Research Note: January 2016

February 09, 2016 | Market Commentary

2016 has made quite an entrance so far with the S&P 500 experiencing the worst beginning to a calendar year (through the first 10 trading days of the year) in history. The financial press has attributed the recent volatility to a variety of suspects, including concerns about Chinese economic growth, falling oil prices, fears of a U.S. recession, and the possibility of a policy mistake by the U.S. Federal Reserve.

Focusing on Long-Term Return Objectives in a Low Return World

January 22, 2016 | Active Management

Assumptions about future returns are made every day by a wide variety of investors. Defined benefit pension plans rely on return assumptions to calculate funding status and necessary contributions while individual investors use them as a guide to determine if they are properly saving for retirement.

Country in Focus: India

December 21, 2015 | Emerging Markets

India is currently one of the fastest growing economies in the world, in addition to being one of the largest. It is likely to surpass Italy and Brazil in nominal GDP within a year or so, and it will almost certainly surpass China as the fastest growing major economy in 2015.

U.S. Labor Market Monitor

December 15, 2015 | Domestic Markets

As the Fed announces December 16 whether a hike in interest rates at this stage of the economic cycle is appropriate, a major consideration of policy officials will be the current state of U.S. labor markets. For an in-depth perspective into the various indicators we monitor to assess the health of labor market activity, we offer our updated chartbook, the United States Labor Market Monitor.

The U.S. Manufacturing Renaissance: Weathering the Storm

November 23, 2015 | Domestic Markets

We first explored the U.S. manufacturing renaissance in 2012, when our perspective was that a resurgence of domestic manufacturing activity would be a silver lining—not a silver bullet—for U.S. economic growth. This assessment has proved to be correct over the past three years, and we believe that the trend is likely to continue going forward.

Country in Focus: Russia

September 16, 2015 | Emerging Markets

Russia has claimed its fair share of news media headlines in the past two years, starting with allegations over the country’s covert involvement in the initial uprising in Ukraine and subsequently its annexation of Crimea in March 2014.

Country in Focus: South Korea

August 07, 2015 | International Markets

South Korea is a country which tends to get bounced back and forth between being thought of as an emerging market or a developed one, depending on who you talk to. In terms of the investment risk profile of the country, we tend to think about it as a developed country, since it has many developed country characteristics.

Accounting for the U.S. Consumer’s Gas Savings Windfall

July 23, 2015 | Market Commentary

Personal Consumption Expenditures (PCE) have increased throughout the recovery as incomes have grown and confidence has improved. This needs to be taken into account when analyzing growth in PCE linked to the fall in energy prices in order to avoid confusing growth that would have occurred regardless of the change in energy prices.

Country in Focus: Germany

July 13, 2015 | International Markets

Germany is a large, economically diverse, and technologically advanced export powerhouse. Its hypercompetitive economy has benefited immensely in recent years from past reforms to its labor market regulation and welfare system. The country has developed a well-educated and skilled labor force, solid infrastructure, and a strong legal framework characterized by robust institutions and relatively low levels of corruption.

Country in Focus: The United Kingdom

June 01, 2015 | International Markets

The United Kingdom of Great Britain and Northern Ireland has many structural characteristics that are very similar to the United States. The country has strong legal and political institutions, characterized by a well-established rule of law, a transparent regulatory framework, and a relatively business-friendly policy environment.

Evaluating Valuations: An Environment of Elevated Risk for U.S. Equities

May 20, 2015 | Domestic Markets

The November 2014 article titled Three Dimensions of Risk and Returns for U.S. Equities discussed our framework for minimizing the risk of sustained capital loss, a key tenet of the investment process at Manning & Napier. The indicators that are used to analyze this risk from a top-down perspective are grouped into three families: economic, valuation, and liquidity/sentiment.

Country in Focus: Australia

April 30, 2015 | International Markets

Australia is a country which has been referred to in recent years by various financial media outlets as everything from a lucky country to a miracle. After all, the country has been among the very best performing developed economies over the course of the past two decades and has not experienced a recession in over 24 years.

U.S. Labor Market Overview

April 22, 2015 | Domestic Markets

The employment situation is vastly improved from its Great Recession nadir, and the headline unemployment figure suggests the labor market is at equilibrium. For this reason, taking a detailed pulse of the condition of the United States labor market is warranted at this juncture.

The Impact of QE on European Financial Markets

March 30, 2015 | International Markets

On March 9, the European Central Bank began a long-awaited Quantitative Easing program whose principal mission is to reverse the very sharp drop in measures of actual inflation as well as future inflation expectations in the Eurozone member economies.

Country in Focus: Brazil

March 27, 2015 | Emerging Markets

Brazil is the world’s seventh-largest economy and its population of over 200 million continues to gain purchasing power. The middle class is growing, and accounts for more than half of consumers. Millions have been lifted out of poverty, but government intervention in the economy continues to cause...

Emerging Markets Investing

March 17, 2015 | Emerging Markets

The long-term growth prospects in many of the world’s developing economies are extraordinary, even more compelling when compared to the slow growth of the developed world. The consumer markets in many of these countries are large, with rapidly expanding middle class populations...

Country in Focus: Japan

February 17, 2015 | International Markets

Japan is one of the most technologically advanced and innovative economies in the world. The country features remarkable business sophistication and well-developed infrastructure, and produces very high value-added products. However, macroeconomic weaknesses such as the massive public debt...

Life in the Last Mile

February 17, 2015 | Market Commentary

Life is lived in the last mile. The last mile is a term that originated in the telecommunications, cable, and Internet industries to reflect the final leg of the system connecting the customer. It is thus not a literal mile but a useful metaphor...

The Eurozone and Concerns of a Grexit

January 20, 2015 | International Markets

Europe and the United States exited the Global Financial Crisis in 2009 on a similar economic growth trajectory, but Europe soon took a turn for the worse. Concerns over previously underreported levels of Greek sovereign debt led to widespread fears regarding the health of other nations...

A Closer Look at Small Caps

January 09, 2015 | Market Commentary

When we wrote about small cap stocks in June 2011, we concluded that they faced a number of headwinds and were unlikely to continue their strong outperformance versus large caps that began in 2000. This outlook was strongly supported by relative valuations versus...