Though growth in most of the developed world, as well as in China, does appear to be decelerating, there are a few bright spots, including India and the United States.
The International Monetary Fund (or IMF), for instance, reduced its estimates for global growth, and many investors are now worried that another global recession could be on the horizon.
Most major emerging economies are engaging in various forms of multi-year reform programs in hopes of making their growth less volatile and their financial systems more stable.
Asset-price bubbles become less bubbly, as evident in China’s “total social financing” indicator becoming more under control. We expect China’s (FXI) overheated housing market to cool down, assuming the Chinese…
Of course, a strengthening U.S. economy may have a downside. If the Federal Reserve (or Fed) increases interest rates too soon or by too much, markets could be rattled.
Certainly, the world is awash in geopolitical uncertainty and this is likely to continue. But good news on the U.S. economic front should help temper worsening geopolitical tensions and slowing growth in Europe.
The other distinguishing characteristic of recent equity market moves is the growing divergence between market segments. Different market segments have different sensitivities to changes in monetary policy.
Goldman Sachs (GS) is a U.S. multi-national investment banking firm. It wants to introduce a series of active ETFs in the U.S.
A preferred stock is a type of hybrid security that has bond and stock-like characteristics. It pays regular dividends like a bond. However, it has perpetual existence like a stock.
Returns reflect gain or loss in the market price of the ETF during that period. Volatility measures the variation in the ETF’s price over the stated time period.
Two weeks after State Street (STT) launched its SPDR MSCI World Quality Mix ETF (QWLD) on June 4, 2014, JPMorgan (JPM) debuted on the ETF market.
The American markets have outperformed the others, generating handsome returns of 36.6% since January 2013. With the U.S. recovery slowly gathering steam, the stellar run could continue.
Geopolitical tensions in the form of the Ukraine-Russia (or RSX) conflict, unrest in Syria, and the worsening Ebola outbreak in Africa have dampened investor confidence.
In my opinion, there was no significant or obvious catalyst for the sell-off. Instead, Thursday’s weakness appears to have been a case of lingering geopolitical risks running into market complacency and some stretched valuations.
Looking forward, though I do expect that market gains will likely slow and become more volatile, I believe that global stocks will finish 2014 higher.
With global equities up more than 42% since their bottom last June, many investors are wondering: “Is it too late to move cash from the sidelines to stocks?” No, says Russ, and he offers three ideas for where find value today.
Despite some signs that Chinese growth momentum is reversing from previous highs, the Chinese economy is still growing at a decent pace and government officials seem committed to growth of around 7%.
How should investors adjust their portfolios for slowly rising rates? Probably the simplest prescription may be to shift the portfolio mix toward stocks, which historically have improved portfolio performance during periods of rising rates.
While Russ doesn’t foresee a bond market meltdown, he does expect that rates will rise in coming years and he offers three suggestions for positioning equity portfolios in preparation.
We are starting to see evidence that monetary policies in the United States and the United Kingdom will further diverge from those in Europe, and market segment performance is also varying.