Insight & Commentaries
Our posture has been a bit more cautious since our Fundamental barometer began to head south a few weeks ago. However, we are ever watchful for signs of improvement in the landscape. The past few trading sessions has shown at least a temporary willingness for global investors to let their hair down, throw caution to the wind, and go long equities. Our assessment is a bit more sober, but we are paying attention to what the data is telling us.
We reflect on an updated World Bank outlook for improving growth and refine our measurements for foreign conditions. We believe that Europe will ultimately seek to maintain the status quo and proceed toward further integration over fragmentation. Politics and policy response remain wild cards as Greece heads to the polls this weekend, the Federal Reserve meets June 19-20, and the European Central Bank meets on July 6.
A stop-start growth pattern since 2009 makes this recovery feel vastly different than past recoveries. Large deficits and larger debts are major factors behind the uneven pace of recovery. Rather than accelerating smoothly into the economic fast lane, the journey away from the financial crisis seems more like being stuck in traffic. Forward progress continues, but progress is frustratingly slow.
This report discusses current recommended allocations in light of evolving fundamental conditions. The report also includes an update on the WCA Fundamental Conditions Index along with a longer-term view of the index. Recommended portfolio allocations for different investor types are also detailed.
Friday’s April employment report was a dud in the eyes of Wall Street, but a closer look reveals positives. The number of jobs created was less than expected (115,000 jobs added versus expectations of 160,000), but the direction, source, and composition of the changes tell a different story.
This report discusses current recommended allocations in light of evolving fundamental conditions. The report also includes an update on the WCA Fundamental Conditions Index along with a longer-term view of the index. Recommended portfolio allocations for different investor types are also detailed.
Until very recently, the thought of a Greek departure from the European Monetary Union (EMU) was seen as remote. Recently, markets have raised concerns about a potential Greek exit from the Euro. Although a Greek exit from the European Monetary Union is far from certain, such an outcome would require a robust and swift policy response. Meanwhile economic and U.S. bank fundamentals remain steady.
The economy is not fixed, but most of the data we monitor is showing improvement. Topics in this issue: WCA Fundamental Barometer rises again; stock valuations appear attractive; borrowing trends set to turn corner; balance sheets getting stronger.
This report discusses current recommended allocations in light of evolving fundamental conditions. We lay out expectations for the economy and various themes that we think will exist over our forecast horizon. The report also includes an update on the WCA Fundamental Conditions Index along with recommended portfolio allocations for different investor types.
Months of slippage in fundamental data have left investors concerned about the outlook. Although Europe’s troubles grabbed the headlines, the process of household balance sheet repair continued in 2011 and remains the single most important thematic as we head into the new year.
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