S&P 500 Earnings: Gazing Across the Abyss
The collapse in S&P earnings over the past year and the range of future possible earnings estimates create high uncertainty around U.S. equity valuations.
Authored by: Aaron Costello
The Trouble With Treasuries
With U.S. Treasury yields at their lowest levels in over 50 years, the effectiveness of Treasuries as a “deflation hedge” has been greatly diminished. While the current environment still demands that investors maintain deflation protection, investors should take advantage of the recent rally in Treasuries to rebalance allocations back to target and actively seek to…
Hard Choices for Hard Times
The macroeconomic outlook remains extremely challenging as the long overdue global rebalancing begins; investors need to make sure they are prepared for what may be a prolonged period of volatility and the possibility of new lows in asset markets.
Asia ex Japan 2009: The Moment of Truth
The year 2009 will reveal whether Asia’s growth over the past few years reflected real structural changes rather than debt-fueled U.S. consumption.
Japan 2009 – Darkest Before the Dawn
While the macroeconomic outlook for Japan is not encouraging, Japanese equities have gone the furthest in pricing in a dismal 2009. Given the market’s depressed valuations, it may not take much to spark a rally, especially if the global economy begins to stabilize.
Inflation-Linked Bonds in a Deflationary Environment
Despite mounting concerns over deflation, inflation-linked bonds offer low-cost insurance against a deflationary future, and look increasingly attractive relative to nominal government bonds at today’s historically low yields.
U.S. Equity Style Performance – It’s All Relative
Market leadership shifted abruptly toward high-quality mega-cap stocks over October and November, yet despite the sharp recent improvement in relative valuations of small caps and value stocks, we still think it is too early to switch from a defensive high-quality portfolio in the current environment.
What Does History Tell Us? Putting the Current Market into Context
While the current sell-off is in line with previous major bear markets of the postwar period, it is extreme in its speed and volatility. Precedent would suggest that markets will remain under pressure for the immediate future, but unless you assume we are on the verge of a 1930s’ style bust, equities are poised for…
Emerging Markets – Buy the Dip or Fade the Rally?
The near-term outlook for emerging markets equities is not very compelling; should shares continue to fall sharply, investors will need to reassess their desired tactical allocation.
European Equities: Lower Prices, But How Much Value?
Despite moving into the fair value range, European equities are not attractive at this time.