All North America articles – Page 8
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White papersThe role of bonds in a low-yield world.
Negative correlation between stocks and U.S. Treasuries in recent decades has enhanced their diversification value. Bond returns have supercharged by the boost to duration from steadily declining interest rates. Corporate bonds - more correlated with equities and economic trends - have less diversification value than Treasuries. ...
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Investment Perspectives - Factoring it all in - Q2 2019
Each quarter, “Factoring it All In” offers insights into how factors perform across broad equity markets. In each piece, we analyse the most recent quarter through a factor lens, focusing on five key style factors along with market performance. With Q2 2019 in focus, this edition will ...
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The Fed’s About-Face Complete Amid Dissent
As Federal Reserve officials have been signaling in recent weeks, the Fed cut its target Fed funds rate by 25 bps to a target range of 2.0%-2.25% at the policy meeting that ended on July 31, marking its first interest rate cut since 2008.
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Slow global growth compels the Fed to cut interest rates
The Federal Reserve has reduced its policy rate target for the first time since 2008. Economic data in the U.S. have been solid, but global growth is slow and a variety of policy risks hang over the outlook like dark clouds.
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Back to basics: a contrarian look at cyclicals in credit markets
The US bull run is the country’s longest on record. But we are in the latter stage of the global macroeconomic cycle and warning lights are flashing. We remain focused on corporate fundamentals, asking which high-quality cyclicals could successfully weather a slowdown.
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Fixed Income: Upending the Conventional Approach
The search for yield trudges on amid trade and tariff clashes, and a credit cycle that continues to surprise in its longevity. In this Q&A, Michael Freno, Head of Global Markets, shares his views on where value can still be found and how investors can benefit from looking beyond traditional indexes in high yield, investment grade credit and emerging markets debt.
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Positioning portfolios for U.S. dollar weakness
Long-term dollar depreciation may occur due to fundamental and technical reasons. Given this outlook for the dollar, non-U.S. assets may offer U.S. investors attractive opportunities for potential upside return. The U.S. Federal Reserve (Fed) returning to a more dovish stance lends additional support to our view. ...
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Blog | Three risks to the “Powell Put” feel-good moment
Risk appetite has been swinging from concern about slowing global growth and profits to optimism that aggressive Fed easing was just around the corner. Optimism appears to have won the day, at least for now. Hints last week of the Fed’s readiness to cut rates sparked a global equity rally, with US stocks notching new highs.
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Russell US Indexes – 40 years of insights
The Russell US Indexes were created in 1984 by the Frank Russell Company (now part of FTSE Russell) with the goal of providing accurate representation of the investable US equity market. When initially introduced, the Russell indexes provided five years of simulated back-history so that a historical record would exist, enabling investors to use the indexes at launch without requiring a live track record to be accumulated.
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Real Estate Summary US Real Estate - Edition 2, 2019: Demand remains strong and spreads reversed somewhat in early 2019
US real estate investors are entering year four of a period of relative calm, income-driven performance. Demand is strong. Supply should be monitored closely. Capital flows are supportive but not excessive, even as spreads show signs of easing.
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Blog | US equity markets hit all-time high as Russell Recon nears
In its recent announcement on projected changes for the Russell US Indexes at this year’s Russell Reconstitution, FTSE Russell highlighted that total US equity market capitalization reached approximately $31.7 trillion at this year’s Russell Reconstitution May 10 rank day, up 3% from $30.7 trillion total market cap last year.
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The Great “Hollowing Out” of the U.S. Job Market
PGIM Fixed Income examines the quality of jobs created since the global financial crisis. The research examines the drivers of income inequality in the U.S. and how policymakers and participants can react and adapt to the new economy.
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Blog | What have you done with my small cap premium?
Academic research has demonstrated the existence of what is known as the “size” or “small-cap” premium beginning over 30 years ago. Today many investors take it as given that small stocks will outperform large stocks based on this foundational principle of finance. It is a rational expectation, since small stocks are demonstrably more risky than larger stocks, so they should provide investors with additional compensation for bearing this risk in the form of extra return.
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Fed to raise its inflation game?
The Federal Reserve is reviewing its monetary policy strategy amid concerns that the current policy toolkit won’t be powerful enough to counter a future economic downturn. The Fed is considering options to steer inflation expectations that could have important economic and market implications.
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Blog | Is it a good time to be in the stock market?
As we enter this year’s annual Russell rebalancing process (also known as the Russell Reconstitution), investors may be interested to know that it has been 35 years since the Russell indexes were created, and the original guiding principles behind the rebalancing process and other features of the Russell indexes have stayed constant over the years.
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High Yield: Oasis In Search For Yield?
Since early 2016, US HY default rates have experienced a sort of “mini –cycle”, peaking at the end of 2016. Nevertheless, the recent rise and fall movements appear mostly commodity driven: default rates would have remained fairly stable if energy and material sectors were excluded from calculations.
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Redefining Value: A Modern Definition
Performance leadership in the decade long U.S. equity market cycle is and continues to be growth stocks. Value has significantly underperformed for several years. Principal proprietary factor timing models signalled an opportunity for value exposures in December and we believe it is time to discuss portfolio implementation to take advantage of the potential value opportunity.
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Is There Style Drift in Middle Market Lending?
Barings’ Ian Fowler weighs in on the supply/demand dynamics in the direct lending space and explains why looking at the middle market as one cohesive universe can be misleading.
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Fallen Angels in the US credit market
A Fallen Angel is a corporate, or sovereign, bond downgraded from Investment Grade (IG) (minimum rating of BBB- with S&P, Moody’s or Fitch) to a High Yield credit rating (of BB , or below with S&P, Moody’s or Fitch). Thus, the downgrade from Investment Grade (IG) to High Yield (HY) is far more significant than a downgrade for a bond staying within the same asset class. Fallen Angels tend to have higher credit-beta than other HY issues as a result.
