Main content

Ask our strategists a question

Do you think we will see an uptrend in the Euro zone by year end?

In our midyear update we tripled our GDP growth target for Eurozone. Developed economies Europe, US, Japan are the bright spots as EM struggles. Germany in particular is hitting on all cylinders and Eurozone markets are up double digits this year.

Will negative earnings growth trigger a defensive position to the models?

Yes, if quarterly earnings growth for the S&P 500 year over year are negative then GPMM models and funds are moved to defensive position.

What should we be telling our clients after last week's selloff?

The Global Perspectives October 2014 article gives an in depth assessment to the issues that started with poor German reports on exports and factory orders. The other surprise was the unprecedented climb in the dollar in the third quarter creating disruption in commodity markets especially oil. The dollar rising is not especially a problem it is the speed in which it rose. The biggest concern for global markets is a lack of inflation and this makes it worse since a strong dollar essentially "imports" DEFLATION, in that it lowers prices of imported goods. Europe is the wild card since it looks likely that they are entering a 3rd recession since the end of the financial crisis. The markets are quickly erasing all gains year to date, which is very scary to investors, but we think selling is a mistake, especially before what we expect to be an exemplary 3rd quarter earnings season. Further positives, U.S. GDP hit 4.6 percent for the second quarter bolstered by consumer, manufacturing and housing strength. Although Europe is weak, they have been for the past 5 years, Emerging Market Asia is strong growing at a 5 percent rate.

Footer content