Wealth Management Blog | WrapManager | Money Manager Commentary (6)

Nuveen Evaluates Economic Growth, Recession Risk

Posted by WrapManager's Investment Policy Committee

August 10, 2017

Nuveen Evaluates Economic Growth, Recession Risk

Risks Appear Tilted to the Upside for Stocks

Although economic data was positive and earnings continued to be strong, U.S. equities were mixed last week. Markets appear to be in a holding pattern, with investors waiting for more news on Federal Reserve balance sheet normalization and tax policy.

For several months, volatility has remained low while equity prices have grinded unevenly higher. This has prompted many investors to look for signposts that could cause a change in direction. Possible dangers could include the end of emergency zero-interest-rate policies, high global debt levels, slow productivity growth or political instability caused by such issues as widening income inequality or rising protectionism.

Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF.

BlackRock Digs Into the Metals and Mining Rally

August 3, 2017

We see stability in commodities prices but are selective in related stocks and bonds. Industrial metals have generally outperformed their commodity peers this year, with copper prices hitting a two-year high last week. A big reason for the rally: production has been falling from last year’s levels. This is a result of firms cutting capital expenditures after multi-year price slides. Read an excerpt of Richard Turnill's weekly commentary below, or view the entire weekly investment commentary here. [+] Read More

Geneva Reviews Fixed Income and Dividend Investing

July 27, 2017

"Dividend‐ growth stocks remain more attractive than most high‐dividend‐yield stocks..." Investor and consumer confidence remained optimistic in the second quarter as capital markets continued an upward advance and volatility remained dampened. The global economy continued to gain momentum as all the world’s largest economies showed signs of growth while the U.S. consumer remained in good shape. Despite an encouraging backdrop there are some areas that continue to struggle such as traditional retail and energy, which we will continue to monitor as we construct our portfolios. [+] Read More

Main Management Reviews Market Performance in 2Q 2017

July 20, 2017

"Some Highs Despite Low and Slow Economy..." The second quarter of 2017 saw markets make new highs despite lackluster economic data. The Trump administration has seen strong market performance but has been unable to get two of its main goals coming into the inauguration – healthcare and tax reform – off the ground. This lack of action caused some hesitation in the markets, and when coupled with uninspiring economic data, has resulted in a more uncertain outlook heading into the second half of the year. [+] Read More

Federated Investors Hopeful About Stocks’ Summer Doldrums

July 13, 2017

While extremely low headline volatility of late may be putting some investors to sleep, beneath the surface, there has been a healthy and ongoing rotation among market sectors that should continue into the fall, pulling the S&P 500 ever higher toward our near-term 2,500 and long-term 3,000 targets. The reasons are three-fold: the economic backdrop is still solid; credit and liquidity conditions remain good; and politics and the Fed appear set to work together and revive the “Trump trade” in coming months. So stay long stocks. Add to industrials, financials and health care. And don’t abandon tech yet—there’s more to come in the next 12 months. Continue reading for additional insights: [+] Read More

BlackRock Examines Momentum Trading in 2017

June 29, 2017

We like momentum in today’s economic environment, even if its performance could be prone to short-lived reversals. The momentum style factor — stocks that are trending higher in price — has been on a tear in 2017. Sustained above-trend economic growth and solid earnings prospects could help extend the gains, but it may be a bumpy ride. Momentum has historically outrun the broader market, but with periodic sharp drops. The biggest dips in its relative performance have coincided with recessions and financial crises. Our research shows momentum tends to perform best during steady economic expansions — and we see this cycle having ample room to run. Read the three key points of BlackRock's weekly commentary below, or view the entire three-page weekly investment commentary now. [+] Read More

Nuveen Decodes Mixed Economic Signals

June 22, 2017

Economic Data and Confidence Levels Offer Mixed Signals In recent months, we have seen increased softness in so-called “hard” economic data, including retail sales, automotive production and employment. At the same time, “soft” data such as business confidence measures point to an expectation of economic acceleration. In our experience, these disconnects typically result in a move in the soft data, suggesting confidence measures could be due for a setback. Should this happen, it could provide a headwind for equity prices. Key Points: Economic data has trailed off in recent weeks, but we see reasons to expect a renewed acceleration. In the near-term, confidence levels could diminish, providing a headwind for stocks. Nevertheless, we believe it makes sense to maintain a pro-growth investment stance. Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF . [+] Read More

JP Morgan Evaluates Implications of an Interest Rate Hike

June 15, 2017

After a brutal recession and a painfully slow recovery, the U.S. economy no longer needs emergency measures of support from the U.S. Federal Reserve. Policymakers began the process of normalizing monetary policy at the end of 2015, and although the Fed is raising rates because the economy is healthier, the prospect of higher interest rates has created consternation and angst among some investors. While the Fed’s own projections are for a slow and gradual rate hike cycle, futures pricing suggests that the market thinks interetst rate hikes may be a bit slower. Although the gap between the Fed’s projections and the market’s view has narrowed, there is still room for surprises and volatility. The key thing to watch will be how market expectations adjust to the Fed’s new forecasts, as a Fed that hikes more quickly than the market expects could lead to upward pressure on the U.S. dollar and a de facto tightening for the U.S. economy. Read the entire commentary here. [+] Read More

BlackRock Evaluates Emerging Markets and European Equities

June 8, 2017

When contrarian becomes consensus... Many investors have flocked to emerging market (EM) and European equities this year, as money has broadly flowed back into risk assets. Our analysis suggests these equity trades are becoming consensus, and EM and European stocks are no longer the contrarian trades that they were for much of 2016. Read the three key points of BlackRock's weekly commentary below, or view the entire four-page weekly investment commentary now. [+] Read More

Nuveen Evaluates Investor Skepticism

June 1, 2017

Global Equity Prices Should Trend Unevenly Higher Many investors remain uneasy about the global macro backdrop, despite accelerating global economic growth, low inflation, accommodative global monetary policy and solid corporate earnings. Concerns about possible recession and deflation remain, and many investors are continuing a flight to quality, which is causing global bond yields to remain at exceptionally low levels. At the same time, disappointing U.S. economic data and mounting concerns over political instability in Washington, D.C. have held back equity prices and the value of the U.S. dollar. Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF. [+] Read More