Brian Bollen's Blog

What Lies Ahead, Four: Schroders

David Harris, head of US multi-sector fixed income at Schroders, discusses his expectations for the US fixed income market in the next year

The Federal Reserve (Fed) will do all it can to keep short-term yields near zero.

But long-term yields will have to rise to attract buyers of treasuries.

Investors should therefore keep duration low, be ready to add inflation protection and be prepared to be both selective and tactical.

What’s in store for 2014?

What Lies Ahead, Three: Schroders

Joanna Shatney, head of US large cap equities at Schroders, gives her views on where she sees US equities in 2014

Shares have rebounded off low levels but do not look overvalued.

US companies are well positioned to deliver earnings growth next year.

The equity market offers secular growth, with large cap returns of up to 15% possible in 2014, and potentially less volatility than other markets.

Good News Becomes Good News

By Dr Jerry Webman, PhD, CFA, chief economist, OppenheimerFunds

After drifting lower for much of the week despite a string of encouraging data, stocks spiked higher last Friday after the second favourable monthly jobs report in a row. With bullish sentiment already elevated, equities (as measured by the S&P 500 Index) had struggled to continue the eight-week, roughly 7% advance that started in early October.1

My two favourite colours of the rainbow are gold and leprechaun...

Mint – Blain’s Morning Porridge  - December 10 2013

Happy Xmas thought for today:

My two favourite colours of the rainbow are gold and leprechaun...

After last week’s stronger than expected US Jobs number we saw central banks pile into US treasuries. We’ve even seen the long anticipated 10-5s flattener start to perform – we think that’s the trade to play – even though a significant part of the market think’s next week’s FOMC could see a modest taper.

How many people will still be playing? A significant number of funds have already shut up shop for this year, and I suspect few will be properly active from next week. 2013 wends its way to a weary close….

What’s the real outlook for the coming year?

What Lies Ahead Part Two: Schroders

Bob Jolly, head of global macro at Schroders, gives his outlook for global fixed income markets

The eurozone still faces myriad problems, of which the threat of deflation is probably the most worrying.

On balance, developed market central banks would rather be too late in tightening monetary policy than too early.

Bond investors will need to remain nimble in 2014 – this is not a market in which your long-term strategic views are going to make you money every month.

What Lies Ahead Part One: Schroders

Simon Webber, lead portfolio manager, global and international equities  at Schroders, gives his views on expectations for global equities markets

As corporate confidence gradually improves, capital spending should recover, benefitting capital goods and investment-related sectors.

Low rates and the search for yield have left companies with high expected future dividend and earnings growth looking extremely cheap relative to high yield equities.

Confused News On Payrolls

The latest Coutts Global Markets Weekly, by Alan Higgins, Chief Investment Officer, UK at Coutts starts with a consideration of the confused news on payrolls coming out of the US and ends with thoughts on the benign neglect scenario facing the euro.

Torrid Taper Temerity

Mint – Blain’s Morning Porridge  - December 9 2013

Torrid Taper Temerity Triggers Tantrums, Terrifying Tepidly Tremulous Traders...

What’s the likely story for this week now the US jobs number is out the way..? Nothing really changes - now it’s another wait till next week’s FOMC and to listen for further clues on taper timing. Despite the strength of Friday's jobs report.... markets still in "who-knows mood". On its own it was just another number that might made us slightly more bullish on stocks (so stocks up) and more bearish on bonds (not much yield reaction).. but of course it’s never that simple....

New Renminbi Record

Continuing the recent run of stories about the internationalisation of the Chinese currency is the news from data collater and provider Dealogic that November 2013 saw Global Offshore RMB debt capital markets activity reach a record monthly volume

Hector Fung of Dealogic summarises the salient points.

M&E M&A To Increase: EY

The media and entertainment industry is heading into 2014 with a high level of confidence in the global economy, according to the ninth Capital Confidence Barometer – Media & Entertainment industry results released by EY.

If one accepts the findings of the survey, media and entertainment companies are optimistic about the global economy in the year ahead expecting to see growth and an improving M&A deal environment and anticipate either maintaining or growing their current workforce.  

AIMA Announces Key Appointments

AIMA, the global hedge fund association, has announced a new chair and deputy chair of its Investor Steering Committee (ISC), which features leading institutional investors in hedge funds from around the world and undertakes educational initiatives. 

Equities Should Continue To Outperform: Pictet

Luca Paolini, chief strategist at Pictet Asset Management, explains why equities should continue to outperform

“An improvement in global economic conditions should eclipse concerns over the looming withdrawal of US monetary stimulus, and lend support to equity markets heading into year-end, traditionally a favourable period for stocks. We therefore maintain our overweight stance on stocks and stick to our underweight position on bonds.

Work Till You Drop

Here it comes...the official linking of UK pension age to longevity estimates...work till you drop, Boxer!

Osobrne Raiding Contingency Funds

Oh Dear. I've heard Chancellor George Osborne announce that he is raiding not just one contingency fund to shore up reported finances, but two contingency funds. That's the institutional equivalent of counting change lost down the back of sofa as part of current income.

Oh dear. Things are worse than I thought...

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UK Green Shoots Safe: Coutts

Apax Names Sillitoe/Truwit New Joint CEOs

Apax Partners, a global private equity firm, reports the election of Andrew Sillitoe and Mitch Truwit as the Firm’s new co-chief executive officers. They will assume their roles on January 1, 2014, succeeding Martin Halusa, who has served as Apax’s CEO since 2004 and who will become chairman, until his retirement at the end of the Apax VIII investment period. 


The Ukulele – a lifestyle choice to be embraced...

Bill Blain’s Morning Porridge  - December 4 2013

It’s going to be an interesting day. Will yesterday’s market wobble prove a one-off, or will the nervousness continue? What are the prospects of further weakness across the stock markets and further bond sell-downs? Some of the newsflow is not helping. For the moment we are stuck in a range. Friday’s US jobs number is the difficult one – it’s just a snapshot, but the indistinct shadow threats swirling around in terms of future rates and taper timing are going to be roiling sentiment for a long time yet.

BofE’s Growth Focus Might Stir Inflation Ghost

By Darren Williams, senior European economist at AllianceBernstein

The Bank of England appears to have moved the goalposts. After 30 years of focussing almost exclusively on inflation, monetary policy is now being more explicitly directed toward generating faster growth and lower unemployment.

Earlier this year, the need to stimulate the British economy was articulated by Chancellor George Osborne,  when he told the Bank of England to be more flexible with its inflation target and to think carefully about the trade-off between combating inflation and the impact on the real economy. The Chancellor made it very clear that the Bank would be held accountable for this judgement.

ECB To Leave Policy Tools On Hold

Comment from Andrew Bosomworth, PIMCO's managing director and head of portfolio management, ahead of the ECB meeting on Thursday

Our baseline for Thursday’s ECB meeting is that the Governing Council will leave all policy tools on hold. As well as all rates on hold, we expect President Draghi to also keep risks to the growth and inflation forecasts unchanged, with downside risks to growth and balanced risks to inflation.

Could Stronger German Growth Help Lighten Periphery Burden?

By Darren Williams, senior European economist, and Dennis Shen, economic associate, global economic research, AllianceBernstein

While many euro-area countries continue to battle slowly out of recession, the outlook for Germany is rapidly improving. This has been evident in a number of indicators, including last week’s release of third-quarter national-accounts data. At first glance, the data were disappointing: gross domestic product (GDP) rose by just 0.3%, less than half the 0.7% gain in the second quarter.

Investors Still Gobbling Up Shares

By Dr Jerry Webman, PhD, CFA, chief economist, OppenheimerFunds

The great rally of 2013 continued last week, with the S&P 500 Index notching its third consecutive month of gains. Trading was relatively light, with US markets shuttered on Thanksgiving and closed early on Friday. If nothing else, the early close gave investors (and everyone else) the opportunity to attend to that unique American tradition: Seeking out Black Friday deals.