A collection of sage investment executives gathered at the Milken Institute Global Conference this week to discuss the state of financial markets. Here is some of the insight shared by panelists during the Reading the Tea Leaves: Where are Markets Headed? session.
Michael Cembalest, Chairman of Market and Investment Strategy, J.P. Morgan Asset Management
Cembalest says he is watching four issues closely: two market issues and two policy issues. Citing the remarkable correlation between manufacturing surveys and corporate profits that follow three to six months later, Cembalest said, “The next couple quarters of business surveys and corporate-profits growth are probably more important than they have been in a while.”
On the policy side, Cembalest shared insight on brewing energy and housing matters. “It would be a huge mistake to accelerate the pace of [liquefied natural gas] exports. … There is a huge multiplier-effect benefit from the U.S. having electricity prices for homes and businesses that are 50% to 60% of what the rest of the world pays. (read more…)
A roundup of financial news from Day Two of the Milken Institute Global Conference in Beverly Hills, Calif.
Trouble brewing in the credit markets?: “All the danger signs are there of a future crisis.” That is how Apollo Global Management co-founder Marc Rowan summed up his view of the credit markets during the Credit Markets: What’s Next? panel. “We’re back to doing exactly the same things that were done in the credit markets during the crisis. Our job is to step wisely and try to avoid that.” However, David Warren, chief investment officer at Brevan Howard Credit Funds, sees things quite differently. Because of reforms like Dodd-Frank and Basel III are pushing the big banks out of some sectors, Warren says the next 10 years will be a “golden era” for credit investing.
A roundup of financial news from Day One of the Milken Institute Global Conference in Beverly Hills, Calif.
Central banks still run the show: The past, present and future actions of the world’s central banks drew scrutiny during a panel about prospects for the global economy. Alan Howard, co-founder of Brevan Howard, said the increased regulatory powers of the European Central Bank will be a game-changer as will the size and targeting of the quantitative easing he expects the ECB to manage. Alexander Friedman, Global Chief Investment Officer at UBS said the untold story of last five years is how the policies of the Federal Reserve have contributed to income inequality politicians and others have taken to lamenting.
Dodd dishes on Dodd-Frank fails: Former Sen. Christopher Dodd says one of his big regrets about the architecture of the Dodd-Frank Wall Street Reform and Consumer Protection Act is that it didn’t call for self-funding of the Securities & Exchange Commission. (read more…)
A collection of stories from SmartBrief publications and around the web…
Regulating trust: Trust. It is a buzzword in the wealth management industry. Advisers and Wall Street leaders say the industry is founded on serving clients and maintaining their trust. But in light of Flash Boys, regulators are pondering whether or not they have to ensure brokers can actually be … you know … trusted to make the right choices for their clients. This really should be tied to the fiduciary standard reform effort allegedly underway at the SEC and the Department of Labor. After all, if regulators are going to mandate that advisers steer clients toward products that are best for the client, shouldn’t the trading of those products also be conducted in the manner that is best for the client?
Here is a tip for brokers when they are trying to determine which exchange or private venue to route their orders: Anytime someone is offering to pay you to provide a service for which you should be paying them, something is probably amiss. (read more…)
Three economists offer their outlook on construction activity and construction spending for the rest of this year, and beyond.
Bernard Markstein, chief economist at Reed Construction Data, Ken Simonson, chief economist at the Associated General Contractors of America and Kermit Baker, chief economist at the American Institute of Architects were the featured speakers at the April 17 webinar “2014: Emerging Opportunities for Construction.” They each mapped out what they’ve seen this year and where they think the AEC industry is headed.
Where we are now: Good news
Baker noted that since 2008 the country’s economy has been on a roller coaster, but he says it is starting to become more stable, which makes a “good foundation for construction recovery.” Markstein said there was a fair amount of consensus among economists that the construction sector “appears to be improving somewhat,” but as Simonson observed, that improvement is “uneven.” Simonson cited the strength of the industry in the shale-play areas and the work at various ports that are upgrading in anticipation of a widened Panama Canal, but also noted that construction employment in the country is only up 2.6% from a year ago. (read more…)