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Insights

With decades of experience investing in global equity markets, our portfolio managers develop quarterly Market Outlook and Investment Insights features to provide insight into our thoughts and views and to help our clients navigate the global equity markets. Read our Insights below, or subscribe to have new Insights delivered to your email.

Market Outlook

Goldilocks versus 3 Bears

Market Outlook: 3Q 2024

Global equity investors have driven stocks higher this year. The main MSCI index for global stocks is up almost 20% year-to-date. An objective observer could be forgiven for presuming that the outlook for investors is bright. The name sometimes associated with an environment such as the current one facing investors where there appear to be no discernable obstacles on the horizon is Goldilocks. It is said that markets are in a Goldilocks period, where naught but blue skies are to be expected. A sage of investing once said that prudent investors should strive to be fearful at such times, especially if other investors seem to be getting greedy. We believe this to be such a time. Caution is warranted as there may well be trouble brewing in this apparent investment paradise. In other words, Goldilocks needs to be on the lookout for the bears...

Waiting on Rate Cuts... Still

Market Outlook: 2Q 2024

Interest rates have moved higher and stock market investors as well as their bond buying brethren are anxiously awaiting a wave of global policy rate cuts to put a firmer foundation under the global rally. That wait might go on for a while because current financial conditions are looser than most market participants believe. Yes, government bond yields, and the policy rates which inform them, are higher than they were a couple of years ago before central banks the world over began a campaign of rate hikes the likes of which had not been seen for decades. Their purpose was to force the inflation genie back into the bottle. While inflation no longer rages like an inferno, neither are the policymakers rushing to plaster “Mission Accomplished” signs all over the place...

The Everything Rally Extends into Extra Innings

Market Outlook: 1Q 2024

2023 was a year that defied expectations. First, the most anticipated recession in the history of the world never happened and then stocks went on a massive runup. Well, apparently the ride is not over yet because aside from ushering in the beginning of the 145th Major League Baseball season, the end of the first quarter also witnessed a continuation of what has come to be called the “Everything Rally.” Much of the credit for the global stock market rally should go to the world’s central banks. Primary among them would be the United States Federal Reserve Bank...

2023: It's Been a Wild Ride, Where to From Here?

Market Outlook: 4Q 2023

2023: Interest Rates Return to Rule the World

Market Outlook: 3Q 2023

This Is What a Soft Landing Looks Like, People

Market Outlook: 2Q 2023

Volatility Rears its Head... Again!

Market Outlook: 1Q 2023

And the Winner is...

Market Outlook: 4Q 2022

Picking Fights with the Fed

Market Outlook: 3Q 2022

Investment Insights

China Needs to Rethink their Growth Playbook

Investment Insights:

October 2024

In a surprise move last month, China’s politburo announced an array of stimulus measures to promote economic growth back to the target 5% rate and stabilize the capital markets as well as the property sector. Many have referred to these measures as the biggest bazookas triggered by Beijing and the PBOC to bolster economic growth and an equity market that has languished for the last 5 years. Chinese GDP growth slowed to 4.6% in the latest quarter, which is below the government target of 5%. And the Chinese stock market has been one of the worst performers in the last few years, lagging most developed and emerging equity markets. This raises the question of whether these measures initiated by the Chinese government are enough to pull China out of its doldrums. And a bigger question is whether or not they can change China’s growth trajectory, putting the economy on a higher growth path...

Will Small Caps Continue to Underperform? We Think not.

Investment Insights:

June 2024

The risk versus reward on small capitalization stocks has historically been attractive relative to their large capitalization counterparts. Small cap stocks have tended to outperform large caps over the long-term relative to the risk thus driving their premium. Often times, the premium on small caps has been justified due to their higher growth as well as the opportunity they represent to find hidden gems that could be a potential target for a merger or an acquisition. Furthermore, market inefficiencies and a lack of information make the small cap universe a fertile hunting ground for investing. We think that small cap stocks could start to outperform again. Read why...

Creating Value from "Corporate Value-Up"

Investment Insights:

March 2024

The reforms taken by the Japanese government, discussed in our November 2023 issue, seem to be working as the Japanese equity market has decoupled from the other international markets in the last year, besting most of the markets outside of the United States. The outperformance of Japanese equities has not gone unnoticed. South Korea’s Financial Services Commission (FSC) just announced a similar plan to the one in Japan called “Corporate Value-up Program”. In this report, we analyze some of the underlying idiosyncrasies of the Korean market and conclude that the Value-Up Program will take time to be impactful.

When Cash is Not King

Investment Insights: November 2023

Historical data show that global equity market leadership tends to run in long cycles with new winners and losers every decade. The Emerging Markets outperformed in the 2000’s while the last decade was dominated by US equities. One only has to go back to the 1980’s to find a period when Japanese equities led global markets. Since then, the Japanese equity market has languished. Over the last year, however, Japanese equities have started to work again. This begs the question: will the rally persist, and can Japan be the “must own” asset class of the next decade?

Market Breadth in International Equities

Investment Insights: July 2023

Is Active Investing Making a Comeback?

Investment Insights: April 2023

Why Intl Equities Could Outperform

Investment Insights: January 2023

Changing Dynamics in Emerging Mkts

Investment Insights: October 2022

Have Buybacks Peaked?

Investment Insights: April 2022

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