Wealth Management Blog | WrapManager | Money Manager Commentary (4)

Nuveen Evaluates Rising Risks, Recommends Pro-Growth Bias

Posted by WrapManager's Investment Policy Committee

January 25, 2018

Nuveen Evaluates Rising Risks, Recommends Pro-Growth Bias

We are not yet seeing warning signs that would signal a correction...

Over the past 18 months, investor sentiment appears to have come full circle. In mid-2016, deflation fears reigned and investors seemed eager to embrace negative news. Since that time, however, optimism toward economic growth, earnings growth and stock market prospects have become the main investment themes. The most recent example of this trend is the incredibly positive reaction to last month’s tax bill, which has caused investors and analysts to forecast increasingly higher earnings results even as valuations are growing less attractive.

Such an environment causes us to take pause and examine the risks. Earnings expectations are quite high. While we think they can still be met, the higher expectations rise, the harder it will be for results to beat estimates.

Read a summary of insights from Nuveen Asset Management's Senior Portfolio Manager and Chief Equity Strategist Bob Doll below, or download the entire investment commentary as a PDF.

BlackRock Evaluates Tax Overhaul Winners and Losers

January 18, 2018

Investors need to look beneath the surface to identify the longer-term winners... The Tax Cuts and Jobs Act is poised to boost a U.S. economy already running at full capacity. A windfall from lower taxes and incentives for capital expenditure could spur more consumer and business spending and corporate deal-making. A likely convergence in tax rates could create winners and losers, rippling across sectors and companies. Read an excerpt of BlackRock's evaluation below, or download the complete commentary. [+] Read More

JP Morgan Guide to the Markets for 1Q 2018

January 11, 2018

JP Morgan Quarterly Guide to the Markets JP Morgan’s Guide to the Markets for the first quarter of 2018 is now available for your review. The comprehensive 71-page guide includes 65 pages of charts illustrating: Trends across equities, the economy, the fixed income sector and international investing Returns and valuations by style and by sector Fixed income yields and returns Annual returns and intra-year declines of the S&P 500 Investor allocation by region The power of compounding The retirement savings gap [+] Read More

JP Morgan Recaps Year-End Economic Data

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. [+] Read More

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

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