Four charts outline key observations and things investors should watch out for in the US, Europe, Japan and China.
The saying ‘sell in May and go away’ refuses itself to go away.
The US is shedding excess capacity at a faster rate than most of its developed world peers, which supports our outlook for inflation to strengthen and sharpens our focus on the risk of rates volatility.
Time-series and cross-sectional analysis support our expectation for US wage growth to pick up in the near future.
We believe the balance of secular drivers over the next several years is inflationary, as a range of factors that have suppressed prices over the past decade are reaching inflection points.
The weak transmission of growth to inflation in the developed world creates challenges for policymakers, raising the risks of a policy misstep.
Equity market volatility has increased sharply, with the S&P 500 index declining 4.1% on Monday, February 5. The VIX Index, a measure of implied equity market volatility, increased by 116%, the largest one-day percentage change in its history.
In 2017, Emerging Market Equities have returned +37%, significantly outperforming US and Developed Market Equities, which returned +21% and +22% respectively – this marks the strongest absolute and relative performance in eight years. Looking to 2018, we believe Emerging Markets could be in the early stages of a multi-year recovery underpinned by 1) growth acceleration 2) earnings revival and 3) attractive valuations.
Today the Financial Times' Fund Management supplement (FTfm) published an article titled "Goldman and Franklin top worst-selling fund ranking."
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Each week the Fixed Income team releases its views on macro strategies including duration, country and currency, and sector strategies such as securitized debt, corporate credit, emerging markets debt, government/agency, and municipals.
Our portfolio managers discuss the new consumer spending paradigm and the impact of ecommerce’s entry into supermarkets.
This Macro Insights follows up on the Outlook we released in July with a deep dive into the potential asset implications of the global QE retreat.
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