We are pleased to present the latest editions of the Economic Monitor and the Market Monitor from Dynamic Funds Economics, prepared by Chief Economist Dr. Martin Murenbeeld and Senior Economist William Tharp; a division which provides independent analysis and research to retail and institutional interests from across the globe.
Dynamic Funds Economic Monitor
The Fed is preparing markets for a possible rate increase later this year. June 17 or July 29 would appear to be the earliest dates for an increase, should they eventually decide to raise rates. But the Fed also says that any policy tightening will be data dependent, and recent data have been consistently disappointing.
To wit, consumers, an expected source of strength, don’t seem very keen on spending their gasoline price windfall. Inflation is set to dip below zero for much of the year, meaning headline inflation will have a dampening effect on wage settlements (crimping consumers’ income). The disinflation is not all due to lower energy prices either; the sharp rise in the US dollar is contributing to import price deflation.
Dynamic Funds Economic Monitor - February 2015
Monthly Market Snapshot
Reports of the Death of Active Management May Be Greatly Exaggerated
A story from the January 12 edition of Barron’s, entitled “Return of The Stockpicker”, piqued our interest and provided some ammunition for those calling for the demise of active investing. Of course, the active versus passive management debate will not be settled in these paragraphs, but we felt that sharing some of the key points from the write-up would be of value. While the asset base of actively managed strategies remains far higher than that of the asset base in passive strategies, passive strategies are taking in dollars hand-over-fist. According to ICI, investors pulled roughly $100 billion out of actively managed domestic equity funds in the U.S., and put more than $100 billion into domestic equity-index funds and ETFs. That’s a huge swing.
Monthly Market Snapshot - February 2015
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Scotiabank's Global Forecast Update
Scotia Economics provides clients with in-depth commentary regarding the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary and public policy issues.
Still Waiting for More Economic Traction
Global growth is still on track to essentially repeat last year’s cycle-low gain of just over 3%. The uninspiring performance reflects the continuing sub-par pace of activity in many parts of the world, weak commodity markets — especially for energy and metals — emerging deflationary conditions in some countries and regions, as well as the dampening effect caused by structural reforms in a number of nations.
Expectations remain high that the U.S. economy will continue to generate improved growth, with increasing household and business activity and a strong U.S. dollar lifting demand for imports from around the world. A number of countries, such as the U.K., India, Thailand and Indonesia, should post reasonably good output gains, while the euro zone and Japan are likely to report more modest advances. China is expected to remain a relatively solid performer, though the pace of growth should slow further as the economy continues to transition away from government-financed investments and construction-related activity. The majority of nations around the world, however, are likely to record comparatively moderate growth rates. Some countries, Russia, Brazil, and Venezuela for example, are in recession.
Scotiabank Global Forecast - February 26, 2015