Tag Archives: Investing: Features

For several years, the United States has been the bright spot in the world economy, with the strongest growth recovery among developed nations, sustained labor market improvement, and climbing stock markets. But that’s the past. What about the future? From the perspective of senior European executives, the outlook for the U.S. market has become increasingly worrisome of late. In the most recent installment of a twice-yearly survey, a panel of those executives told Credit Suisse that their...

Disruption is as old as commerce, but the pace is accelerating of late. The rise of the sharing economy threatens incumbents in retailing, banking, and car insurance, while new financial and environmental regulations are increasing costs for banks, utilities, and autos. Chinese businesses, their home country’s economic troubles notwithstanding, pose an increasing competitive threat in the global steel, aluminum, railway equipment, power generation, and bulk chemicals industries.  ...

Even in the fast-changing world of foreign exchange, investors have been able to count on one thing for the last two years – that the interest rate policies of central banks would be the primary driver of currency movements. The so-called divergence trade hinged on the Federal Reserve’s tightening bias relative to the easing bias of the European Central Bank and Bank of Japan and was a fairly reliable organizing principle for foreign-exchange investors. On a trade-weighted basis, the...

Disruption is either the gospel or the monster of the new millennium, depending which side of the trade you’re on. Every technology company worth its salt is aiming to disrupt something, and enough of them are succeeding that many conventional businesses face an existential threat. Why get a hotel room when you can rent a house or apartment on Airbnb? Why wait for a taxi when an Uber will come at the touch of a button? Why employ humans when there are faster, more precise robots?   But...

Institutional hedge fund investors surveyed by Credit Suisse predict a 3.5 percent increase in hedge fund assets under management this year. That would push industry assets back over $3 trillion, a rebound from January, when assets declined to $2.96 trillion. January marked the first time industry assets dipped below $3 trillion since May, 2014.   “Institutional investors remain committed to their hedge fund allocations and are optimistic for further growth in the industry during...

It’s been a tough couple of years for value investors. Over the long term, value stocks have outperformed momentum and quality in most regions, sectors, and size segments. Since 2014, however, the opposite has been true. Between the first quarter of 2014 and the first quarter of 2016, momentum investing has proved dominant. Cumulative excess returns for momentum stocks reached 12.9 percent during that time, while so-called “quality” stocks delivered 4.7 percent and value stocks just 0.8...

Over the last 18 months, the price of a barrel of Brent crude has dropped from $115 to $35. And the effects of that steep decline have rippled far and wide: spreads between high-yield bonds and Treasuries have opened up; U.S. inflation expectations have plummeted, and cyclical stocks have handily underperformed defensive ones.   Early on in the decline, the consensus opinion was that lower oil prices would serve as a catalyst for global economic growth. Consumers would save at the...

Are financial markets wrong to be so obsessed with rate changes?   Until late last year, no American or British investment professional in their 20s – and only very few in their early 30s – had experienced a rise in their domestic interest rate during their working lives. That all changed on December 16, 2015 as the US Federal Reserve finally increased rates and reversed a trend that had dominated financial markets for almost a decade.   And yet, although the rate hike was...

When it comes to global financial markets, China is in the driver’s seat. After it was reported in early January that the world’s second-largest economy grew at its lowest rate in 25 years in 2015, Credit Suisse’s Global Risk Appetite index slipped into panic mode – a rare occurrence that has typically only followed major macro events such as the failure of Bear Stearns or the U.S. sovereign debt downgrade.   China is currently in the midst of what might be called a triple bubble...

The first few days of 2016 were not kind to European and American equities: They each fell 8 percent in the first nine trading days of the year, the worst-ever start to a new year. But the year’s inauspicious beginning isn’t necessarily a sign of things to come — at least, not for European stocks. From the potential for further easing by the European Central Bank to a resilient regional economy, a host of factors play into an increasingly promising forecast for European...