Friday, July 13, 2018

Investment Perspectives Podcast, Episode 2: Portfolio Adjustments for a Desynchronizing World

Our leading strategists discuss desynchronization, how trade has encumbered the market, and a shift toward the positive in market narratives.




You can read the full Investment Perspectives here.

In this month's issue:

“Portfolio Adjustments for a Desynchronizing World"
Mark Luschini
Global economic activity, which grew so uniformly from the second half of 2016 through 2017, has moderated. However, the pacing of the world’s major economies has also become differentiated. In the U.S., the economy continues to move at a pretty healthy clip, supported by the strength in consumer spending and the notable uptick in business investment. However, outside of the U.S., activity has slowed to a level that, while still positive, suggests we have likely seen the peak in their collective contribution to global growth. The backdrop is still constructive overall, but, in our judgment, it demands reshaping thoughts about an investment posture that has been geared for accelerating and synchronous global growth.

“Market Narratives”
Guy LeBas
Why does the value of one asset go up and the value of another go down? The trite answer is, of course, more buyers than sellers, and vice versa. Or, more accurately, buyers might be more motivated to acquire the asset than sellers, and that motivation drives prices higher. We at Janney’s Investment Strategy Group often refer to fundamental factors, such as the economic outlook, interest rates, or earnings as the drivers of asset prices, but really those fundamental factors go on to influence motivation, and the actual transactions move prices one way or another.

“Halftime"
Greg Drahuschak
A promising start to June succumbed to the all-consuming fear that a trade war could impair economic activity globally. Trade rhetoric sent the Chinese equity market spiraling lower as the Shanghai Composite Index ended June 20.62% off its high. The S&P 500 was down 5.35% from its all-time high.

Facing potential EU tariffs of 31%, Harley-Davidson (HOG) highlighted the difficult position companies here and abroad might face if trade disputes broaden.