The Policy Portfolio and the Next Equity Bear Market Fed Leaves Punchbowl, Takes Away Free Lunch (of International Diversification) Five Global Risks to Monitor in 2012
Rising Global Interest Rates Create Headwinds Three Profit Metrics to Avoid Earnings Season Myopia Changes in the Inflation Rate Matter as Much to Investors as the Level An Uneven Global Recovery — Lingering Effects of the Credit Crisis Perspectives on «Non-Traditional» Monetary Policy Do Past 10 - Year Returns Forecast Future 10 - Year Returns?
Given rich global stock market valuations, slumping quality of internal market action, and
rising global interest rates, this is not an appropriate time to accept significant market risk.
Rich global valuations, predominantly thin risk premiums, and uniformly
rising global interest rates haven't rewarded investors historically, on average.
The dollar bond market has turned cold for Indian firms after a record 2017, with
rising global interest rates, geopolitical concerns and market volatility prompting would - be financiers to demand either a higher yield or invest only in short - term paper maturing in two years.
Not exact matches
Such risks, uncertainties and other factors include, without limitation: (1) the effect of economic conditions in the industries and markets in which United Technologies and Rockwell Collins operate in the U.S. and globally and any changes therein, including financial market conditions, fluctuations in commodity prices,
interest rates and foreign currency exchange
rates, levels of end market demand in construction and in both the commercial and defense segments of the aerospace industry, levels of air travel, financial condition of commercial airlines, the impact of weather conditions and natural disasters and the financial condition of our customers and suppliers; (2) challenges in the development, production, delivery, support, performance and realization of the anticipated benefits of advanced technologies and new products and services; (3) the scope, nature, impact or timing of acquisition and divestiture or restructuring activity, including the pending acquisition of Rockwell Collins, including among other things integration of acquired businesses into United Technologies» existing businesses and realization of synergies and opportunities for growth and innovation; (4) future timing and levels of indebtedness, including indebtedness expected to be incurred by United Technologies in connection with the pending Rockwell Collins acquisition, and capital spending and research and development spending, including in connection with the pending Rockwell Collins acquisition; (5) future availability of credit and factors that may affect such availability, including credit market conditions and our capital structure; (6) the timing and scope of future repurchases of United Technologies» common stock, which may be suspended at any time due to various factors, including market conditions and the level of other investing activities and uses of cash, including in connection with the proposed acquisition of Rockwell; (7) delays and disruption in delivery of materials and services from suppliers; (8) company and customer - directed cost reduction efforts and restructuring costs and savings and other consequences thereof; (9) new business and investment opportunities; (10) our ability to realize the intended benefits of organizational changes; (11) the anticipated benefits of diversification and balance of operations across product lines, regions and industries; (12) the outcome of legal proceedings, investigations and other contingencies; (13) pension plan assumptions and future contributions; (14) the impact of the negotiation of collective bargaining agreements and labor disputes; (15) the effect of changes in political conditions in the U.S. and other countries in which United Technologies and Rockwell Collins operate, including the effect of changes in U.S. trade policies or the U.K.'s pending withdrawal from the EU, on general market conditions,
global trade policies and currency exchange
rates in the near term and beyond; (16) the effect of changes in tax (including U.S. tax reform enacted on December 22, 2017, which is commonly referred to as the Tax Cuts and Jobs Act of 2017), environmental, regulatory (including among other things import / export) and other laws and regulations in the U.S. and other countries in which United Technologies and Rockwell Collins operate; (17) the ability of United Technologies and Rockwell Collins to receive the required regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the merger) and to satisfy the other conditions to the closing of the pending acquisition on a timely basis or at all; (18) the occurrence of events that may give
rise to a right of one or both of United Technologies or Rockwell Collins to terminate the merger agreement, including in circumstances that might require Rockwell Collins to pay a termination fee of $ 695 million to United Technologies or $ 50 million of expense reimbursement; (19) negative effects of the announcement or the completion of the merger on the market price of United Technologies» and / or Rockwell Collins» common stock and / or on their respective financial performance; (20) risks related to Rockwell Collins and United Technologies being restricted in their operation of their businesses while the merger agreement is in effect; (21) risks relating to the value of the United Technologies» shares to be issued in connection with the pending Rockwell acquisition, significant merger costs and / or unknown liabilities; (22) risks associated with third party contracts containing consent and / or other provisions that may be triggered by the Rockwell merger agreement; (23) risks associated with merger - related litigation or appraisal proceedings; and (24) the ability of United Technologies and Rockwell Collins, or the combined company, to retain and hire key personnel.
«Our «rational exuberance» rests on a combination of above - trend US and
global economic growth, low albeit slowly
rising interest rates, and profit growth aided by corporate tax reform likely to be adopted by early next year,» Kostin said in a report for clients.
The report said one potential danger to greater
global financial stability is the possibility that long - term
interest rates could
rise more sharply than anticipated.
All 14 economists surveyed by Reuters predicted the central bank would keep its benchmark
interest rate unchanged while assessing the effects of its November
rate rise and
global
A combination of
rising inflation and
interest rates,
global trade tensions and emerging skepticism toward the tech sector pushed most asset classes into negative territory year - to - date.
The reasons behind the move include expected Fed
interest rate hikes,
rising inflation and
global growth.
A number of factors — such as
rising US
interest rates, the recurrence of big fluctuations in
global currencies, and the widening dispersion of equity returns across sectors and regions — may have helped to create an increasingly conducive environment for hedge - fund strategies, which have seen a positive turnaround in performance in recent quarters.
On the other side of the ledger, periods of
rising interest rates globally have, historically, exposed over-borrowing somewhere in the
global system.
Another unusual aspect of current
global interest rates is that long - term
rates, which are set by the demand for and supply of funds in capital markets, have remained quite low in the face of
rising official
interest rates.
For equity markets, the combination of low
interest rates, strong economic growth and low inflation has proved very beneficial, with
global share markets
rising solidly in each of the past three years.
Concerns over
global growth and
rising interest rates have pushed many out of this space, but our research indicates that there are pockets within the EM landscape that have been growing.
However, as the
global economic recovery continues, long - term
interest rates in Canada and elsewhere will nonetheless start to slowly
rise.
Among the factors that could drive prices higher: strong
global growth,
rising interest rates, and peak globalization.
However, by September 2013, the IMF had done a 360 - degree turn and had the U.S leading a
global recovery (albeit not very strongly) and the emerging market economies struggling with
rising interest rates, capital flight and falling exchange
rates, resulting from the possibility of a tapering of Federal Reserve Board monetary stimulus.
Global interest rates seem poised to
rise further as major central banks strike increasingly hawkish tones.
Against this
global backdrop, demand for higher yields is strong which will keep US
interest rates from
rising too fast.
Meanwhile, capital continues to leave domestic equity funds as investors de-risk in the face of
global macroeconomic uncertainty and the possibility of
rising interest rates in the U.S. this year.
When U.S.
interest rates started to
rise, however, frightened
global banks pulled credit lines and net capital inflows reversed, leading to lower investment, soaring unemployment, and currency devaluations.
They don't want to give the impression of a very rapid
rise of
interest rates because they don't think that a rapid
rise in
interest rates is justified given the current
global environment.
Long - term treasuries will likely still work as ballast when it matters most (
global risk - off events), but we see short - term U.S. debt now offering compelling income, along with a healthy buffer against the risk of further
interest rate rises.
That tantrum refers to the potential reaction of investors and
global markets — accustomed to years of easy money — in the face of a simultaneous
rise in
interest rates and yields in the US, Europe and Japan.
Brazil and South Africa market values are set to
rise most in 2014, according to the
Global Housing and Mortgage Outlook, from Fitch
Ratings, but
interest rate rises will hit values, it predicts
The
global stock market rout of the past week was sparked by concerns over a possible
interest rate rise by the U.S. Federal Reserve and not by the devaluation of China's yuan currency, a senior Chinese central bank official told Reuters on Thursday.
As we covered this spring (WILTW May 25, 2017), the International Monetary Fund's annual
Global Financial Stability report included a stark warning about the health of the U.S. economy: 22 % of U.S. corporations are at risk of default if
interest rates rise.
Rising interest rates at the same time as
global financial distress can be a potent combination, as they were in 2006 and 2007.
The organization cited slower growth in emerging markets, especially in China, falling commodity prices, and
rising interest rates in the U.S. as potential risks to
global growth.
ANSWER: - Morgan Stanley's
Global Investment Committee supports that
interest rate normalization will provide headwind for investors using bonds for principal preservation, as
rates rise its likely longer duration bonds will fall.
Despite another
interest -
rate rise in the US, residential sales
rose 44 % month - on - month, with a comeback of both sellers and buyers, says leading
global agency,...
In the first quarter, the yellow metal
rose 16.5 percent, its best three - month performance since 1986, mostly on fears of negative
interest rates and other
global central bank policies.
«The flip side is that when
interest rates rise, some of that appetite might be lower over time,» says Axel Merk, chief investment officer of Merk Investments, which manages mutual funds that invest directly in
global currencies.
Talk about a green light situation, leading up to last Friday's release of the February employment data, the investing landscape had three forces acting as potential headwinds to an otherwise secular bullish trend — increasing
interest rates,
rising inflation and
global trade tariffs.
Rising interest rates in the midst of weak U.S. and
global economies will put additional pressure on the average American.
So there are lots of those long - term factors, demographics, aging population,
global competition that mean that long - term
interest rates may not
rise at the same level, but one can't help but feel that we have seen six, seven years and in some cases, 10 years now post
global financial crisis of near - zero
interest rates and it's just, I suspect, there are a lot of market practitioners have gotten used to that idea and haven't really gotten their heads around the fact that we are still seeing Fed governors suggesting we have got one more
rate increase this year and potentially two or three coming out next year.
Global equity sentiment remains a bit shaky as concerns over
rising commodity prices and higher
interest rates continue to suggest lower corporate margins for the...
Global equity sentiment remains a bit shaky as concerns over
rising commodity prices and higher
interest rates continue to suggest lower corporate margins for the remainder of 2018.
U.S. banks have also posted strong first - quarter earnings, helped by
rising interest rates, improving
global growth and increased trading revenues.
Instead, there are external forces at work here, including the strong U.S. dollar, fears of
rising interest rates and a slowing
global economy, not to mention possible price manipulation.
Outside of that group, all of the other countries currently have lower real
rates relative to their pre-crisis average
rate, either because of low
interest rates or
rising levels of inflation, suggesting potentially sluggish
global growth going forward.
What if
interest rates rise simply due a bond bear market, whether due to inflation, or
global competition for capital?
«
Rising interest rates are usually a symptom of the success of the economy, and companies are benefiting from it,» says Seth Masters, chief investment officer for Bernstein
Global Wealth Management.
And such a crash could be triggered by a number of events — a recession that causes widespread unemployment,
rising interest rates and even
global shocks like failures in China's opaque shadow banking system.
Rising Stock ETFs,
Global Allocation ETFs, ETFs & Stock Valuations,
Interest Rates & ETFs, ETF Allocations
Falling US$ when (US govt impotence, China revalues yuan, Fed starts the printing presses again, zero
interest rate policy for x years) = Gold
rises = Commodities
rise = US stocks on sale (especially one's with
global exposure) = US exports
rise = US profits
rise = inflation
rises.
All else being equal, capital seeks the highest return, and
global money tends to migrate to currencies where
interest rates are
rising and away from currencies where
interest rates are falling.
The
global banking body cautioned that its
interest rate sensitivity figures are not the result of a «proper stress test,» and noted that a
rise in
rates would take time to translate into higher debt service demands.
Jason Vaillancourt, Co-Head of
Global Asset Allocation, discusses the impact of
rising rates on corporate ability to reduce
interest expenses.