Commodity Collapse Waylays Global Recovery
Amidst apparent renewed bedlam globally, the U.S. economy bounced back from a winter-distorted first quarter and remains on the “moderate +” path we have expected, growing at near 2.5 %.
The UK is generating growth similar to that of the U.S. Europe is a little weaker but still growing, and Japan seems to be flat. The sense of turmoil and the scary headlines are primarily emanating from worries about China and selected other emerging economies, either dependent on commodities or suffering from excess debt and/or weak government policies.Download PDF
Concerns Arise From China’s Economy, Commodities, The Dollar And Fed Funds
After several years of below-normal volatility, uncertainty returned to global equities in the third quarter, particularly in emerging markets.
We call it “bouncing off the guard-rails”, and we feel it’s impossible to predict either short-term market shifts or the factors that bring them about. The triggers, this time, included a perception that China’s economy may be weaker than investors thought. Fears were inadvertently launched by government actions around stock prices and currency levels; the continued heavy pressure on commodity producers from sharply lower prices; and uncertainty with regard to a Fed rate hike and implications that might have for underlying U.S. growth.Download PDF
Fixed Income Portfolios
Fed Parses Data, Concludes “Not Quite Yet”
Low U.S. inflation and a concern for global market turmoil held the Fed back from increasing the Fed Funds target at its September policy meeting, kicking the can further down the road. The delay in an interest rate hike is positive for the equity and fixed-income markets in the near term, given that the U.S. economy is “growing at a reasonable clip.”Download PDF