Archive for 'April 2014'

    Optimistic Fed Tapers Again

    April 30, 2014 2:40 PM by Zane Brown

    Policymakers cited a recent pickup in economic growth as they announced a further $10 billion reduction in monthly bond purchases.

    The taper marches on. At the conclusion of its policy meeting on April 29–30, the Federal Reserve’s policy-setting arm, the Federal Open Market Committee (FOMC), announced a further $10 billion reduction, from $55 billion to $45 billion, in monthly purchases of longer-dated Treasuries and mortgage-related securities. For those of you keeping score, this marks the fourth such reduction since the start of tapering was announced in December 2013. Recent weakness in housing and a disappointing first-quarter gross domestic product (GDP) announcement did not slow the Fed’s apparent march toward an end to quantitative easing before year-end. (Indeed, the FOMC sounded positively optimistic in its post-meeting statement, saying that “growth in economic activity has picked up recently,” and that household spending “appears to be rising more quickly.”)

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    High-Frequency Trading: A Little Less Frenzy, Please

    April 24, 2014 10:05 AM by Ted Oberhaus

    High-frequency trading may be the villain du jour when it comes to selling books, but we’ve had some of our best minds on the subject since 1999. 

    A Trader's Perspective

    Can a trading strategy that involves holding stocks for milliseconds to minutes, or that has no intrinsic interest in the companies behind the stocks, actually be considered investing? Few would argue that it is. In fact, most would say it is pure speculation. Does that make it bad? Actually, high-frequency trading (HFT) is a complex issue that deserves more thoughtful consideration than the recent media frenzy about HFT allows. 

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    Why Europe May Attract More Investor Attention

    April 23, 2014 2:01 PM by Harold E. Sharon

    After years of lagging the global economic recovery, Europe is showing signs that it can stave off deflation and rekindle meaningful growth.

    Harold Sharon, Lord Abbett Partner and International Strategist

    While other major economies have recovered at varying rates from the global financial crisis, the eurozone has been the clear laggard. For Europe, stimulus came late, was very hard to coordinate in a timely way, and was diluted over time.  The upshot is that Europe, if policymakers can agree, has more room to accommodate further measures, such as central bank support, fiscal reforms, and structural economic reforms.  If so, there may be more reaction still ahead in Europe that can support the capital markets, and perhaps this warrants more investor attention for that reason alone.

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    Do Biotechs Have More Upside?

    April 22, 2014 11:56 AM by Lord Abbett Editorial Staff

    Lord Abbett has identified three encouraging trends for the sector.

    Forty-three years after President Richard Nixon launched a national “war on cancer,” millions have died, millions have extended their lives with new and improved treatments, and billions of dollars have been made by investors in biotechnology and pharmaceutical companies on the front lines.  A case in point is the NYSE Arca Biotechnology Index (BTK), which has a high concentration of companies with cancer compounds in various stages of development, is up 295% in the five years through April 17, 2014.

    Is all the good news priced into biotech stocks?  Or do the long-term fundamentals justify continued bullishness?  

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    Welcome to the Machines

    April 10, 2014 11:45 AM by Lord Abbett Editorial Staff

    Here's what Lord Abbett experts are saying about the explosive growth of robotics.

    Google's purchase of eight robotics companies in 2013 and Amazon's demonstration of delivery drones have garnered tremendous publicity, but the trend toward automation has accelerated all over the world.  According to the International Federation of Robotics (IFR), sales of industrial robots have soared since the global economic recovery began in 2009. "Robotics is one of a few technologies that has the potential to have an impact that is as transformative as the Internet," says the Robotics Virtual Organization ("Robotics-VO”), a consortium of major robotics manufacturers and academics sponsored by the National Science Foundation.

    While robots have entered the workforce in increasing numbers, they're also fast becoming part of the investment conversation.

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    Join the Conversation

    April 5, 2014 10:30 AM by Lord Abbett Editorial Staff

    Welcome to our new blog. Think of it as having a seat on the Idea Exchange.

    What's behind the recent action in equities and fixed income? Which developments in Washington--and other world capitals--could influence portfolio performance? How can investors capitalize on long-term market trends? We'll attempt to answer these questions, and more, in our new blog,The Investment Conversation. 

    What can you expect from this new endeavor?

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    The Labor Market's March Muddle

    April 5, 2014 10:08 AM by Milton Ezrati

    Mixed data in the monthly jobs report, including below-forecast payroll growth, underscore the sluggish recovery.

    At best, the jobs report for March is a mixed bag. On April 4, the Labor Department reported that nonfarm payrolls expanded 192,000 for the month, but a bounce was expected as a kind of a catchup for the weather-depressed rates of hiring in the three prior months. Accordingly, the consensus view of economists had expected 200,000 new jobs.  On that basis, this figure is mildly disappointing.

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    Emerging Market Corporate Debt: Two Telling Trends

    April 5, 2014 9:15 AM by Jerald M. Lanzotti, CFA

    Emerging economies continue to outpace their developed peers, while the market for EM corporate debt has expanded.

    As I highlighted in my recent article on, emerging market economies are growing and becoming a bigger slice of the overall global pie, representing 36% of global gross domestic product (GDP) in the second quarter of 2013, up from only about 20% 10 years ago. Half of global consumption will come from EMs by 2025, according to J.P. Morgan. According to J.P. Morgan, GDP growth be 4.6% in emerging markets for 2013, versus 1.0% in developed markets. But economic growth tells only part of the story.

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    Munis: The High-Yield Evolution

    April 5, 2014 8:45 AM by Daniel S. Solender, CFA

    Among the key changes in the high-yield muni market in recent years: More billion-dollar issuers. 

    The high-yield municipal bond market has been on the rebound in 2014 after a rough 2013. In fact, momentum has picked up in 2014, with a year-to-date return of 5.4% for the Barclays High Yield Municipal Bond Index  (through February 28), versus a gain of 3.1% for the broader Barclays Municipal Bond Index.  Investors who may be thinking of kicking the tires of the high-yield muni market should be aware that it has changed greatly in the last several years. In my latest Municipal Matters column, I've identified six key developments in this category since 2007, just before the start of the financial crisis. I'll spotlight one of the biggest changes here.

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