outlook remains challenging.
Economy and equity markets: are they disconnected?Markets Beyond
Equity markets are not disconnected from the real economy and there no reason, under the current circumstances, to fear a market collapse. The S&P 500 is however no longer cheap.
Did you know total nonfarm payroll employment fell by 701,000 in March 2020, measuring the effects of COVID-19 and efforts to contain it? Employment in leisure and hospitality fell by 459,000, mainly in food services and drinking places. Notable declines also occurred in health care and social assistance, professional and business services, retail trade, and construction.
From the BPV Capital Management investment team comes our most recent update on capital markets. In this issue, we examine how the stabilizing global economy pushed equities, interest rates, and commodities higher in April.
North American Commercial Real Estate ReportChris Fyvie
We are pleased to share with you the our latest North American Research Report -covering approximately 70 metro areas - demonstrating that the office market in the United States and Canada will continue a steady growth, but will lack in the force and pace of prior cycles. However, positive market trends exist, including strong absorption and declining vacancy rates in all the major U.S. CBDs. Additionally, construction is increasing, but remains below historic highs.
Anika Khan, senior economist, Wells Fargo shares her 2015 Economic Outlook for the construction industry at an AEM regional membership session at Cummins.
CRFB_Fiscal Policy in High Inflation.pptxCRFBGraphics
This slide deck was used by Marc Goldwein, Senior Vice President and Senior Policy Director for the Committee for a Responsible Federal Budget, during a recent presentation on inflation and fiscal policy
The Federal Reserve is unlikely to hike its policy rate from 0.25-0.50% at its 16th March 2016 meeting and may have little choice but to revise down its expectations to around 3 hikes for 2016 in its accompanying projections. In the 16th December “dot-chart”, the median expectation among the 10 voting Federal Open Market Committee (FOMC) members and 7 non-voting members was for four hikes this year (the weighted average was for a slightly less hawkish 91bp of hikes).
Ten years of job growth were wiped out in one month, when 20.8 million jobs were lost in April 2020. In comparison, a total of 8.7 million jobs were lost during the Great Recession. The economy added back 1.8 million jobs in July 2020, marketing the third consecutive month of jobs gains, yet remained 12.8 million jobs below the pre-pandemic level.
From the BPV Capital Management investment team comes our most recent update on capital markets. In this issue, we examine the Brexit vote and global uncertainty and market volatility as a result of that vote.
From the BPV Capital Management investment team comes our most recent update on capital markets. In this issue, we examine how the stabilizing global economy pushed equities and interest rates higher in May.
Market growth has come despite trade wars between the United States and other trade partners, particularly China. Stocks propelled forward in July due to favorable economic indicators and encouraging corporate earnings reports.
Diaporama utilisé par Vincent Juvyns, stratégiste des marchés chez JP Morgan Asset Management, lors du webinaire qu'il a animé pour le Forum financier, le 12 octobre 2020.
A more simplified and reader-friendly version of P.K Basu's - India Economic Outlook - 2014. It deduces from past trends and outlines the current economic scenario around the world and its implications on the Indian economy.
1. February 26, 2016
Joshua Moews
joshua.moews@me.com
KEY ECONOMIC STATISTICS
US‐CPI, Month Jan‐2016 0.00%
US‐CPI, Annual Jan‐2016 1.40%
US‐CPI (CORE), Annual Jan‐2016 2.20%
US‐PCE, Annual Jan‐2016 1.30%
US‐PCE (CORE), Annual Jan‐2016 1.70%
US‐JOLTS Dec‐2015 5.6M
US‐UNEMPOYMENT Feb‐2016 4.90%
US‐LAB PART. Feb‐2016 62.90%
BENCHMARK YIELDS & CHANGE OVER 1‐MONTH
US DEBT MARKET MONTH CHG 02/26/2016
10 YEAR YIELD UST ‐0.18% 1.55%
10 YEAR YIELD MMD 0.05% 1.76%
10 YEAR LIBOR SWAP ‐0.20% 1.60%
30 YEAR YIELD UST ‐0.12% 2.63%
30 YEAR YIELD MMD 0.05% 2.79%
30 YEAR LIBOR SWAP ‐0.16% 2.10%
30 YEAR YIELD CORP ‐0.09% 3.96%
COMMODITIES & EXCHANGE RATES
GOLD (London Bullion) 11% 1,231.00
OIL (FRED—WTI) ‐6% 31.65
USD INDEX (FRED trade‐weighted) ‐1.03% 124.04
EUR/USD (price/base) ‐0.77% 0.91
MONTH CHG 02/26/2016
Florida New Issues –
The School District of St. Johns County, Flor-
ida sold approximately $42.8M of Moody’s
A1 S&P AA- debt on February 3, 2016 due
October 1, 2025. Low coupons for the first
two years were followed by 5% thereafter.
Spread to MMD rose to 36bps ten years out
the curve at final maturity in the negotiated
sale.
Florida State Board of Education sold
$116.72M in one of the few competitive sales
of the month. Sold February 3, 2016 and due
June 1, 2028, the Moody’s Aa1 issue priced at
5bps spread to MMD twelve years out the
curve at final maturity. Coupons on the
bonds were 5% with a 3% coupon on the
2026 maturity.
City of Hollywood, Florida sold $36.92M in a
negotiated sale on February 18, 2016 due July
1, 2031. Coupons generally were 5% with
the exception of the final maturity at 3%.
Spread to MMD on the Moody’s A1 debt
rose as high as 90 bps 15 years out the curve
with the five previous maturities pricing at a
50 bps spread.
Liquidity of Municipal Bonds -
Janet Yellen in testimony to the Senate Bank-
ing Committee dismissed the US House of
Representatives bill that requires the Federal
Reserve, FDIC, and Comptroller of the Cur-
rency to recognize certain municipal securi-
ties as Level 2A High Liquid Assets. The Fed
previously proposed a classification of 2B –
less advantageous as this eliminates invest-
ment from 2A High Liquid Asset investors.
Southeast municipal bond issuance marked a
five year high in 2015 as pent up demand and
continued low interest rates moved borrow-
ers to act. The approximately $68.78M sold
by 11 states in the region during 2015 is the
highest level since the end on the BAB pro-
gram in 2010. Compared to 2014 refunding
issues were up 31%, new money up 35.7%,
and combined issues up 76%. Negotiated
transactions were up 61%, competitive trans-
actions up 18%, and private placements fell
compared to 2014. This according to data
reported by Thomas Reuters and the Bond
Buyer.
Fed & Interest Rates –
The Fed is likely to hold off on interest rate
increases at the March meeting. Positive
economic data continues to roll in, including
recent jumps in inflation indicators – a wel-
come sign as inflation continues run below
the feds 2% target. The futures market, ac-
cording to the CME Group Fedwatch, is put-
ting little probability on a rate increase at the
upcoming meeting.
Municipal interest rates continued to fall from
levels around 2.32% 10 years out the curve in
July 2015 to comparable levels of 1.76% at
the end of the February. Year to date high
credit quality MMD-30 year is down approxi-
mately 15bps and MMD-10 year down ap-
proximately 2bps. Treasury yields have
shown larger drops with the 10-year down
51bps and the 30-year down 38bps year to
date. Taxable credit spreads continue to
widen, the Baa to UST spread rose to 2.69%.
Tax exempt credit spreads have conversely
tighten some, the MMD-BBB to MMD-AAA
spread fell to 89bps. The percentage of
MMD/UST rose to around 100% after falling
to as low as 82% at the beginning of the year.
Both 10-year MMD and UST ended the
month at approximately 1.76%, 30-Year UST
at 2.63%, and MMD-30 year at 2.8%.
The 10 year LIBOR swap rate at month end
was slightly lower at 1.6%; 20bps below
where it started the month. High credit tax-
able 30 year corporate bonds fell to approxi-
mately 3.96% from 4.05% at the end of Janu-
ary. The dollar has started the year generally
weaker, oil strengthened slightly throughout
the month, gold is up over 6% year to date,
and utility equities rode lower yields to 6%
price gains year to date. The US equity mar-
ket remains down for the year with the
S&P500 down approximately 4% and most
sectors other than utilities following suit.
Financials are down over 11% year to date as
of the end of February.
Economics –
Both PCE and CPI were up 1.3% and 1.4%
respectively in January compare to 12-
months prior – the largest gains in over a
year. Unemployment fell to 4.9% in February
and labor force participation continued higher
to 62.9%. The JOLTS report continued to
indicate strong employment opportunities
with 5.6M job vacancies as of December 2015
up approximately 200,000 from the previous
month. Strong economic data could lead to
talk of another fed rate hike at the April/June
meeting. But most predictions continue to
dismiss the idea of a rate hike in March.
(See corresponding charts on attached pages)