Beyond Bulls & Bears

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Fixed Income

Italian Election Outlook and Why We Don’t See an ECB Rate Hike Before 2020

The upcoming Italian election is not attracting the same sort of attention among investors as votes last year in France and Germany. For that very reason, David Zahn, Franklin Templeton’s Head of European Fixed Income, believes an unexpected result might provoke an outsized market reaction. And while investors seem more preoccupied with the trajectory of eurozone monetary policy, Zahn believes there are good reasons to think the European Central Bank will hold off until 2020 before pushing interest rates up.

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Fixed Income

1-on-1 With Michael Hasenstab: Market Changes and Challenges

Take an around-the-world market tour with Templeton Global Macro CIO Michael Hasenstab in our latest “Talking Markets” podcast. Hasenstab shares his thoughts on navigating today’s market challenges. He covers recent market volatility, inflationary threats in the United States, upcoming elections in Latin America, potential “fault lines” in Europe and credit risk in China.

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Equity

Earnings Growth Underpins Our Solid Outlook for European Equities

Some investors seem to be questioning whether there’s still room for additional growth in European equities, particularly if interest rates start to rise. However, Templeton Global Equity Group’s Dylan Ball suggests labour reforms across the continent should give many firms the operating leverage they need to drive further earnings growth during 2018.

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Equity

Seeing the Big Picture in Market Corrections

While we don’t know when the equity market’s recent volatility will settle down, it’s important to consider the big-picture, fundamental backdrop for the market, and not get caught up in short-term sentiment swings, according to Franklin Templeton’s head of equities, Stephen Dover. And, he believes the fundamental backdrop still looks solid.

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Perspectives

Keeping Calm When Volatility Strikes

While volatile markets occasionally present a challenge for global investors, it is our view that a knee-jerk reaction is rarely the best response. With careful consideration, the benefit of experience and an active approach, we believe periods of market turmoil can often be a time of great opportunity.

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Equity

Insights from the 2018 US Consumer Electronics Show

“We go to the Consumer Electronics Show (CES) to see how leading public and private technology companies are positioning themselves for what is next, and what products are likely to break into the mainstream. At this year’s CES, we saw three key themes: smart speakers, autonomous driving and artificial intelligence (AI).” – Jonathan Curtis and Robert Stevenson, Franklin Equity Group.

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Equity

Notes From the Trading Desk – Europe

We’ve seen some dramatic headlines in the wake of last Friday's US equity selloff, but it’s important to remember that equities have had an incredible run over the past year. In relative terms, we consider this pullback to be reasonably small. - Franklin Templeton European Trading Desk Team

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Equity

What Might Be More Important than Brexit to UK Equities Is…

“We think there are reasons to believe Brexit should represent just a blip on the country’s long-term economic prospects. Although it may feel like a major issue right now, Brexit likely won’t define the United Kingdom in 5-10 years.” - Colin Morton, UK Equity team.

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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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Alternatives

First Quarter Hedge-Fund Strategy Outlook: K2 Advisors

“The bottom line is that we believe the massive tide of low-cost money that lifted all boats and allowed for carefree sailing is receding. Investors who are not prepared for this change may be exposed to significant risks.” - K2 Advisors

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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

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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.