Insights / Blogs

Insights / Blog

Diverse views influence the investment decisions we make. Here, my colleagues and I share those perspectives to help you navigate global market and economic developments.

James Swanson
Chief Investment Strategist
Why I Blog | About Me

May 03, 2016

Time To Take A Step Back?



As a disappointing first quarter earnings season rolls on, I am beginning to feel more cautious about the markets in the months ahead. We're in the midst of a third consecutive quarter of poor profits and cash flows, and what's most troubling is the weakness that's spreading beyond energy and exporters to a broader swath of companies in the index. To me, this is a signal to reduce risk in many portfolios.

May 02, 2016

Invert the Pyramid



by Bill Adams, MFS Chief Investment Officer, Global Fixed Income

Many a market practitioner has been humbled in recent years trying to project the direction of US interest rates. Professional forecasters, futures markets, and even the Federal Reserve have all consistently gotten their interest rate calls wrong over the last half-decade.  At MFS we devote a great deal of fundamental analysis to forecasting rates, duration and the shape of the yield curve, and those elements make up an important part of our alpha generation toolkit. However, given the extraordinarily difficult and unusual market environment of recent years, we recognize there is an unusually low probability of getting one's rate call correct, and an even lower probability of getting it right consistently. That is simply not a reliable or durable source of alpha generation within a well-managed fixed income portfolio.

April 29, 2016

This Week in Review: Fed Leaves Its Options Open



For the week ended 29 April 2016
  • Fed leaves rates unchanged, notes slowing growth, downgrades global concerns
  • Bank of Japan declines to boost monetary stimulus; yen soars
  • US continues weak Q1 GDP trend
  • Eurozone growth beats expectations but inflation still falling

Global equities fell this week, led by Japanese shares as a soaring yen induced risk aversion. The Chicago Board Options Exchange Volatility Index (VIX) rose on the week from 13.95 to 16.26, while the yield on the 10-year US Treasury note held steady at 1.85%. West Texas Intermediate crude prices rose to $46.22 from $43.39 a week ago, and global Brent crude prices rose to $48.11 from $44.53.

April 28, 2016

Risk: Managing From All Angles


by Joseph C. Flaherty, Jr., Chief Investment Risk Officer

In the countless discussions I've had with clients about the best way to manage risk in a portfolio, the critical takeaway is always the same. Effective risk management isn't any one practice, but rather an entire process — an integral part of the firm's investment management process, to be more specific. At MFS our robust risk management process is built on a risk aware culture, an ability to view risk through multiple lenses and the insight to help prepare for the unexpected. Combined, these "building blocks" are aligned with our investment process and risk is factored into every investment decision we make.

April 22, 2016

This Week in Review: Global Oil and Net Interest Rate Margins Impact Company Fundamentals



For the week ended 22 April 2016
  • Oil rallies for the week
  • The ECB holds policy rates unchanged
  • Google charged by the European Commission
  • EM nations cut interest rates

Global equities rose this week led by energy- and commodity-sensitive companies.  The Chicago Board Options Exchange Volatility Index (VIX) was reduced on the week from 14.36 to 13.95, while the yield on the 10-year US Treasury note rose from 1.75% to 1.85%. West Texas Intermediate crude prices rose to $43.39 from $39.77 a week ago, and global Brent crude prices rose to $44.53 from $41.80 as talks among oil-producing nations to cap production fell apart.