Tag Archives: US

Emerging Markets Bonds performance when US rates rise

January 22, 2019InvestmentsBonds, Emerging Markets, Historical Market Performance, USPēteris Celms

2018 was a tough year for bond investors. US Total Bond Market (represented by BND US ETF) returned -0.1% and Emerging Markets Bonds (represented by EMB US ETF) returned -5.5%.

Looking at last year’s returns, a logical question arose: what should we do with our exposure to Emerging Markets (EM) Bonds? Should we keep our allocation unchanged, reduce or eliminate it and replace it with US Treasuries?

The logical chain of thought dictates that investors require higher rates of return for higher levels of risk. If the FED is increasing rates, increased rates provide an option to have investments in safe government bonds with higher yields than before. It raises the required rate of return for taking higher risks, thus investors require higher yields on riskier assets for example EM bonds. It should also lead to a higher spread between EM Bonds and US Treasuries.

US Corporate Overseas Cash Holdings

June 14, 2017InvestmentsEquities, USPauls Miklasevics

Here is fantastic graphic from Bloomberg that shows US corporate overseas cash holdings:

LINK: US Corporate Overseas Cash Holdings

Global Outlook Improves

March 21, 2017InvestmentsEconomics, Emerging Markets, Europe, Stocks, USPauls Miklasevics

As market commentators attempt to deride the “Trump rally”, they are actually missing the broader picture of the multi-faceted economic growth that is going on globally.

Scott Grannis provides some great commentary and charts in the following blog post:
LINK: Global Outlook Improves

Here’s a interesting comparison between US and European stocks and industrial production:

Oh, and by the way, emerging market stocks are doing best of all:

US Small Business Optimism Explodes

January 11, 2017InvestmentsEconomics, Stocks, USPauls Miklasevics

US markets have continued to trade higher in the new year. Whether this unfettered optimism will be justified remains to be seen. However, what is abundantly clear is that American businesses are feeling very good about themselves and the prospect of tax reforms under a Trump presidency and Republican control of both the Senate and the Congress.

Here’s the latest blowout number from the NFIB Small Business Optimism survey:

The S&P 500 continues its upward trajectory:

Here’s Scott Grannis with some more charts. Grannis also makes the prescient point that US businesses have been under-investing in capital goods and that improved confidence could do much to fill the gap:

All Major US Stock Indices Are At All-Time Highs

November 22, 2016InvestmentsHistorical Market Performance, Stocks, USPauls Miklasevics

Stocks are hot, bonds are not. This is a dynamic that investors should be getting used to. We will soon start to see record outflows from bond funds. How much of that money flows to equities remains to be seen, but it should be enough to sustain this rally over the near term.

Trump’s victory seems to have ignited ‘animal spirits’ in capital markets…

S&P 500 INDEX

NASDAQ COMPOSITE INDEX

DOW JONES INDUSTRIAL INDEX

S&P MID CAP 400 INDEX

RUSSELL 2000 INDEX

European -vs- US Stocks

June 29, 2016UncategorizedEurope, Historical Market Performance, Stocks, USPauls Miklasevics

To follow up on the theme of our previous post regarding the different outcomes between our chosen European equity fund and the EURO STOXX 50 index, here is a more in depth commentary from Ben Carlson regarding historical of European stocks -vs- US stocks:

LINK: Taking Stock of European Equities

The Baltics and Beyond

Want to find out more about the latest trends in the financial industry? Keep track of updates to the BlueOrange blog.