U.S. Financials: Catch a Falling Knife?
Despite low valuations, U.S. financial stocks will likely remain a “value trap” until greater clarity emerges as to the ultimate magnitude of losses facing the financial system.
Authored by: Aaron Costello
Quality – A Closer Look
A closer look at “quality” equities across developed markets reaffirms our view that high-quality equities remain attractive and portfolios should remain tilted toward mega-cap growth.
The Eye of the Storm
While markets may rally over the coming months, the hurricane of deleveraging is far from over, with a second wave of turmoil likely as a weakening U.S. economy weighs on growth in the rest of the world, a scenario still not fully priced into equity markets.
As the Cycles Turn
A look at what history tells us to expect as the earnings, business, and stock market cycles converge.
Outlook 2008: A Year of Living Dangerously
2008 may prove to be a particularly dangerous year, as slowing U.S. and global growth force a turning of the profit and credit-default cycle, the consequences of which equity markets are not well prepared for.
EM: What to do, What to do…
While the long-term case for emerging markets equities remains intact, now is not the time to overweight emerging markets equities as soaring valuations and a blind faith in “decoupling” leave them quite vulnerable in the near term.
Does the “Buck” Stop Here?
While the U.S. dollar may be poised for a short-term rebound, the long-term direction for the U.S. dollar is down, as emerging markets untether themselves from the greenback.
The Jig Is Up: The End of Easy Credit
Whether the current turmoil in the credit markets intensifies or slowly blows over, the days of easy credit financing are over.
European Linkers: Getting Interesting?
While rising real yields have restored some value to European inflation-linked bond markets, linkers are not yet attractive on their own, although do offer some value relative to nominal government paper.
Some Thoughts on “Perma-Bear” Adjusted Ratios
Our thoughts on the recent debate in the financial press over the relevance of cyclically adjusted P/E ratios.