In "Debt Ceiling Outlook," J.P.Morgan provides a comprehensive explanation of the debt ceiling or limit, which caps the amount the federal government is authorized to borrow to fulfill its financial obligations. The debt limit doesn't sanction new spending but funds
In his paper "Currency Hedging Can Boost Yields and Reduce Volatility", T. Rowe Price points out a crucial but often overlooked investment opportunity. He posits that while foreign currency bonds may initially seem less appealing to U.S. investors due to
The guide "Investor’s guide to the debt ceiling" by BlackRock underscores potential market volatility in light of the ongoing debates among Congressional leaders regarding raising the US debt ceiling. Despite the looming uncertainty, BlackRock maintains confidence in Congress's ability to
The report titled "The US debt ceiling: Navigating a potential default" explores the prospects of a possible US debt ceiling showdown that could lead to a default. While previous such showdowns have been averted in time, the report estimates a
The discussion in "Macro musings: The Fed, payrolls, and what to make of it all" revolves around the Federal Reserve's decision to hike rates, the effect on market pricing, and the potential scenarios that might prompt a change. While the
In the text "Will the US dollar continue to weaken?" by Capital Group, the main theme revolves around the uncertainty of the US dollar's future and the factors that may influence its direction. The decade-long bull run of the greenback
In Morgan Stanley’s report, “Good news, yet markets miss the point,” the main theme revolves around developed markets losing momentum after a strong start to the year. Despite receding recession risks, job data indicates a cooling labor market, raising concerns
Amundi's report, "Financial stability concerns to tip the balance towards a US recession," unveils the escalating stress within the US banking sector, leading to increased funding costs and reduced lending. The author predicts a -1.1% shrink in the US economy
At the beginning of the year, the three major factors driving emerging market (EM) debt were US financial conditions, the dollar and global growth. All three factors look likely to have been changed by the current shock to the banking
Last week brought good news on US inflation but the declines were even more dramatic in Europe. However, core inflation in the Eurozone has yet to peak. We believe it will follow headline inflation lower but the ECB may want
The Federal Open Market Committee (FOMC) meeting held in March 2023 included projections of the most likely outcomes for real GDP growth, the unemployment rate, and inflation. Each participant's projections were based on their assessment of appropriate monetary policy and
In February, concerns about inflation caused a partial reversal of gains in the stock and bond markets, leading to a convergence between risky and risk-off assets. Strong US jobs and retail sales data, along with higher-than-expected inflation reports, led to
Uncertainty about the U.S. economic outlook has seen smaller companies bear the brunt of investor fears over the past year. Valuations have fallen to extreme lows, relative to larger companies, despite earnings holding up reasonably well. With the U.S. economy
Equity markets rallied from the beginning of the year into early February, driven by encouraging data regarding the health of the U.S. economy and improved economic outlooks in China and Europe that were supported by the reopening of the Chinese
Economic developments unfolding over the first few weeks of 2023 offer some hope that a 2023 soft landing for the US macroeconomy is at least possible. Moderating inflation and a muted February fed funds increase contribute to this hope in
Used vehicle prices are still well above normal after declining 14.9% in 2022 following nearly two years of unprecedented levels, according to the Manheim Used Vehicle Value Index (exhibit 1). Supply chain issues stemming from the pandemic, while now easing,
• German stagnation—rising insolvencies? German business insolvencies are rebounding albeit from a low level. • US real estate—trouble (still) ahead? Some housing market indicators have stabilized, but downside risks continue due to weaker domestic activity. The outlook for commercial real
Markets have started 2023 strongly as some of the headwinds that dominated markets in 2022 have started to dissipate. China has reopened its economy faster than expected; warm weather in the euro area has eased concerns over natural gas shortages;
Congress has taken action to raise the debt limit, temporarily suspend it, or revise how it is defined on 78 occasions since 1960.1 Given the potential consequences, failing to raise the debt ceiling should not be an option. However, this year,
Economies appear to be more resilient than expected. A strong US payroll gain in January encouraged talk of a soft landing and provoked a reversal of the recent uptrend in assets. I believe this will prove to be a temporary
The US Federal Reserve (Fed) downshifted at its February meeting, raising its benchmark interest rate by just 25 basis points (bps), as inflation has begun cooling in the US. This move was widely anticipated by markets, which have begun pricing
Natixis Investment Managers Solutions | Global Market Strategy: Given the resiliency shown by economic indicators, we rule out the risk for a severe recession both in the US and Europe. The outlook for a recession scenario has weakened thanks to
Stock Market Briefing: Selected P/E Ratios
Over the last two years, the world has witnessed a parabolic strengthening of the US dollar compared to its developed-market counterparts. Dollar strengthening actually started just after the global financial crisis as a slow methodical slog higher marked by both
We believe non-agency RMBS bonds will present a very attractive investment opportunity in 2023. Prepayment-sensitive assets (e.g., agency IOs) provide a particularly compelling diversification story due to the countercyclical nature of the sector, in our view. Our current base case
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 …
Assessing the impact of the Inflation Reduction Act and other recent legislation on the transition to a lower-carbon world. The transition to a lower-carbon economy is a driver of investment risk and return for our clients’ portfolios – so we
We believe the US dollar is expensive and starting to run on empty. Looking ahead to when the dollar weakens, we expect it to provide a ceteris paribus boost to commodities, emerging market assets and …
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
US commercial real estate performance is responding to higher interest rates and prospects for a weaker economy in 2023. The impact affects the demand for space as shown in absorption, vacancy rates, and rent growth along with the valuation of
We believe a moment has arrived when long-term and short-term opportunities in quality small cap equity are finally aligned, when one can invest in high-quality small …
With only days to go, the wild 2022 midterms continue apace. From Democrats funding “MAGA Republicans” in primary races, to former President Trump trying his hand as kingmaker, to sacrosanct Democrat seats and governorships at risk of being flipped (we’re
With inflation running at a 40-year high and the Fed taking aggressive measures, is now the time to allocate to US small cap stocks? Despite their generally lower margins, US small caps have three critical things on their side right
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
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
Our Currency, Our Problem. One of the most famous sentences ever uttered by a U.S. Treasury Secretary was John Connally’s November 1971 G-10 meeting quote that “The dollar is our currency, but your problem.” It’s a wonderful line, and the
Extracting a common thread from last week’s abundant information flows was impossible. Perhaps the critical item will be the weakness of the US economy revealed by detailed GDP data. Last week was rich in information. From UK and Chinese politics,
U.S. retail investors’ heightened market activity and engagement has been fascinating to watch over recent years. There has been a number of factors which have had a profound impact on the retail investor segment, including the pandemic, technological advancement in
After a 24% year-to-date decline in the S&P 500, we ask what could make us turn positive on equities. A 30% further decline would help but short of that, some combination of the start of recession, VIX above 40 and
Persistently high inflation rates and a significant increase in interest rates are weighing on economic momentum and pushing up volatility on the financial markets. In addition, geopolitical tensions are in place that favour safe-haven flows. We regard the medium and
Fixed Income Perspectives – September 2022 Inflation is likely to be the driving market force through mid-2023 at least. The August US Consumer Price Index (CPI) numbers, though somewhat higher than expected, don’t change our outlook for inflation or Fed policy,
Looking backward, US commercial real estate (CRE) produced very favorable returns over the first half of 2022 despite high inflation and a weakening US economic growth environment. With CRE investment performance historically lagging the macroeconomy, investors are pondering the possibility
US commercial real estate (CRE) investors are well-versed in the importance of economic growth to property investment performance. Focus on the Covid-19 recession, policies to truncate it and the path of recovery have dominated the attention of analysts for more
Most of the time (85% or thereabouts) markets behave quite normally. In these periods, investors (managers, clients, and individuals) are happy enough, but alas these periods do not truly matter. It is only the other 15% of the time that
Beleggingsnota 2023 De trefwoorden vorig jaar in de Beleggingsnota 2022 waren: COVID-19, productieverstoringen, en “peak growth”. De inflatie begon al te stijgen, maar was nog relatief beperkt (2,2% in de eurozone en 5,4% in de VS), en werd voornamelijk als
EMEA-Listed ETF Flash Flows – Weekly as of 19 August 2022 ETFs experienced strong inflows last week, adding $3.8bn. Equity led with net inflows of $3.3bn while Commodity lost …
Historically, emerging market (EM) local currency debt has tended to weaken with rising US interest rates, but our research shows that much of this has generally occurred before Federal Reserve (Fed) interest rate hikes have taken place. As the Fed
Weekly commentary – August 15, 2022 Stocks are rallying as markets believe inflation is waning and the Fed will slow hikes soon. We don’t think the rally is sustainable. Why? We see the Fed hiking rates to levels that will
Aandelen blijven kwetsbaar voor een golf naar beneden bijgestelde winstprognoses, vooral in de VS en Europa. Vertragende economische groei, stijgende inflatie, strakker monetair beleid en verhoogde geopolitieke risico's hebben allemaal hun tol geëist in de financiële …
