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. (more…)
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 17, 2013 by Paresh Upadhyaya
Last night Congress reached an agreement to raise the debt limit and end the 16-day shutdown. After all the acrimony and tense negotiations, the deal passed by a comfortable margin with 81-18 vote in the Senate and 285-144 in the House.
Key details of the deal:
- The government reopens on October 17, 2013.
- Congress will provide spending authority through January 15, 2014 at the same spending level in effect prior to the shutdown.
- The debt ceiling is extended until February 7, 2014.
- Reality check: the real deadline will be sometime in mid-March, according to Goldman Sachs. The agreement allows the U.S. Treasury to utilize bookkeeping strategies known as “extraordinary measures” once the debt limit is breached on February 7th. (more…)
Filed under: Equity Market Insights, Fixed Income Market Insights, GDP, Macroeconomics, Mutual Fund Industry, Paresh Upadhyaya, Political | Tagged: Fed policy, Interest rates, rate expectations, sequester | Leave a Comment »
Posted on October 14, 2013 by Sam Wardwell
Wardwell’s Weekly Market Report
Observations on the Capital Markets – Week Ended October 11, 2013
- Washington watch: no deal yet, but the parties appear to have begun to look for a deal (as opposed to a crisis they can blame on the other party)
- A couple of debt ceiling tidbits
- Last week in the capital markets: money markets tremble, equity markets say “what, me worry?”
- Obama nominated Janet Yellen to be next Fed chair
- FOMC minutes showed that the decision not to taper was “a relatively close call” despite the 9-1 final vote; the key reason to delay was “risk management”.
- Initial unemployment claims jumped 66k to 374k . . . mostly noise
- Other U.S. data wasn’t really upbeat
- Next week: waiting for Washington (more…)
Filed under: Contributors, Equity Market Insights, Fixed Income Market Insights, GDP, Macroeconomics, Mutual Fund Industry, Political, Sam Wardwell | Tagged: Congress, Washington Budget Debate, Yellen | 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. (more…)
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 23, 2013 by Sam Wardwell
Wardwell’s Weekly Market Report
Observations on Events and the Capital Markets – Week Ended September 20, 2013
- Before the Fed announcement: a batch of pretty solid economic reports
- After the Fed announcement: still more solid economic reports
- More progress on the budget than meets the eye of the T.V. networks
- Fed watch: speeches galore
On Monday, Larry Summers exited the pool of candidates for the next Federal Reserve (Fed) chairman. (Only the timing was really a surprise.) On Wednesday, the Fed didn’t taper and de-emphasized several of the targets they’d set earlier. (Big surprise versus consensus - not central bank best practices). Municipal bond offerings by Puerto Rico, California, and Illinois were met with strong investor demand. (more…)
Filed under: Contributors, Equity Market Insights, Europe, Fixed Income Market Insights, GDP, Macroeconomics, Mutual Fund Industry, Political, Sam Wardwell | Tagged: economic indicators, Fed, printing money, Summers | Leave a Comment »
Posted on September 13, 2013 by Mike Temple
Many investors were conditioned to accept that the economy would be in the rehabilitation ward for the foreseeable future, rates would remain low, and monetary stimulus would continue unabated. It was an increasingly dangerous mindset. Now that’s changing with the slow but steady recovery of the economy and the Federal Reserve’s announcement in August that it may begin “tapering” its billions in monthly bond purchases designed to keep rates low and boost asset prices. These fiscal, financial and policy changes usher in the next great risk for bond investors: the potential return of higher interest rates. So I continue on the subject of “duration” and the risk that it poses to fixed income investors. (more…)
Filed under: Fixed Income Market Insights, Macroeconomics, Mike Temple, Mutual Fund Industry | Tagged: crowded trade, duration, investor portfolios, rising interest rates, safe haven | Leave a Comment »
Posted on April 18, 2013 by Paresh Upadhyaya
Central banks have taken numerous measures to inject liquidity into their domestic economies. This has helped boost risk appetite and investor sentiment.
- The European Central Bank’s stabilization programs have successfully reduced financial market and sovereign tail risk for banks.
- Global growth troughed in Q2 2012, but has been on an upward trend since.
- Market concerns over the U.S. debt situation are easing as the U.S. economy proved surprisingly resilient to many uncertainties.
As a result, investors are concerned that bond yields, which move inversely to prices, have bottomed for the U.S. 10-year Treasury and will surge, raising fears of a bond bear market along the lines of the Great Bond Bear Market of 1994. (more…)
Filed under: Equity Market Insights, Fixed Income Market Insights, Macroeconomics, Mutual Fund Industry, Paresh Upadhyaya, Political, Uncategorized | Tagged: Central Banks, debt to gdp, ECB, fundamentals, inflation expectations, Interest rates, interest rates rise, rates will rise, rising interest rates, rising yields, where should Treasury yields be trading, where yields should be | Leave a Comment »
Posted on November 29, 2012 by Sam Wardwell
I was recently asked, “What will be the impact if Bernanke is replaced? Could a new Fed Chairman increase rates sooner than expected and put major pressure on the fixed income market?” My response: I see three scenarios under which rates might rise significantly:
- Fed tightening…highly unlikely in the next year
- U.S. investor sentiment shift…most likely
- Global loss of confidence…least likely, most damaging (more…)
Filed under: Contributors, Equity Market Insights, Fixed Income Market Insights, Macroeconomics, Mutual Fund Industry, Political, Sam Wardwell | Leave a Comment »
Posted on November 29, 2012 by Mike Temple
An insightful client exclaimed to me last week, after I had enumerated the many risks facing bond market investors, that he felt like a deer in the headlights. “Bear” with me for a paragraph or two while I elaborate. . . Imagine you’re a deer on a lonely stretch of highway late at night. To either side are high walls of rock (the psychologically difficult-to-scale barriers of asset allocation into equities). Behind is the long uphill that bonds have coasted on (with some bumps) for the past 30+ years. In front, coming closer every second is a set of large, bright headlights. Scary, huh? (more…)
Filed under: Contributors, Fixed Income Market Insights, Macroeconomics, Mike Temple, Mutual Fund Industry, Political, Uncategorized | Leave a Comment »