As nearly three years of lockdowns come to an end in China, will 2023 be a turning point for equity investors? Without a doubt, China’s equity risk premium is higher than other markets. As investment professionals with more than 25
The wisdom of crowds can be powerful. But in times of heightened uncertainty, it can be helpful to understand potential risks. At the moment, markets appear to be crystallising around a hopeful outlook for 2023. Asset prices suggest inflation will
Last autumn, I thought we were on the verge of a significant recession across the major European economies. I expected real gross domestic product1 (GDP) to contract in the second half of 2022 and then fall in 2023 by 1-2%
Quarterly macro and market insights: Markets rebounded in the fourth quarter of 2022, closing a year marked by high volatility as the US Federal Reserve (Fed) reset its monetary policy path. US equities gained, credit spreads tightened and interest rate
The full reopening of Japanese borders has been a boon to businesses as the country comes to terms with the hard reality of co-existing with COVID. But with the world grappling with slowing growth and pressing concerns like geopolitical …
Jared Franz, for example, says the Fed will keep rates higher for longer, yet when the economy recovers, it will be stronger than prior rebounds. Meanwhile, Robert Lind argues that European policymakers will likely run looser fiscal policies and tolerate
As the risk of recession looms large over financial markets, how will securitised credit fare? It’s a growing area of bond markets that has become an important anchor of some actively managed, fixed income portfolios. Portfolio manager Xavier Goss discusses
The global environment led to sharp outflows from EM debt markets in 2022. The rise in US interest rates (and increase in EM inflation), combined with the increase in general risk premium, reduced the relative attractiveness of EM debt …
Key takeaways Global factors weighing on emerging market debt in 2022 look likely to continue in 2023, but high starting yields within EM local currency debt could help offset subsequent price volatility, while negative outcomes appear to be priced in
Below are some takeaways by Capital Group’s emerging market sovereign debt analyst Thomas Kontchou on important economic and policy considerations given the leftist candidate Luiz Inácio Lula da Silva’s victory in Brazil’s presidential election. The leftist Workers’ Party candidate Luiz
Recessions are painful, no doubt about it. But they are necessary to clean out the excesses of prior growth periods, especially the more or less uninterrupted growth investors have enjoyed over the past decade.
Mike Gitlin, Capital Group’s head of fixed income, sets out the importance of investing in bond funds that deliver on their stated objective. He also explains what differentiates Capital Group from industry peers. We’ve heard you talk about the four
Global stocks rose as investors welcomed signs that inflation may have peaked in key markets around the world. Consumer price increases — while still high on a historical basis — moderated in the U.S., Europe and …
The full reopening of Japanese borders has been a boon to businesses as the country comes to terms with the hard reality of co-existing with COVID. But with the world grappling with slowing growth and pressing concerns like geopolitical …
There’s a new reality taking shape in global markets. Many commentators are focusing on the rotation from growth to value, but I think that view is too simplistic. Some investors may be hoping for a return to normal after central
China’s once-in-a-decade census revealed some interesting demographic issues. The country has 264 million people aged 60 and above, which equates to 18.7% of the population, considerably higher than 13% in 2010. The 12 million births …
Growth strategies have long overshadowed dividend strategies. However, changing macroeconomic conditions have turned the tables and dividend investments are enjoying their time in the sun. While this coincides with value’s long-awaited comeback, value and dividend stocks have distinctive characteristics. We
Key takeaways Chinese equities have had a volatile 2022 so far as the country has had to navigate COVID-19 restrictions, property debt concerns and supply chain constraints among many other headwinds China is becoming an increasingly selective market that requires
Capital Group portfolio managers consider the latest interest rate rise from the US Federal Reserve and what we can surmise from the slower pace of hiking. The US Federal Reserve has slowed the pace of its interest rate hikes but
How fast things can change: there was a major shortage of semiconductors at the start of the pandemic, and now the industry is grappling with too much inventory in parts of the supply chain. This has led to a sell-off
Hydrogen can be used as a carrier of energy, and as an input into chemical and industrial processes. Clean hydrogen is, therefore, a crucial decarbonisation tool for a range of industrial activities including steel, aluminium, iron and chemical production. We
I am cautious on the Asian sovereign outlook due to tightening global financial conditions, weaker Chinese growth and rising regional inflation. Asian sovereign bonds are perhaps more resilient against these waves than many other regions due to the large pool
Key takeaways Investment grade corporate bonds could play a vital role in terms of adding balance and resilience as part of a core fixed income allocation within a balanced portfolio. The asset class has provided an attractive alternative to developed
Obesity has quickly reached global epidemic proportions over recent years with levels close to tripling since 1975. Despite the hugely detrimental impact this is having on people’s health and growing burden on healthcare systems around the world, however, medical intervention
Health care has been the worst-returning sector in China since the peak of the market last year. Behind this decline has been geopolitical tensions, macroeconomic risks and domestic policy. Long term, the outlook is still encouraging, however, with demographics supporting
While recession risk is clearly elevated around the world, they are notoriously hard to predict with any accuracy, in terms of timing, duration or impact. Rather than forecasting exactly when global markets might fall into recession this time, the following
It is hard to believe but just under eight weeks ago, Kwasi Kwarteng, then UK chancellor, announced his ‘growth plan’ comprising the Truss government’s energy price guarantee and large tax cuts. At the time, I described the announcement as radical
The market pivot away from growth stocks over the past year has brought the dividend component of total stock returns back into focus. Dividend-payers in the S&P 500 Index have outpaced the broader market by a significant margin over the
Hydrogen can be used as a carrier of energy, and as an input into chemical and industrial processes. Clean hydrogen is, therefore, a crucial decarbonisation tool for a range of industrial activities including steel, aluminium, iron and chemical production. We
Generating income is a key role of fixed income. For investors, the durability of income streams becomes more important amid heightened volatility in both equity and bond markets. Capital Group portfolio manager Damien McCann provides context around …
Investors looking to access a broad range of ESG themes are therefore tasked with buying several singlethematic or narrowly focused funds. This underscores the need for all-inone, fully diversified solutions that target a wide array of sustainable goals through one
Below are some takeaways by Capital Group’s emerging market sovereign debt analyst Thomas Kontchou on important economic and policy considerations given the leftist candidate Luiz Inácio Lula da Silva’s victory in Brazil’s presidential election.
As difficult as Chinese equities have been over the past year, weakness in the health care sector has been notable. While President Biden’s announcement of a plan to boost US biomanufacturing sent shares of Chinese health care companies tumbling over
With the book now closed on the 20th Congress of the Chinese Communist Party (CCP), market watchers are busy analysing the various personnel and policy developments as they try to plot the next five years and beyond for …
2022 has not been a great time for bonds. Year-to-date, the Bloomberg Global Aggregate Index and Bloomberg US Treasury Index returned-20% and -13%, respectively. 1 Meanwhile,risky asset classesalso sold off significantly, whichhas led to many investors questioningthe role of bonds
Sharp shifts in expectations for central bank policy and the resultant market volatility underscore the challenges facing investors. The third quarter featured a tale of two halves: An initial rally across markets turned into a selloff. Hopes for less restrictive
It has been an unrelenting year of negative headlines, with a war in Ukraine, inflation concerns and recession fears jolting investors into a frenzy. Capital Group Investment Director David Cheng sat down with Portfolio Manager Luis Freitas de Oliveira to
Below are some takeaways by Capital Group’s emerging market sovereign debt analyst Thomas Kontchou on important economic and policy considerations given the leftist candidate Luiz Inácio Lula da Silva’s victory in Brazil’s presidential election. The leftist Workers’ Party candidate Luiz
Emerging market debt (EMD) has already broadened and deepened significantly in the last few decades and as the asset class has developed, it has become more appealing to a broader investor base. Issuance has increased, thereby improving liquidity. Yield curves
As difficult as Chinese equities have been over the past year, weakness in the health care sector has been notable. While President Biden’s announcement of a plan to boost US biomanufacturing sent shares of Chinese health care companies tumbling over
Key takeaways Chinese equities have had a volatile 2022 so far as the country has had to navigate COVID-19 restrictions, property debt concerns and supply chain constraints among many other headwinds China is becoming an increasingly selective market that requires
Liz Truss’s defenestration last week exposed deep divisions over economic policy within the UK government and Conservative party. In winning the general election in 2019, Boris Johnson concealed these divisions by promising both higher public spending to his new voters
Quarterly Fixed Income Perspectives from Capital Group’s fixed income team: The combination of persistently high inflation, aggressive central banks and tightening financial conditions is weighing on financial markets and global growth outlooks. While valuations across many sectors look compelling after
Emerging market (EM) bonds are a strategic holding for many investors. But the desired result from an allocation to emerging market debt cannot be achieved without first considering the attributes of hard- and local currency-denominated bonds — the two broad
A rapid shift in the outlook for the global economy – punctuated by soaring inflation, Europe’s deepening woes and increasing fears of a worldwide recession – is having an enormous impact on currency markets. The US dollar has continued to climb
Quarterly macro and market insights: Sharp shifts in expectations for central bank policy and the resultant market volatility underscore the challenges facing investors. The third quarter featured a tale of two halves: An initial rally across markets turned into a
Liz Truss’s defenestration last week exposed deep divisions over economic policy within the UK government and Conservative party. In winning the general election in 2019, Boris Johnson concealed these divisions by promising both higher public spending to his new voters
After a long hiatus, the resurgence of inflation has become a key concern for investors over the past year. Central banks are moving towards a tighter monetary stance as they seek to tame long-term inflation expectations. With falling real incomes
It has been a challenging year for fixed income markets in 2022 amid rising inflation and slowing global growth. While uncertainty is likely to remain elevated, today’s starting yields offer an attractive entry point for long-term investors. Yields across sectors
Mike Gitlin, Capital Group’s head of fixed income, sets out the importance of investing in bond funds that deliver on their stated objective. He also explains what differentiates Capital Group from industry peers. We’ve heard you talk about the four
