Time to Rethink the Role of Emerging Market Bonds
Emerging markets have done well this year and should continue to attract investor interest around the globe. Latin America is leading year-to-date.
The Barbell strategy involves putting half your portfolio in defensive, low-beta sectors or assets and the other half in aggressive, high-beta sectors or assets.
Investors are stepping back into emerging market bonds after removing billions of dollars from emerging markets in 2016.
Strong investor interest in emerging market debt has continued despite adverse political and economic issues in some countries.
According to a recent BofA Merrill Lynch Global Investment strategy report, emerging markets are expected to grow at a modest pace of 4.7% in 2017.
Negative bond yields in Japan and low Fed funds rates in the United States and the Eurozone were one reason emerging market bonds performed well in 2016.
The FTC (Federal Trade Commission) has approved the $25 billion acquisition of St. Jude Medical (STJ) by Abbott Laboratories (ABT) subject to certain conditions.
Claris Injectables’ portfolio is expected to complement Baxter’s leading presence in the renal and hospital products segment.
The merger deal between Abbott Laboratories (ABT) and Alere (ALR) has become an extended battle, and Wall Street analysts have been closely watching the ongoing developments in this deal.
On December 7, 2016, Scott Stoffel, divisional vice president of external communications at Abbott Laboratories, noted, “Alere is no longer the company Abbott agreed to buy 10 months ago.”
Three months after announcing a $5.8 billion deal in which Abbott Laboratories (ABT) would buy Alere (ALR), Alere rejected Abbott’s $50 million offer to end the deal. On December 7, Abbott sued Alere to terminate the deal.
As of December 2, 2016, Sherwin-Williams’s one-year forward EV-to-EBITDA stood at 11.9x, while PPG’s was 10.4x.
Negative bond yields in Japan and the Eurozone, coupled with very low federal funds rates in the United States, are part of why emerging market bonds and currencies have performed so well in 2016.
Relative strength is something that we have used for almost 30 years. It is a methodology of simply dividing one thing by another.
Although the markets have surged to record highs in the last two months, there are early warning signs you should watch. The recent decline came on Friday, September 9.
Volatility (VXX) (XIV) typically moves higher in the latter part of the year, especially in September and October, and gradually recedes after that.
The relationship between the CBOE Volatility Index (or VIX) and the spread between high-yield bonds over ten-year Treasuries is highly correlated.
There are reasons to be hopeful that the recently improved tone in the economic data could persist over the second half of 2016.
The three US equity indexes that we review in this weekly series rose from August 2–9, 2016, due to a lack of attractive investment alternatives.
Asset managers and hedge funds have made gains from Brexit. Macro strategies and shorting the pound or a rush to safe-haven gold have reaped gains for hedge funds.