Beyond Bulls & Bears

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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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Alternatives

Global Listed Real Estate: A Key Building Block

“One reason for real estate’s strong performance, even in a rising rate environment, is that rising interest rates tend to coincide with periods of greater economic growth. As economic activity gathers pace, it creates more jobs and, in turn, wages increase. Demand for real estate tends to move higher as well.” – Wilson Magee, Franklin Real Asset Advisors

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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

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Alternatives

Science Fiction to Science Fact: The Rise of the Machines

“Exponential growth in computer processing speeds, advances in big data, open-source software and cloud computing have all converged over the last decade to move AI from the realm of science fiction to science fact.” - Mat Gulley and Ryan Biggs

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Fixed Income

Do Markets Fully Understand the Implications of ECB Tapering?

"The [tapering] decision should set the ECB on the path to monetary policy normalisation, but we don’t expect it to be a quick journey. We expect the eurozone to maintain an accommodative approach and low interest rates for some time to come." - David Zahn, Franklin Templeton Fixed Income Group

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Equity

Why Europe’s Earnings Rebound Could Offer a Fillip for Active Value Investors

"We see signs that European companies are beginning to return to corporate earnings growth. We expect to see fundamentals reassert themselves at the heart of investment decisions. And against that background, we believe investors with exposure to European equities via a passive approach shift to active strategies.” – Dylan Ball, Templeton Global Equity Group

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Equity

Why Abe’s Victory Could Help Lift Japanese Stocks

“In our view, Abe’s victory could lead to four more years of pro-growth policies and the possibility of a second term for the very ultra-dovish Bank of Japan Governor Haruhiko Kuroda.” – Templeton Global Equity Group’s Cindy Sweeting and Alan Chua

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Multi-Asset

A Selective Look at Corporate Credit

“In line with a positive assessment of economic fundamentals, we view credit conditions as favourable. Interest rates remain low, corporate balance sheets generally remain strong and debt-service costs appear manageable. Markets still appear receptive to debt offerings.” – Ed Perks, Franklin Templeton Multi-Asset Solutions

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Fixed Income

Global Economic Perspective: October

In this month’s Global Economic Perspective, Franklin Templeton Fixed Income Group discusses the state of the US economy and monetary policy implications, the fallout from the German elections and impact of the Catalonia crisis in Spain.

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Fixed Income

Putting Geopolitical Tensions into Perspective

When world leaders talk, markets react. And with social media becoming mainstream, politicians have a new way of getting their message to the masses. Franklin Templeton Fixed Income Group’s John Beck discusses geopolitical tensions, the impact of social media and the broader macroeconomic issues impacting the global fixed income landscape.

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Equity

Why the Indian Equity Market May Need to Swallow a Bitter Pill

A slew of government reforms may have disrupted the Indian stock market in the short term. However, Sukumar Rajah, managing director and chief investment officer, Asian Equity, believes those reforms and a growing Indian middle class could present opportunities for long-term investors.

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Alternatives

Fourth Quarter Hedge-Fund Strategy Outlook: K2 Advisors

“While we cannot predict market tops or bottoms, we can be prudent in how we position portfolios contextually. Perhaps now is the time to consider dialing back risk to some degree. We believe the easy money in this cycle has already been made.” - K2 Advisors