Tactical Shift
We see the economy on a growth track, but after a year of strong returns and historically low volatility, some moderation to growth and risk appetite seems reasonable. Continued economic growth, without a notable pickup in inflation, remains our dominant view. Last year’s tax changes, and new federal spending initiatives, have the potential to lift investment and speed up growth. Risks to our outlook include rising trade and geopolitical tension, elevated asset prices in some areas, and rising interest rates. During the quarter, we made a few tactical adjustments to portfolios. We tilted portfolios toward large cap domestic value, and…
It is not very often that emerging market equities trade with valuations this low compared to the S&P 500. Typically, emerging markets trade with a lower multiple than developed given greater risks. Yet, there have been few times over the last twelve years when emerging markets were valued this low on a price-to-earnings ratio basis compared with the United States. Lower relative valuations reflect a variety of concerns including commodity prices, credit quality, currency, and growth. All of these are valid things to be concerned about and we’ve written about them before. Still, we have seen emerging markets underperform their developed market counterparts for…
Our macro outlook is for slow growth and stubbornly low inflation. The start of policy normalization following years of zero interest rate policy in the United States comes at a time of weakening global growth and mixed signals from the domestic economy. We continue to view the United States economy as best positioned to weather the overall weak global environment that resurfaced in 2015. In this report, we take a long-term view and address expectations for markets over the long run. Full Report Click Here
The WCA Fundamental Conditions Barometer remains weak reflecting slower global growth. Our updated forecast has the barometer tracking toward 43 for October and remaining in the 40-45 range for the fourth quarter of the year. The bright spot remains domestic final demand which continues to plow forward on steady improvement in employment and wages. The pickup we saw from the second quarter is not continuing into the third quarter and both the IMF and the Atlanta Fed’s GDP Now forecast are being trimmed. The IMF again revised its global growth rate down to an estimated 3.1% for 2015 and the…
Quarterly Report
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