News > Financial Services

European Banks—Choosing the Right Layer of the Capital Structure
European Banks have mostly been magnets for bad news and disappointment for their equity holders. But we believe other parts of the banks’ capital structure offer solid returns, backed by resilient balance sheets. The Problem? Poor Profitability, Not Weak Balance Sheets European banks have been struggling to improve profitability in a persistently tough environment. Continuous low rates, a flat yield
Why Play Defense in Rising Emerging Markets?
Why should emerging-market investors exercise caution in a rising market? With big unresolved challenges, we think it’s prudent to target companies with solid fundamentals and stable business models to overcome macroeconomic uncertainty and build a resilient portfolio for the long-term. Emerging-market stocks have bounced back in 2019. After dropping more than 14% in 2018, the MSCI Emerging Markets Index was
Measuring Inflation, Celebrating Job Creation, and Watching Chinese Debt
SUMMARY Why Is Inflation So Low? The Incredible American Job Machine China’s Bad Loans Are Getting Worse According to Oscar Wilde, cynics are people who know the price of everything and the value of nothing. On a related note, I am beginning to suspect economists are people who know nothing about prices. Trends in the price level have confounded analysts
Global Growth Themes and Forecasts (Infographic)
© Loomis, Sayles & Co. This article was originally published in Advisor Perspectives. Photo: iStock
Stop Worrying about Your Portfolio
EXECUTIVE SUMMARY Investors have a tendency to focus on the characteristics of their portfolios almost to the exclusion of other factors that will lead to success or failure for the larger objective that the portfolio is intended to serve. By taking into account the characteristics of the assets and liabilities that exist outside of their investment portfolios, they could build
Explaining Inflation Inertia
Despite central bankers' concerted efforts, credible price-stability targets have proved elusive in countries like Argentina, where inflation is soaring, and Japan, which can't shake the specter of deflation. What can governments do to influence inflation expectations when central banks’ policies prove insufficient to the task? CAMBRIDGE – The stubbornness of inflation continues to challenge and mystify central bankers worldwide. Whether
Emerging Market Stocks Underperform When the US Dollar Strengthens…Here’s Why
The relationship between the performance of emerging market stocks and the US dollar is one of the tightest macro relationships that exists in investing. As we can see in the first chart, the relative performance of EM stocks vs the S&P 500 is highly negatively correlated with the level of the dollar. That is, when the dollar goes up, EMs
Leave the Renminbi Out of US-China Trade Talks
CAMBRIDGE – Will a possibly imminent US-China trade agreement exacerbate global business cycles or even plant the seeds of the next Asian financial crisis? If the eventual agreement – assuming there is one – forces China to hew indefinitely to its outmoded, overly rigid exchange-rate regime, then the answer may be yes. Keeping the renminbi’s exchange rate stable against the
What ‘Back to the Future’ Can Teach Us About Portfolio Rebalancing
The standard 60/40 portfolio featuring a basic mix of US and international equities plus aggregate bonds has returned a cumulative 754% since 1990. Or has it returned 781%? Or maybe 730%? All three numbers are correct for this standard strategic asset allocation mix. The differences, however, like the devil, are in the details: it depends on when the portfolio was
The Case of the Missing Inflation…and What the Fed’s Doing About It
US inflation has been running low for some time, and key members of the Federal Reserve Open Market Committee (FOMC) are pointing a finger at the traditional policy framework. So rate hikes are on hold for the time being—and monetary policy is under the microscope. Since the beginning of this year, bond markets have dramatically adjusted their expectations for US