The Global Portfolio Strategies Group's economic outlook notes that global equity markets peaked in early April before falling sharply in May, as they had anticipated. While not compelled to reduce equity exposures, they recommend maintaining a neutral stance given ongoing economic and political uncertainties. They continue to favor U.S. equities over international ones, seeing the U.S. economy in better shape despite political uncertainty. Emerging markets have faced challenges from slowing growth and currency declines, but aggressive policy actions and cheaper valuations may provide a boost going forward. Markets are expected to remain volatile in this environment of uncertainties over the European situation, U.S. economy, and upcoming elections.
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.
As we enter the last quarter of 2013, US politicians are once again playing a game of brinkmanship; unfortunately one that could have dire consequences for the world’s economy. Politicians continue to entrench opposing positions rather than engage in positive action. It is highly unlikely that the entire US government will shut down as essential services will remain active, but nevertheless, investors dislike uncertainty and markets have been under pressure as the Third Quarter closed.
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 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.
As we enter the last quarter of 2013, US politicians are once again playing a game of brinkmanship; unfortunately one that could have dire consequences for the world’s economy. Politicians continue to entrench opposing positions rather than engage in positive action. It is highly unlikely that the entire US government will shut down as essential services will remain active, but nevertheless, investors dislike uncertainty and markets have been under pressure as the Third Quarter closed.
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.
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.
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.
Vanguard’s 2015 economic and investment outlookJoão Pinto
To treat the future with the deference it deserves, Vanguard believes that market forecasts are best viewed in a probabilistic framework.
This publication’s primary objectives are to describe the projected long-term return distributions that contribute to strategic asset allocation decisions and to present the rationale for the ranges and probabilities of potential outcomes.
We glade to introduce our firm M/S Megha Electrical Services as Govt. Licensed Electrical Contractors having experience of more than 9-10 years in the field. We undertake any type of Electrical Installation work such as Industrial wiring, Electrification of Machine Motor and street lighting, Capacitor connection, Erection and supply of Main Panel , MCC, PCC Panels with switchgear, making of earthing pits, specialty in all type H.T. & L.T. cable termination & Straight, T – type Cable jointing and all sorts of allied activities as far as electrical work are concerned. We have a strong & efficient team of technical wing to supervise and execute the work well within the schedule. Also we carry annual Electrical Maintenance Contract work. This would give you a fair amount of idea as to what sort of task can be entrusted upon us. We would now request you to please enlist our name in your mailing list and write to us as and when any work comes up at your end. We assure our best service at all the times and look forward for a valuable enquiry from you.
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.
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.
Vanguard’s 2015 economic and investment outlookJoão Pinto
To treat the future with the deference it deserves, Vanguard believes that market forecasts are best viewed in a probabilistic framework.
This publication’s primary objectives are to describe the projected long-term return distributions that contribute to strategic asset allocation decisions and to present the rationale for the ranges and probabilities of potential outcomes.
We glade to introduce our firm M/S Megha Electrical Services as Govt. Licensed Electrical Contractors having experience of more than 9-10 years in the field. We undertake any type of Electrical Installation work such as Industrial wiring, Electrification of Machine Motor and street lighting, Capacitor connection, Erection and supply of Main Panel , MCC, PCC Panels with switchgear, making of earthing pits, specialty in all type H.T. & L.T. cable termination & Straight, T – type Cable jointing and all sorts of allied activities as far as electrical work are concerned. We have a strong & efficient team of technical wing to supervise and execute the work well within the schedule. Also we carry annual Electrical Maintenance Contract work. This would give you a fair amount of idea as to what sort of task can be entrusted upon us. We would now request you to please enlist our name in your mailing list and write to us as and when any work comes up at your end. We assure our best service at all the times and look forward for a valuable enquiry from you.
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
Global bond markets fell in May and June, as investors contemplated the end of massive liquidity from the U.S. Federal Reserve’s bond-buying program. The fund’s overweight exposure to the strengthening U.S. dollar aided performance during the quarter, as did our holdings of commercial mortgage-backed securities. Our mortgage credit holdings and our allocation to high-yield bonds generated positive returns early in the period before investors began to shed risk in May, but the positions remained positive overall for the quarter. We have a generally positive outlook for global economic growth and are seeking to capitalize on opportunities in spread sectors exhibiting improved relative value.
If U.S. politics do not derail the recovery, pent-up demand can drive faster economic growth. Fixed-income outflows appear likely to continue, pushing rates higher.
No bubble trouble; stocks are still reasonably priced. This credit cycle has unique characteristics that continue to make high-yield bonds attractive. Interest-rate volatility poses greater risk than higher rates themselves.
Through all the market traumas of recent years, the crises in Greece, slowdown scares in China, US political gridlock, the collapse in oil prices, the wars and the migrant flows, investors prepared to weather short-term volatility have seen handsome returns on developed-economy equities since the depths of the financial crisis in 2008, with EUR and USD investors seeing only one modestly down year in 2011. There has also been good performance from high yield and investment grade corporate bonds, the laggards (since 2011) being investments connected to commodities and emerging markets.
Our analysis, set out in this Outlook, suggests that 2016 may deliver a fairly similar pattern. Temporary traumas could emanate from Federal Reserve tightening, reduced bond liquidity, renewed growth scares in China or geopolitics, but behind these is an underlying picture of ongoing expansion. The global economy is neither pushed up against capacity limits nor facing severe slack (except for commodities and energy), banking systems are healthy and debt levels seem more amber than red. Rapid growth seems unlikely, given aging populations (bar Africa and India) and sharing economy technologies that do not generate much Gross Domestic Product, but sensibly-priced assets do not need a booming economy to generate reasonable returns. At the time of writing (in late 2015), high yield and investment grade credits have spreads just above their quarter-century averages, giving them scope to weather gradual Fed tightening. Developed equities have valuations somewhat above historic norms on a price-earnings basis, but not on a price-book basis, and operational leverage (especially in the Eurozone) and consolidating oil prices should allow earnings growth to move from last year's negatives into the mid- to high-single digits. In short, we think developed equities and credits are well placed for another year of reasonable returns, with the dollar likely to be strong again as the Fed leads the monetary cycle. As for emerging markets, and the commodities on which many depend, a convincing general recovery looks some time away, but there is scope for some to move ahead of the pack, as discussed in a special article.
Of course there can always be risks that are not visible and Fed tightening has a habit of teasing these out, although usually not within its first year. But, equally, there could be upside surprises, if the USA finally moves toward solutions on taxing repatriated corporate cash and infrastructure spending or, more simply, the signals of rising confidence already visible in US and European consumer surveys translate into faster spending. We trust our readers will find the Investment Outlook 2016 to be of considerable interest for the coming year.