Obviously last week’s big news was the Federal Reserve Bank’s decision to leave the Federal Funds Rate alone. There were dozens of posts related to the topic. Only one made our list (only post for the entire week, actually).
Fed Leaves Interest Rates Unchanged – Loomis Sayles
Two posts this week without mention of volatility. The industry is awash in volatility-themed blog posts.
Is a Recession Coming? – BlackRock
“While I haven’t been overly bullish on U.S. growth, I believe this fear is overblown.”
Are You Forgetting Small Caps for Global Income? – WisdomTree
“Many investors wrongly assume that small-cap companies can’t afford to pay dividends because their main focus is on growth and they need to reinvest their earnings to support that growth.”
What a week for the industry. We don’t often get to start the week with a 1,000 point drop in the Dow Jones Industrial Average. So everyone seems to be discussing volatility’s relation to the 1,000 point drop. And the industry posted too many posts related to volatility; we selected the single best chart below.
China Crisis –M & G
“However in this instance it is very difficult to infer much from the behaviour of the Chinese market which has behaved in a manner unconnected with fundamentals for some time.”
Volatility Chart –TIAA-CREF (newcomer!) best chart of the week
This is a correction, right? –TIAA-CREF
“A correction occurs when a market index declines at least 10% from its peak. The S&P 500 Index, which hit an all-time high of 2,130 on May 21, had fallen to 1,868 on August 25, a 12% drop over the course of three months.”
Four interesting posts (from last week, so no mention of Monday’s wild day for US equities) to share covering domestic and international issues.
Wrestling with the Costs of Crumbling Infrastructure –Lord Abbett
“There is some talk that oil price declines have made room for a gasoline tax hike, but otherwise, infrastructure spending will remain hostage to the many other demands already straining federal, state, and local budgets,” said Milton Ezrati.
Macro Matters: China’s Currency Move –PIMCO
If China were merely to embark on aggressive currency depreciation without further domestic monetary easing and market reforms, this should be seen as bad news. Chinese exporters would gain a competitive advantage…
3 Things the European Investment-Grade Fixed Income Team Talked About Last Week –Pioneer (interesting post; rough title) –
“Perhaps the reason that global bonds initially rallied was that the Renminbi (RMB) move was seen as a global deflationary move. A weaker RMB (and other Asian currencies) should mean weaker commodity prices…”
Thoughts from the China Beige Book –WisdomTree
“… the Chinese currency appreciated by over 20%. The rise in the dollar resulted in the yuan becoming far more expensive compared to its Asian neighbors, which corroded its competitiveness. Given this steep rise in the value of the yuan, the 3% devaluation is rather small by comparison.”
Though the week’s financial news focused on the Chinese government devaluing the yuan, we liked three posts on highly different topics.
How to Invest for the Greater Good –BlackRock
“Impact investing targets a very clear social or environmental outcome that is measurable and transparent. Instead of just refraining from investing in something that doesn’t align with your beliefs, you’re focusing on companies that are operating responsibly and having a positive impact on the world.”
Top 5 Smart Beta FAQs –BlackRock
“Transparency is a defining attribute of smart beta strategies.”
How U.S.-Centric is Your U.S. Equity Exposure? –WisdomTree
“If you believe the U.S. dollar trend is set to reverse, such an environment would favor U.S. exporters and the WisdomTree Weak Dollar U.S. Equity Index”
