Oil—The Swing Factor
After a rocky start to the year for oil, prices have been rallying. In this Weekly Letter, our CIO team reviews the supply and demand dynamics of the oil market and explains why now could be a good time for investors to consider their exposure to the energy sector.
The U.S. election: Can two negatives make a positive?
This year's race for the White House is notable both for the unpopularity of the candidates and the divisiveness of the campaign—and greater unity following the elections is far from certain. In this Weekly Letter, our CIO team explores four critical policy issues the next administration and Congress will need to confront, and offers specific steps investors can take now to prepare for what will likely be a volatile few months ahead for financial markets.
Mid Year Review
In this Weekly Letter, our CIO team explores the major events that moved the markets in the first half of 2016—culminating in U.K's surprise Brexit vote on June 23. They also explain why today's market can be thought of as neither a bear nor a typical bull, but rather a buffalo, and how its movements are shaping the outlook for investment opportunities. They then close with guidance on interest rates, equities versus bonds and the importance of rebalancing portfolios in today's uncertain market.
For What It's Worth: Something's Happening Here…
In this midyear 2016 edition of The Monthly Letter, our CIO team explores the risks and opportunities investors need to consider in the second half of the year, and shares their outlook for equities, fixed income and other asset classes. They also survey the broader macroeconomic landscape and explain why the U.S. will be the engine that keeps the global economy growing.
Investment Insights: The Brexit Vote and Its Implications
In this special Q&A, our CIO team answers the most important questions on investors' minds and explores the implications of the UK's exit from the European Union for the markets, economic growth and the future of European unity.
CIO Weekly Letter: Infrastructure Impulse
After years of underinvestment, spending on America's aging infrastructure is getting a major boost, thanks to Congress' passage of a fiscal stimulus bill back in December. And while a lot more funds will be needed over the coming years, private industry and investors could play a significant role in making up the shortfall, as our CIO team explains in this weekly letter.
CIO Monthly Letter: Investing in a Range-Bound Market
With U.S. equities facing a number of headwinds from now through the end of the year, a natural question many are asking is, where to invest from here? Our CIO team believes there are opportunities in today's market, especially for investors who are selective and explore industries and sectors that offer the best potential for growth. They also explain why the three key criteria of value, yield and growth can provide a solid framework for investors in today's range-bound market.
CIO Monthly Letter: Where's the Beef? Finding Value in Fixed Income
Changing market conditions make this an opportune time for investors to review their bond holdings, particularly in the area of high yield. In this monthly letter, our CIO team discusses where they see the best value in fixed income today. There's also an interview with Dennis Stattman, head of the Global Allocation team within BlackRock's Multi-Asset Strategies Group, on his outlook for the markets, interest rates and the challenges of planning for retirement.
Investment Insights: Monetary Policy Is Not Enough
Our CIO team explains how a renewed focus on fiscal policy—at the Federal, state and local levels—could be the key to stimulating U.S. economic growth going forward.
Forget Jack, Focus on Charlie-in-the-Box
Shifts in the global economy are often discounted if they don't fit with the prevailing idea of "normal." Our CIO team looks at several of the unexpected—and underestimated—ways that markets are changing, and the investment opportunities this creates.
CIO Monthly Letter: Asset Allocation in a Flatter World
There's no doubt the recent market volatility has been unsettling for investors. In this monthly letter, our CIO team offers specific steps investors can take in an environment of higher volatility and lower returns, and lists strategies that may help investors stay on track toward their long-term goals. There's also an interview with Howard Marks, Co-chairman and Founder of Oaktree Capital Management, on his outlook for equities, fixed income and the U.S. economy.
Investment Insights: A Market Under Stress — We Believe This, Too, Shall Pass
What's behind the correction in the markets? Our CIO team looks at the current investing environment, explains why a U.S. recession is unlikely and offers some portfolio strategies to consider.
CIO Weekly Letter: Watching the Four C's
Our CIO team takes a close look at what they call the "Four Cs": China, commodities, credit and consumers. These are the key risks which have been continuing to pressure stocks since the beginning of the year. But positive surprises in one or more of them could also set the stage for the return of market stability and investor confidence.
How will refugees affect the European economy?
The continuing flow of displaced persons into Europe has set off numerous debates – political, social, and economic. Here, Gilles Moëc, head of Developed Europe Economics at BofA Merrill Lynch Global Research, looks at some of the potential impacts.
Though the long-term financial implications of Europe's current refugee influx remain unclear, government spending on rescue operations, border protection, administration and registration facilities, food, shelter, language courses and other services should stimulate short-term economic growth. That's especially true in "target countries" such as Sweden and Germany, the destination for many refugees.
While it's important to distinguish between political refugees and Europe's job-seeking immigrants, refugees (most of whom are of working age) could lift the EU labor force by 0.3%, at least temporarily providing some relief to otherwise poor European demographics. Academic literature finds that immigration generally tends to enhance the welfare of the host country, in part by pushing the native workforce into higher qualified labor. Meanwhile, instances of immigrants "crowding out" the domestic workforce are more rare.
Still, some benefits may take a long time to unfold, and significant challenges remain. In many European economies, refugees have limited access to the labor market, in some cases for several years after arriving. Language barriers and uncertainty over job qualifications could also challenge their integration into the labor market.
Dealing With the Market's Latest Roller Coaster Ride
It's hard not to ask: "Should I sell or stay put?" every time the Dow takes a nosedive. According to Michael Liersch, Merrill Lynch's head of behavioral finance, your decisions should always be made in a thoughtful way, with your long-term goals in mind. In this interview, he offers some advice to help you deal with the ups and downs as the markets continue to respond to global change through year-end.
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