News > Capital Markets

Ten Investor Takeaways From the 2018 Annual IMF/World Bank Meetings
Global central bankers, finance ministers and representatives from the private sector and civic groups gathered in Bali recently for the annual meetings of the IMF (International Monetary Fund)/World Bank Group. Below are 10 key takeaways from the discussions. 1) Investor global risk sentiment is cautious with no large directional views. This reflects higher uncertainty on U.S. and China trade policy,
The Taming of the Diversified Portfolio
The concept we discuss here goes back to before the advent of the written word, living in parables echoed in religious and secular texts alike. The precise wording has evolved, but the message has not changed materially over time. Cervantes put it on paper more than 400 years ago through the lips of Sancho Panza, and we still use a
Argentina and the IMF: Second Time's a Charm
Like shock therapy, Argentina’s new lending agreement with the IMF delivers immediate benefits: increased funding and front-loaded disbursements to meet the country’s budget through next year. It also comes with serious side effects, including a likely deep recession in Argentina and the risk of political resistance leading up to the country’s elections in 2019. Still, from an investment perspective, we
China Equity Markets: Pockets of Opportunities, Fundamental Research Is Key
Following a substantial run-up in 2017, China's stock markets experienced notable volatility in recent quarters. The MSCI China Index was down roughly -9% year to date measured in U.S. dollars as of September 30, 2018, while China's mainland, domestic A-shares were down nearly -20% measured in U.S. dollars for the same period. Valuations among A-shares in particular are reaching the
What Investors Should Watch as Brexit Talks Heat Up
As we enter another period of accelerated Brexit negotiations, how can investors best navigate the next few weeks and months? Our assessment is that a number of U.K. assets have already priced in a significant chance of a disruptive Brexit, but there is scope for further moves in either direction, depending on the path the negotiations take. Base case: Cooperative
The Dollar and Emerging Markets
Key points: The value of the U.S. dollar has climbed since April, and its rise has been one of the biggest drivers of asset performance in 2018. The stronger dollar is both a consequence of, and catalyst for, tighter financial conditions. The impact has been felt most severely within emerging markets (EMs), although escalating trade tensions have played a role
How Low Can Emerging Markets Go?
Emerging-market (EM) stocks fell in the third quarter and continued to diverge sharply from developed-market equities. While it may be too soon to buy into the weakness, investors should watch for signs that could herald a quick rebound. US, European and Japanese stocks have all advanced this year. But the MSCI Emerging Markets Index has tumbled in local-currency terms—and even
Three Hints on the Direction of Chinese Assets
The Chinese stock market is closed this week for the Golden Week holiday. On this side of the Pacific the markets have been busy this week with US Treasury bond yields breaking out and stocks selling off—especially technology—based on the revelation that China implanted devices in technology products shipped to the US. After being closed for five days, there is
Who’s Afraid of an Emerging Markets Meltdown?
Deep declines are usually followed by rebounds that leave emerging market stocks with gains by year end, as the structural tailwinds are driven by steadily expanding middle classes. Meaningful, consistent exposures to the asset class are key to capitalizing on the long-run double-digit returns. Botafogo district and Dona Marta favela, Rio de Janeiro, Brazil The term “emerging markets” has long
Digging Deeper Into the Recovery After the Global Financial Crisis
  Post-Crisis Reflections on Europe The U.S. Housing Market Finds a New Normal   Vaibhav Tandon reflects on the eurozone’s experience since the financial crisis. I attained my bachelor’s degree in foreign trade in 2008. I got hooked on economics in college, as I was attracted by the prospect of learning a science that could explain human behavior and offer