Beyond Bulls & Bears

Fixed Income

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Fixed Income

The Underappreciated Story: How Brexit Threatens to Shift the Balance of Power in the EU

“We think the United Kingdom’s departure from the EU may start to show up differences of attitude among different factions within the trading bloc. And, it may bring about a switch in the balance of power in the European Parliament.” David Zahn, Head of European Fixed Income.

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Fixed Income

Global Economic Perspective: January

"Just as attempts to use historical precedents to predict the length and durability of the US economic cycle are undermined by the idiosyncratic nature of its recovery since the global financial crisis, much the same argument can be made about the wider global economy.” - Franklin Templeton Fixed Income Group

Christopher J. Molumphy, CFA |
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Equity

Keeping One’s Options Open: The Case for Global Convertibles

When the outlook is uncertain, it can be good to keep one’s options open. Alan Muschott, vice president and portfolio manager, Franklin Equity Group, says convertible securities’ ability to adapt to myriad market conditions makes them an attractive vehicle as we head into the uncertainties of the year ahead. He outlines why companies issue convertible securities—and why many investors find them an attractive addition to their portfolios.

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Multi-Asset

The Year Ahead: Will the US and Global Expansion Continue in 2018?

January is a month of resolutions and predictions, and perhaps more often than not, both tend to be abandoned come spring. While we don’t have a magic crystal ball to predict where the markets may be headed next, we do have a team of respected professionals who recently assembled to discuss whether they think last year’s economic momentum could continue—and where they see potential threats on the horizon.

Edward D. Perks, CFA |
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Fixed Income

Global Economic Perspective: December

“The pattern of a strong cyclical upturn in the global economy combined with subdued inflation looks set to continue for some time, in our view. Nevertheless, we believe increasing demand and a diminishing pool of labor are likely to create meaningful pricing pressures at some point.” - Franklin Templeton Fixed Income Group

Christopher J. Molumphy, CFA |
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Fixed Income

Fed Delivers Another December Rate Hike

“It’s important to note that the United States is still historically in a very low interest-rate environment, and frankly, keeping rates close to zero for a prolonged period really isn’t healthy. In our view, this tightening cycle actually represents a normalising of rates.” - Christopher Molumphy, Franklin Templeton Fixed Income Group

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Fixed Income

Why GCC Fixed Income Is an Overlooked Asset Class

Many investors could be underinvested in Gulf Cooperation Council (GCC) bonds, according to Dino Kronfol, chief investment officer, Global Sukuk and MENA Fixed Income. He explains why he believes the fixed income landscape is approaching a turning point—and why more investors may want to consider adding this dynamic asset class to their portfolios.

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Perspectives

How Technology Has Set Industries on a Journey of Opportunity

"As we look at the race for fully autonomous automobiles, the question of who will get there first—and more importantly who figures out how to commercialise and monetise this technology once they do get there—is still pretty wide open." - James Cross, Robert Rendler and Robert Stevenson, Franklin Equity Group and Aleck Beach, Franklin Templeton Fixed Income Group

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Fixed Income

Where Might Credit Risks Exist? Follow the Supply

“Companies—and entire Industries—have quickly disappeared. When there is tremendous change combined with heavy supply, there are going to be winners and losers. I think we are likely to see an increase in idiosyncratic risk in the marketplace going forward. I’d label this technological innovation disruption.” – Roger Bayston, Franklin Templeton Fixed Income Group

Roger Bayston, CFA |
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Fixed Income

Why Australia May Not Join the Rate-Tightening Party

“We don’t think the RBA is likely to raise rates in the next 12-18 months. There is a heavy load on the shoulders of Australian households. Australia’s economy is benefiting from global growth, particularly in China, but that growth would have to be quite significant to reduce household debt or improve wage growth. If these issues don’t improve in the next year or so, we believe the RBA’s next course of action could be a rate cut.” – Chris Siniakov and Andrew Canobi, Australia Fixed Income team

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Perspectives

Preparing for a Possible Post-LIBOR World

“We believe a change from LIBOR to an alternative benchmark would be significant. Global lenders use LIBOR to set interest rates for a variety of financial products, including interest-rate swaps, student loans, mortgages, collateralized loan obligations (CLOs) and floating-rate loans. A change would require amendments to contracts and credit agreements, underlying trillions of dollars in global assets.” – Franklin Templeton Fixed Income Group’s Mark Boyadjian and Reema Agarwal

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Fixed Income

In the Know: Trump’s Fed Chair Pick Seen as Market Positive

“The markets should take some comfort in Powell, as he is a current Fed governor and more or less represents the current state of affairs, business as usual. He has worked alongside Yellen since 2012, and they are philosophically alike (dovish bent).” Christopher Molumphy, Franklin Templeton Fixed Income Group

Christopher J. Molumphy, CFA |