Japanese Equities: It’s Not Too Late to Capitalize on the Recovery
Heading into 2016, we remain constructive on Japanese equities versus US equivalents and are broadening our recommendation to include Japanese small- and mid-cap stocks.
Authored by: Wade O'Brien
What Should Investors Expect From Developed Markets Equities in 2016?
2015 looks likely to go down as a year to forget for many investors, and 2016 may bring only slight improvement.
Outlook 2016: Do You Know Where Your Risk Tolerance Is?
Every year, we take a fresh look at the themes and drivers likely to influence capital markets and, along with our valuation analysis, inform our asset allocation recommendations. Heading into 2015, we identified five trends that influenced our advice: US dollar strength, weakening commodity prices, elevated US equity valuations, extremely low sovereign bond yields, and…
Why Did the US Federal Reserve Leave Rates at Zero . . . Again?
In this edition of C|A Answers, two members of our Capital Markets Research team provide different viewpoints on the Fed’s recent decision not to raise rates.
UK Equities: Curbed Enthusiasm
UK large-cap stocks are undervalued, but lack a clear near-term catalyst to unlock this value; mid-cap valuations are moving higher, but so too are earnings.
Will Further Market Volatility Ensue If Greece Does Not Return to the Bargaining Table?
The situation with Greece has become increasingly unpredictable and could trigger further market volatility in the weeks ahead. However, even under an adverse scenario such as a Greek exit from the Eurozone, other European assets are likely to eventually resume their decoupling from Greek assets, given firewalls in place and a more favorable economic backdrop….
When Should Investors Become More Enthusiastic About US Small-Cap Stocks?
Investors should become more enthusiastic about US small-cap stocks when valuations become more compelling. Small-cap valuations today are unusually rich. Our preferred composite P/E ratio indicates the Russell 2000® trades at 33.7 times normalized earnings, about 60% above fair value and in the top 2% of all historical occurrences. Short-term metrics are little more compelling;…
European Equities: Too Early to Take Profits
We continue to advise an overweight to Eurozone equities versus US equivalents given attractive relative valuations, greater potential for earnings growth, and tailwinds from the improving macro environment Eurozone equities have performed strongly year-to-date but may have more room to run given valuations and weaker medium-term performance. UK equities have similar valuations but are less…
US High-Yield Bonds: Our Interest Remains Limited
We continue to find high-yield bonds uncompelling; select opportunities in high-yield energy credit may offer attractive alpha Solid credit fundamentals and 6%+ yields in a low-return environment have lured some investors back to high-yield bonds, but current coupons will serve to cap future returns and offer little protection in the (somewhat unlikely) event the credit…
Could Negotiations Between Greece and Its Eurozone Creditors Break Down and Cause More Volatility for Related Assets?
Talks between Greece and its Eurozone creditors to extend its bailout may again break down and thus trigger more volatility for local assets, but the potential for contagion to other asset markets is contained for several reasons. All involved parties have strong incentives to eventually reach an agreement. Even if they can’t, the fact that…