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      • The Importance of Profit Growth in Equity Returns

        31 July 2020   |  

        There is frequent debate among market participants about which style factors will be in favor in the future: growth, value, momentum, active, passive, etc. While we do not possess the ability to pinpoint the timing of when one style may be in favor over another, we believe the key element in determining the future path of a share price over the duration of an economic cycle is highly dependent on knowing which way profits are headed.

      • Trade Uncertainty on the Rise

        20 July 2020   |  

        The likelihood of a second trade deal this year with China appears to have materially faded—if it’s not off the table altogether. President Trump recently relayed he isn’t currently focused on  a phase-two deal. To be fair, a phase-two deal may have already been dead in the water for 2020, given the next round of negotiations was intended to aim at some of the bigger bones of contention between the US and China.  Then, too, Beijing officials have long stated their preference for a wait-and-see approach to ongoing negotiations—pending the US’s November election outcome. But now, it seems an even longer-term delay is possible—with potentially significant global ramifications.

      • There’s A New Question About Inflation

        10 July 2020   |  

        The Consumer Price Index (CPI), which has declined for three straight months and is up just 0.1% over the past year, paints a picture of stagnant inflation. But ask any pit master about meat prices this summer, and they’ll point to some noticeable price surges. Meanwhile, gasoline has seldom been cheaper. Of course, any summer travel plans were probably canceled due to the pandemic. And that’s not necessarily a trivial point—because, while headline inflation numbers always mask some important facts about what’s happening with prices in the components, the pandemic’s rapid effects on consumption patterns may be altering some of these nuances in more fundamental ways.

      • Brexit: The UK Decides Not to Let It Linger

        06 July 2020   |  

        In June, Brexit hit a rather inauspicious milestone, marking the four-year anniversary of the vote to split from the European Union but with little to show for it practically: While the UK has separated in spirit, it remains economically linked to the EU. However, with the UK Cabinet Office confirming that EU trade talks would not extend through next year, the breakup now has a firm date. What remains less clear is how trade will flow between the two regions moving forward.

      • FOMC Update: What, Me Worry?

        17 June 2020   |  

        The Federal Reserve concluded its June meeting, and the results were more dovish than anticipated as 10-year US Treasury yields retreated toward their all-time lows. That the Fed could even appear more dovish after its recent historic liquidity interventions may seem surprising, especially since some of those polices seem to be working (or at least seem not to be doing major near-term harm). Equity markets have erased most corona crisis losses, the latest employment data are shockingly positive and consumers are rushing back to stores given the opportunity. Financial markets are stable, and valuations are rising. The real economy is mending. Everything is looking up! So why is the Fed so glum?

      • Tracking the Economy Out of Lockdown

        26 May 2020   |  

        Memorial Day marks the unofficial start of summer and a key moment for the US in its journey through the COVID-19 pandemic: All 50 states have begun—to varying degrees—easing COVID-19 related restrictions.

        As restrictions on movement ease, we will start to get a handle on the answer to one very important question: What shape will the US economic recovery take? 

      • About That Tech Rally …

        22 May 2020   |  

        As markets have bounced off what has proven at least a near-term bottom on March 23, many have commented on narrowing breadth—i.e., market leadership among a decreasing number of stocks. Specifically, many noted the bounce was largely driven by the big tech stocks—particularly those commonly known as the FANG stocks (Facebook, Amazon, Netflix and Google, with some adding Microsoft and Apple and rendering the acronym unpronounceable). It’s worth noting that not all of those names are classified as technology companies from a GICS sector perspective: Facebook, Netflix and Google (Alphabet) all fall in the communication services sector, while Amazon is considered discretionary and Microsoft is the only “true” technology company.

        Nevertheless, sector returns—in the US and overseas—tell a slightly different story from a tech(/communication services/discretionary)-led bounce.

      • A New Era of Alphabet Soup?

        19 May 2020   |  

        Unprecedented times beget unprecedented measures—and with the global financial crisis still visible in our rear-view mirrors, global central banks have in some ways responded to fresh crisis with substantially similar tools. Meaning they’ve lowered rates (to the extent they can, given relatively low rates to start with) and they’ve offered various lending facilities to ensure markets maintain sufficient liquidity levels.

      • Employment Limbo for Millions

        11 May 2020   |  

        Another day, another grim US economic milestone amid the COVID-19 pandemic. On May 8, the US Labor Department released its April Employment Situation report. The magnitude of the numbers was momentous—nonfarm payroll employment fell by 20.5 million people and the unemployment rate jumped to 14.7%, from 4.4% in March.

      • Emerging Markets Case Study: India Amid COVID-19

        01 May 2020   |  

        Featured Author: Gurpreet Pal
        Gurpreet Pal is an analyst on the Artisan Partners Sustainable Emerging Markets Team.

        As the COVID-19 pandemic evolves, emerging markets are set to take center stage. The US, Italy and other developed markets appear to be flattening the curve and starting to reopen their economies. In comparison, many emerging markets appear to be in much earlier phases of an outbreak. Within EM, India is an especially intriguing country to watch as it seems to be managing the pandemic better than previously feared.

        India has the seemingly right conditions for a high number of cases and rapid transmission: