Current Perspectives


Assessing the Risk of a US Economic Recession

The severe equity sell-off has raised concerns of recession in the US economy. Continued market disorder would pose a risk to the expansion at some point, but key indicators today suggest the growth cycle is still on track.

High Yield: Could the 2008 Crisis Repeat Itself?

Does the recent stress in high yield mean we’re headed for another financial crisis? We don’t think so. The probability of anything happening in markets is never zero. But in this case, it’s pretty close.

Six Questions on Emerging-Equity Turmoil

It’s been a terrible start to the year for emerging-market equities. But by maintaining perspective on long-term trends, investors can gain the comfort to stick with developing stocks, in our view.

How Well Do You Know High Yield?

Do these statistics surprise you? While it may initially seem counterintuitive, the high-yield market’s quick rebound rate after downturns actually makes sense. Its consistent, high income makes it among the most resilient asset classes.

Why “Best of Breed” Often Fails

Many investors seek “best of breed managers across each category of stocks. The logic seems compelling: Diversify your risk across categories, while choosing the best performing funds using a framework such as Morningstar’s Style Box. Unfortunately, this approach tends to deliver poor outcomes.

Economic Perspectives


Global Economic Outlook February 2017

Global :: Structural headwinds still appear likely to keep global growth and interest rates from returning to precrisis norms. Yet recent data point to a brighter cyclical backdrop for the global economy. Interestingly, Donald Trump’s election victory and his promises of aggressive fiscal stimulus haven’t been the catalysts. When we consider a broad array of manufacturing indicators, including Purchasing Managers’ Indices, industrial production and trade volumes, it seems clear that the global economy reached its nadir last summer.

Yellen Signals Higher Official Rates

US :: Fed Chair Janet Yellen offered an upbeat assessment of the ­economy’s growth prospects, outlining the considerable progress that has been made toward the Fed’s dual goals on employment and price stability. In her remarks, Yellen clearly signaled that further adjustments in official rates will be coming in 2017. The wild card is whether the Fed will also be compelled to reduce the size of its balance sheet.

French Presidential Election: The One to Watch

Europe :: Victory for Marine Le Pen at the French presidential election is a low probability, very high impact event that could pose an existential threat to the euro and European Union (EU). In such a scenario, we would expect French bonds to come under heavy selling pressure. We would also expect peripheral bond markets to sell off, the euro to weaken and Bund yields to fall, perhaps sharply.

In the News