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Global Growth Slows, Yield Curve Inverts, and Latin America Feels the Pinch
  The Expansion’s Endgame? Latin America: Caught In The Middle What The Yield Curve Is (And Isn’t) Telling Us   In this age of electronic entertainment and communication, it has been surprising to see bars using board games to attract visitors. Battleship, Connect Four and Trivial Pursuit have all found new life in these establishments, which are trying to buck
Long/ Short Equity Hedge Funds Are Back To Winning
Investors may finally be coming around when it comes to hedge funds, and it’s easy to see why. The Eurekahedge Hedge Fund Index climbed 0.89% in February. Although preliminary figures for the month suggest that investor outflows exceeded performance-driven gains in the month, final numbers for January indicate things are finally turning around. Long/ short equity funds in particular are
What Investors Should Know About MSCI's Rising China A-Shares Inclusion
What does a China A-share increase into the MSCI Emerging Markets Index and other regional indices mean for investors? Matthews Asia's portfolio strategy team offers its views. What changes are being made to the MSCI indices? Index provider MSCI is poised to increase the weighting and breadth of China A-shares exposure in its emerging markets index as well as its
Three Reasons Why It’s Time for a Barbell Strategy
As economic cycles enter their later stages, investors sometimes find that they’re taking too much risk to generate income. There’s a strategy that can help—and we think now is the time to use it. Pairing high-yield corporate bonds and other credit assets with high-quality government debt in a dynamic “barbell” strategy has been a good way to generate income while
Steady Fed Maintains Dovish Stance
The US Federal Reserve’s decision to keep interest rates steady at its March meeting came as little surprise, but its updated “dot plot” projections were interpreted by markets as sending a decidedly more dovish signal than expected. Franklin Templeton Fixed Income Group CIO Sonal Desai offers her take on the meeting, and why she feels markets shouldn’t read too much
Brexit Gets a Red Card, and the Fed Flattens its Dots
  Brexit May-hem Is the Dot Plot Shot? Getting Kids to Finish College   Carl reports from London, where Brexit fever is rising. While British politicians can’t figure out how they should stand in Europe, English Premier League clubs are much more confident of their positions. For the first time in a decade, four English football clubs have made it
China's Debt Problem
China's debt problem is serious, but the risk of a hard landing or banking crisis is, in my view, low. The reason is that the potential bad debts are corporate, not household, debts and were made at the direction of the state—by state-controlled banks to state-owned enterprises. This provides the state with the ability to manage the timing and pace
Moral Hazard in Emerging Markets: Papering Over the Cracks
From bank bailouts to the “Fed put,” moral hazard has long been a key determinant of market pricing and investor behavior. In emerging markets (EM), the International Monetary Fund (IMF) has been the traditional lender of last resort for many years, supporting numerous crisis-hit countries but attempting to avoid moral hazard by requiring that borrowers meet specific conditions and have
Looking Forward, Looking Back: 10 Charts After 10 Years
Just over a decade ago, global markets began to recover from the biggest shock in postwar history. In these 10 charts, we aim to show how much has changed since then and how market conditions over the past decade may influence big changes that are beginning to unfold today. Even as financial markets have rallied in early 2019, uncertainty is
The Deteriorating State of Earnings in Asia
Slowing global trade has weighed down export-oriented markets in Asia, and the regional earnings outlook has been deteriorating rapidly. Over the past six months, earnings expectations have been revised down 4% for the MSCI All Country Asia Pacific Ex-Japan Index.1 For December, the earnings revision ratio (which compares positive versus negative revisions) fell to 0.39, the worst reading ever recorded