Posted on February 24, 2014 by Giordano Lombardo
As we begin 2014, economies in developed countries are gathering momentum and central banks are retaining accommodative monetary policies, which extend support for risky assets. U.S. corporate capital (CAPEX) expenditure is being revived, marking an improvement necessary for upgrading the overall economic growth. In this respect, recent disappointing figures on the job market seem more of a transient occurrence than a trend reversal. Nevertheless, key macro figures are still under close watch amid concerns that the economy is actually getting stronger and can withstand the gradual withdrawal of the exceptional monetary stimulus. Continue reading
Filed under: Europe, Giordano Lombardo, Macroeconomics, United States | Tagged: Central Banks, deflation, ECB, emerging markets, Fed Action, Fed policy, Fed tapering, GDP, Giordano Lombardo, global economy, inflation, monetary policy, QE, QE Tapering, tapering, the Fed | Leave a comment »
Posted on February 24, 2014 by Giordano Lombardo
Pioneer Investments’ Head of Global Asset Allocation Research, Monica Defend, assesses the progress of Abenomics – the series of economic reforms implemented by the government of Prime Minister Shinzo Abe – and discusses her outlook for the Japanese market.
What has the new policy course known as Abenomics achieved and what is yet to be done?
Japan managed to exit a long stagnation, also marked by deflation, thanks to aggressive monetary expansion. That was probably the easy part of Abenomics, as it got a major implicit endorsement from the U.S. Federal Reserve; Japan’s quantitative easing accounted for an even larger part of GDP than the U.S. version, but had the Fed not led the way with quantitative easing, we have legitimate doubts that it would have been as effective.
Filed under: Equity Market Insights, Fixed Income Market Insights, Giordano Lombardo, Macroeconomics, Political | Tagged: Abenomics, Giordano Lombardo, Japan, Japanese economic reforms, Monica Defend, Shinzo Abe | Leave a comment »
Posted on December 26, 2013 by Giordano Lombardo
In a recent conversation, my colleague Mauro Ratto, Head of Emerging Markets, helped boil down China’s recent economic reform plan.
China’s “Breakthrough” in the Making
The ruling communist party’s gathering (also known as Plenum) in early November was followed closely by the expected announcement of a major plan of economic reforms. Three major reforms that were highlighted during the plenum concerned:
- State-Owned Enterprise Reform (SOEs)
- Financial Sector Reform
- Social Reform Continue reading
Filed under: Giordano Lombardo, Macroeconomics, Political | Tagged: China, china's economic reform, economic reform, emerging markets | Leave a comment »
Posted on December 11, 2013 by Giordano Lombardo
The last six years have witnessed the most severe financial crisis since the end of World War II, with household earning capacity and saving ability experiencing significant changes due to the downturn in the real economies. This challenging economic situation definitely affected household saving behavior, although the impact has been different in various countries – for some, the impact on household earning capacity was more intense than others. Continue reading
Filed under: Europe, Giordano Lombardo, Macroeconomics, United States | Tagged: 2007-2013, household savings, household wealth, saving trends, wealth trends | Leave a comment »
Posted on November 19, 2013 by Giordano Lombardo
The Current Market Reality: Economic Transitions, Equities & Alternatives
At this year’s Global Investment Forum, the discussion among Pioneer investment professionals was generally positive. Of course, everyone was conscious of the current market reality: that the major force behind recent positive, though benign, market trends is the unprecedented creation of liquidity and extremely loose stance of monetary policies around the world. Monetary policy alone cannot be the only conduit to a new economic model of income growth and job creation. Continue reading
Filed under: Equity Market Insights, Fixed Income Market Insights, Giordano Lombardo, Macroeconomics, Mutual Fund Industry, Political | Tagged: alternatives, diversification, economy, fiscal policy, markets, monetary policy, QE, tapering | Leave a comment »
Posted on October 7, 2013 by Giordano Lombardo
Recent market movements have reminded investors that the fixed income market is facing a secular change, after a 30-year-long bull market driven by a continuous decline in interest rates. I believe the announcements of the death of fixed income as an asset class are greatly exaggerated, and in order to face the new reality, fixed income investors and asset allocators need to adopt a significant change of approach. Continue reading
Filed under: Fixed Income Market Insights, Giordano Lombardo, Macroeconomics, Mutual Fund Industry | Tagged: Alternative Investments, Bonds, Central Banks, Fixed Income, Interest rates | Leave a comment »
Posted on September 19, 2013 by Giordano Lombardo
In a recent conversation, my colleague, Tanguy Le Saout, Head of European Fixed Income, offered these thoughts on the outlook of the European economy.
What brought renewed confidence in the Eurozone’s economy?
Gross Domestic Product (GDP) increased in the second quarter after six straight declines. Data expectations were on the optimistic side, but investors appeared to become more confident before the release, thanks to encouraging evidence from supposedly reliable forward-looking indicators. The global PMI (Purchasing Managers Index) rose above 50 this summer, indicating that a majority of surveyed companies expanded their activity, with the Euro Area providing good support for the first time in two years. The PMI staged a slow recovery about a year ago, whereas GDP data have been in “recession territory” until recently. That’s why the PMI has gained a reputation for being forward-looking. Continue reading
Filed under: Europe, Fixed Income Market Insights, Giordano Lombardo, Macroeconomics | Tagged: duration, ECB, Euro Debt Crisis, Eurozone, GDP, Giordano Lombardo, rising interest rates, Tanguy La Saout | Leave a comment »
Posted on August 30, 2013 by Giordano Lombardo
My colleagues Mauro Ratto, Head of Emerging Markets, and Yerlan Syzdykov, Head of Emerging Markets – Bond & High Yield, offered these thoughts on emerging markets.
The emerging markets (EM) bond space experienced significant changes in the last decade, surging in size, improving in quality, offering investors a composite asset class with higher liquidity, transparency and potential for diversification. Continue reading
Filed under: Fixed Income Market Insights, Giordano Lombardo | Tagged: emerging market debt, emerging markets, Giordano Lombardo, mauro ratto, Yerlan Syzdykov | Leave a comment »
Posted on August 12, 2013 by Giordano Lombardo
Two new important macro developments have surfaced recently, which deserve our attention for their likely impact on financial markets:
- The debate on the so-called tapering of the U.S. Federal Reserve’s (Fed) current loose monetary stance
- The changing economic outlook in China Continue reading
Filed under: Equity Market Insights, Europe, Fixed Income Market Insights, Giordano Lombardo, Macroeconomics | Tagged: China, China Central Bank, China's leadership, Chinese economy, emerging markets, Interest rates, SHIBOR crisis, tapering | Leave a comment »
Posted on July 16, 2013 by Giordano Lombardo
The following is a result of a recent conversation I had with Mauro Ratto, our Head of Emerging Markets, here at Pioneer Investments.
China’s stock market was down very sharply in June, with banks under severe pressure. Are investors right to fear that growth is at risk?
Banks are by far the top-weighted sector group in China, so there’s little chance for the broad market to buck the trend. Indeed the problem is sector-specific at first glance. Policy makers want to curb excess bank lending in an effort to make the industry better managed and more selective. The People’s Bank of China’s attitude suggests that banks are short of money after lending too much and thus deserve punishing interest rates to cover the shortfall. That’s very draconian and so different from the way developed countries regulate their banks.
Filed under: Giordano Lombardo, Macroeconomics, Political | Tagged: Central Banks, China, ECB, Fed policy, Giordano Lombardo, world economy | Leave a comment »