What To Do About Higher Rates?
Investors worried about rising interest rates have several options; unfortunately, none comes without opportunity costs and implementation challenges.
Authored by: Wade O'Brien
European Equities: Not Expensive But Not Compelling
European equity valuations are not expensive, but political risks justify a discount and the lack of easy fixes to Europe’s sovereign debt crisis may make volatility a recurring feature of the market.
Can U.S. Corporate Profit Margins Continue to Defy Gravity?
Equity investors are right to be focused on corporate earnings, given that a lackluster recovery and slowing global growth may weigh on sales. However, profit margins may be of lesser concern, due to index mechanics and the limited correlation between margins and returns. S&P 500 companies have enjoyed a stunning rebound in profits since the…
European Update: Kicking an Ever Bigger Can
While recent efforts by European authorities to expand rescue packages for peripheral countries are a step in the right direction, market volatility is likely to remain elevated until more comprehensive solutions are put on the table.
More Than a Passing Fad – EM Bond Funds Deserve Strategic Consideration
Allocations to emerging markets bond funds make sense from a strategic perspective, but the opportunity set offered by this evolving market is not static.
European Equities – Cautiously More Optimistic
European equity valuations are reasonable from a historical perspective—pessimism about sovereign finances and a slow recovery may be fully priced in.
European Equities: Average Valuations in Abnormal Times
While European equity valuations are reasonable from a historical perspective, market pricing doesn’t provide much cover for risks stemming from sovereign finances and the halting economic recovery.
Still or Sparkling? Many Bond Valuations Are High, But Proof of a Bubble Is Somewhat Elusive
While there are some good reasons that demand for fixed income assets has increased, the subsequent price appreciation has made compelling investments harder to find. However, while we view sovereign bonds from many developed countries as very overvalued, our outlook on credit is more nuanced.
Geographic Revenue Mix: Helping to Explain Earnings Growth Despite Dormant Domestic Economies
The importance of geographic revenue mix has increased in recent years as growth prospects for emerging and developed markets have diverged. For European and U.S. companies positioned to capitalize on this growth, it may provide a silver lining despite slowing domestic demand.
An Update on Europe – Not Quite Time to Sound the All Clear
Authorities have taken decisive steps recently to quell concerns about sovereign debts. However, the underlying problems will take a long time to work through and thus volatility is likely to be a recurring theme in European markets for some time.