Market
Commentary regarding global market performance and outlook
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Morningstar Bond Market Commentary, November 2010
A snapshot of the bond market returns may lead one to believe October was an uneventful month. Nothing could be further from the truth; the inflation/deflation debate raged through the confluence of diametric trends as the markets await the details of the next wave of quantitative easing.
Are Investors truly embracing international diversification?, October 2010
Lately we have seen a coalescence of opinion that the significant cash flows into international equity funds represent investors’ growing comfort with diversification beyond U.S. borders.
Asset Allocation, Fall 2010
One of the major determinants of investment success over the next decade will be correctly anticipating the trend in general price inflation. How long the current deflationary environment persists, and how well the exit from quantitative easing is implemented will decide the relative performance of the three principal asset classes: fixed income, precious metals and equities.
T. Rowe Price Report, Fall 2010
A Perspective on Financial Topics for Our Investors
October Treat and the Folly of “Gaming Diversification”
We pointed out last month that the September surprise in equity returns was a signal to get aboard the “express elevator” — that is, it’s time for sidelined investors to get back into the equity markets.
Municipal Markets Investment Commentary
- Performance in the tax-exempt market was weak in October, but consistent with seasonal expectations and similar to government bond performance.
- Municipal supply was robust, with the continued popularity of Build America Bonds (BABs) contributing to significant taxable municipal issuance.
- Without clarity on the BAB program’s extension, issuers are expected to offer a heavy calendar of new issues throughout the remainder of the year.
Fixed Income Market Commentary
- Economic indicators continued to deliver “mixed messages” in October, as policy anticipation drove markets in advance of both the elections and monetary policy.
- Beyond reaffirming its decision to maintain historically low Fed Funds policy rates, the Federal Reserve announced expansion of its balance sheet via quantitative easing.
- With an eye toward managing inflation expectations, the Fed embarked on this path, but it could have negative consequences in the absence of a fiscal complement.
Equities Alive and Well
It was August 1979 when BusinessWeek magazine famously declared the “Death of Equities,” as millions of investors defected from the stock market into higher-yielding assets and perceived safe havens that included bonds, money market funds and precious metals.