Wealth Management Blog | WrapManager | WrapManager's Investment Policy Committee (5)

JP Morgan Recaps Year-End Economic Data

Posted by WrapManager's Investment Policy Committee

December 28, 2017

JP Morgan's weekly update offers a snapshot of changes in the economy and potential implications for investors. This week's investment themes include:

• Earnings growth, coupled with slowly rising interest rates, makes stocks look attractive in relative terms.

• High-yield bonds look more attractive than Treasuries, but a diversified approach to fixed income investing seems appropriate given Fed tightening.

• International exposure is warranted given growth prospects abroad, and a weaker dollar can enhance foreign returns.

Nuveen Reviews 2017 Predictions and Looks Ahead to 2018

December 21, 2017

As the year draws to a close, it appears more of our predictions are correct than not... We have been describing 2017 as a “Year of Transition." We expected improving economic growth, accelerating corporate earnings and rising interest rates. We also predicted rising volatility amid equity market leadership changes. Depending on movements of a few basis points for the 10-year Treasury yield, we are likely to get either 7 or 7½ of our 10 predictions correct. Read an excerpt of Nuveen's 2017's predictions in review, or download the entire investment commentary as a PDF. [+] Read More

BlackRock Shares Its Outlook on Global Investing in 2018

December 14, 2017

We see stable global growth with room to run... Setting the scene: the eurozone is enjoying its fastest economic expansion since 2011. EM (Emerging Markets) growth looks self-sustaining, even if powerhouse China slows more than markets currently expect. The breadth of the global recovery has expanded: Manufacturing figures are up in about 80% of countries, a share that has steadily increased over the past year. And U.S. tax cuts could provide a decent dose of fiscal stimulus. The caveat? Consensus expectations have mostly caught up with our GPS for G7 economies over the past year. See the "More growth, less upside" chart on page 3. This suggests less investor drive to play catch-up and embrace the positive growth outlook. Overall, we see very steady growth, coupled with still subdued inflation and low interest rates, as positive for risk assets — but with returns more muted. We expect global economic growth to chug along in 2018, but see less room for upside surprises to lift markets. Read an excerpt of BlackRock's key views below, or view the entire Global Investing Outlook for 2018. [+] Read More

Lord Abbett Shares Year-End Retirement Checklist

December 7, 2017

Review your retirement plans to maximize potential savings for you and your family... Lord Abbett's 2017 Retirement Tips - Year End Checklist includes important information for anyone who turned age 50 or 70½ in 2017, and for investors taking required minimum distributions (RMDs). The article also addresses common retirement investing questions such as: - Can you make IRA contributions if you participate in an employer-sponsored retirement plan? - What can you do to optimize the tax implications of converting a traditional IRA to a Roth IRA in 2017? - Did you make a nondeductible (aftertax) IRA contribution? - If you are subject to RMDs, have you included the value of all your IRAs in the calculation? Continue reading to review some of Lord Abbett's year-end retirement tips, or download the complete checklist and review your retirement plan. [+] Read More

Presenting WrapManager's Q4 2017 Top International Equity Money Manager Picks Report

November 30, 2017

While the United States represents the largest single contributor to global GDP, 75% of the world’s GDP is taking place across our borders in other countries. That means that from an investing standpoint, an international equity strategy can help diversify your portfolio and take advantage of the many investment opportunities available outside of the U.S. Though we have seen that historically there have been market cycles where international equities outperform U.S. equities[1], there can be a tendency for many American investors to have a home bias that favors domestic investment and largely ignores non-U.S. opportunities. [+] Read More

Lord Abbett Explores Yield Curve Effect on US Stocks

November 23, 2017

In part one of a two-part Market View, Lord Abbett explored investor concerns about the ongoing flattening of the yield curve. A flat two-year–10-year U.S. Treasury yield curve suggests an expectation of falling short-term interest rates, or an extended period of very low short-term rates, corresponding to presumptions of a weak U.S. economy and disappointing corporate earnings. In turn, those developments would have negative implications for U.S. equity prices. To address those concerns, Lord Abbett turned to Giulio Martini, Lord Abbett Partner and Director of Strategic Asset Allocation for his views on the yield curve and its relationship to economic growth, corporate profits, and, ultimately, U.S. equity prices. Read on for an introduction to Martini's analysis, or view the entire document here. [+] Read More

Nuveen Looks Ahead to Future of the Bull Market, Tax Reform in 2018

November 16, 2017

The bull market in equities is aging but remains very much intact... For more than a year now, equity markets have enjoyed an unusual combination of low volatility and near-uninterrupted price gains due to a combination of accelerating economic growth, improving earnings, accommodative monetary policy and still-low inflation. Economic growth should continue to improve, but expectations have risen, which means positive surprises will be harder to come by. At the same time, central bank policy is slowly tightening, which could contribute to market volatility. Additionally, accelerating growth and tighter policy may finally trigger an uptick in inflation, especially in wage inflation given the low level of unemployment. Should this occur, we expect bond yields will climb, which could jolt other financial assets including equity markets. We don’t expect yields to rise unimpeded, but an ascending period of peaks and troughs looks likely. Read an excerpt of the complete commentary below, then download the entire investment commentary as a PDF. [+] Read More

BlackRock Asks: Where Is the US Dollar Headed?

November 9, 2017

We see a mildly stronger U.S. dollar (USD) ahead... A key U.S. dollar index has depreciated roughly 7% this year. Some are betting on further declines; speculative short positioning is at three-and-a-half year highs in the futures market. We believe this positioning buildup led to an April break in the usual positive correlation between the USD and the U.S. yield premium over other developed markets. Yet we see the USD’s broad uptrend since mid-2014 slowly resuming as monetary policy divergence re-emerges. The Fed is normalizing rates while the European Central Bank and Bank of Japan maintain easier policies, and the positive correlation between the USD and yield premium has returned. Read an excerpt of Richard Turnill's weekly commentary below, or view the entire BlackRock weekly investment commentary here. [+] Read More

Lord Abbett Reviews 2018 Retirement Plan Limits

November 2, 2017

The Internal Revenue Service (IRS) has released their retirement plan limits for 2018. Lord Abbett believes the information provided to be an accurate statement of current rules; however, prospective investors should consult with an investment professional and/or tax advisor. Read on for a summary of changes, or view the entire document here. [+] Read More

Nuveen Asks What Matters and What Doesn’t for Equities?

October 26, 2017

Investors remain calm as equity prices move higher against a backdrop of very low volatility... Investor attention remained focused on Washington, D.C. last week. The Senate passed a budget resolution, while President Trump is set to announce who he will select as the next head of the Federal Reserve. These factors, combined with ongoing solid economic data, allowed the so-called reflation trade to continue as higher-risk financial assets gained ground. U.S. equities notched their sixth consecutive week of gains... Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF. [+] Read More