Natixis AM | In Q1 I had the chance to travel and spend some time with our U.S. advisor and investor clients. While no two portfolios are identical, I was struck by one major commonality: the amount of cash and uninvested balances left in portfolios. On a recent trip to the West Coast, advisors frequently noted portfolios with 10%–40% (!) cash.
UBS | We hosted three meetings in HK this week for Chinese construction companies, which included China Railway Construction Corporation (CRCC), China Railway Group (CRG) and China Communications Construction Company (CCCC).
Benjamin Cole via Historinhas | Probably bank and other financial institution bailouts, within context, are positive for the economy. Indeed, aggressive robustly financed bailouts should be conventional policy, while other regulations eschewed, as long as shareholders and convertible bondholders take the first, big and hard hit of any major financial institution failure.
“This abnormal aversion to risk may be the worst legacy of the crisis. The reason why US companies do not use their extremely high profits – and stock market valuations – to invest, open up new markets…but rather to buyback their own shares and further boost their share price and bonuses.”
Market timing has long been the holy grail for investors, and evidence suggests that it works but might be a tricky game to play.
Caixin | Until recently, Chinese officials could rest assured that their path on the bureaucratic ladder went only upward, unless they were punished for some reason, usually corruption. No more. A policy passed in June 2015 by the Communist Party’s second-highest decision-making body, the 25-member Politburo, stipulated that officials should be demoted for failing to meet the requirements of their post.
James Alexander via Historinhas | As the FOMC increasingly avers that it is data-driven the demand to have better data has led to greater focus on aggregated current data. Whether the FOMC really looks at it, given it is ignoring its own Labour Market Conditions Index, is hard to say.
Caixin | Moving into the third year since the central government reinvented the borrowed notion of public-private partnerships (PPP) to encourage private investment, local authorities have announced thousands of projects that are to be funded through such a scheme.
The massive release of the Panama Papers has rocked the financial and political world. The leaked documents from Panama’s Mossack Fonseca law firms contain more than 11 million files involving 214,000 companies set up over the last four decades.
UBS | S&P 500 consensus expectations call for -8.1% earnings growth in 1Q2016, the largest decline since the Financial Crisis. While results should beat as usual, YoY forecast declines for 7 of 10 sectors make it unlikely that positive price reactions to “better than expected” will be an upside catalyst for the broader market.