The Fed did, as expected, hike rates at their last meeting. And interestingly, interest rates have done nothing but fall since that day. As I predicted in the last BWER, Greenspan’s conundrum is making a comeback. The Fed can do whatever it wants with Fed funds – heck, barely anyone is using it anyway – but they can’t control what the market does with long term rates. At least not without making a commitment like the...
Read More »Conservation Finance – Where Wall Street Meets Nature
The more boring sustainable investment products in nature are, the better. That is one of the findings of the 4th Annual Conservation Finance Conference that was recently held at Credit Suisse in New York. Investing in such products can provide a good, stable, current yield. "The return on...
Read More »Global Asset Allocation Update
There is no change to the risk budget this month. For the moderate risk investor, the allocation between risk assets and bonds is unchanged at 50/50. The Fed spent the last month forward guiding the market to the rate hike they implemented today. Interest rates, real and nominal, moved up in anticipation of a more aggressive Fed rate hiking cycle. Post meeting, a lot of the rise came out of the market. Nominal and...
Read More »Global Asset Allocation Update
There is no change to the risk budget this month. For the moderate risk investor, the allocation between risk assets and bonds is unchanged at 50/50. The Fed spent the last month forward guiding the market to the rate hike they implemented today. Interest rates, real and nominal, moved up in anticipation of a more aggressive Fed rate hiking cycle. Post meeting, a lot of the rise came out of the market. Nominal and...
Read More »Credit Suisse Launches European Political Risk Barometer
The current year we will see several elections held in Europe. With voters going to the polls there are many uncertainties associated. Investors should keep an eye on the political calendar. The European Political Risk Barometer developed by IS&P will support them to do so. Watch Michael O' Sullivan talking on...
Read More »Tokyo 2020 and Beyond
Credit Suisse expects the construction boom in Japan to continue beyond the 2020 Olympic Games in Tokyo. However, just like in the Olympics, there will be winners and losers among the companies hoping to win big. Construction-related companies are gearing up for a busy few years as Japan prepares...
Read More »Pension Risks in a Low-Interest Environment
As pension obligations look set to rise, companies will have to increase their pension contributions. Pension obligations have reached an all-time high for a number of companies in many countries, with the main reason for the poor shape of corporate pensions being the significant decline in...
Read More »Stock Picking Remains Key in 2017
A semi-annual overview of the most important drivers for global equity and credit markets The Equity & Credit Sector Monitor provides a semi-annual overview of the bottom-up fundamental drivers across all sectors, and furthermore presents our most and least favored stock and bond...
Read More »What Are Activist Investors Looking For?
Finally, there's the undeniable appeal of a company overflowing with cash, a tasty target for a campaign to initiate share buybacks or increase dividend payments. Which metric works best in identifying balance sheets that are attractive to activists? The ratio of a company's total cash relative to its market capitalization. The higher that ratio relative to one's peers, the more likely a company is to garner unwanted attention. When ValueAct Capital scored a seat on Microsoft's...
Read More »Behavioral Insights: Loss Hurts
To Sell or Not to Sell, That Is the Question Most investors have to face loss aversion in their own investment portfolios when they incur losses. For long term investments the best course of action is to stay invested through the ups and downs of markets. But what if an investment is short term or has a limited investment horizon and the remaining time is shorter than the time needed to recover? Imagine that an investor has bought a specific stock with the intention of holding it...
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