Insights / Blogs

Insights / Blogs

On The Lookout

James Swanson, Chief Investment Strategist, helps readers make sense of the markets by sharing what he learns along the way.

August 14, 2015

Thinking Twice About Profits, Currency and Opportunity Risk

Markets may be focused on China’s devaluation, but I’m still paying attention to US profits.
A commodity-driven earnings recession has plagued capital-heavy sectors like energy and materials.
I think missing out on a renewed market advance could be the biggest risk for equity investors.

While the markets have been fixated recently on China’s currency moves, I have other things on my mind. I’ve been thinking that it has now been six years since the end of the last recession — making this expansion one year older than the average life span of business cycles after World War II. And for most of these six years, the United States has been on an impressive ride, both for company profits and the equity markets.

July 15, 2015

Our World After Greece

As Greece moves out of the headlines, what does the rest of the world look like?
Crude oil prices, still well off last year's highs, should be a boon to global growth.
I expect this cycle to progress as revenues and profits at large multinationals gain traction.

For months now, the Greek debt repayment saga has been front-page news. At long last, an agreement has been reached between the country and its creditors. Efforts to meet the conditions of this bailout deal will play out over the next few days and weeks, with economic and political consequences in Greece and across Europe.

If the past is any guide, this issue will probably resurface again, reminding investors everywhere of the long-running battle between creditors and over-indebted governments. But until then, we can get back to the business of understanding the economic cycle.

June 17, 2015

Still in Midcycle at Midyear

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With steady growth in US jobs — and now wages — boosting consumer confidence and pushing the business cycle forward, there’s more talk of the US Federal Reserve raising rates. Chief Investment Strategist James Swanson explains why starting to tighten gradually — say, 25 basis points in September — might not be so bad for the US economy or investors. Recorded June 2015.

For more market commentary from MFS, visit our YouTube channel.             

May 20, 2015

Let's Hear It For Mediocrity!

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While Chief Investment Strategist James Swanson is no proponent of mediocrity, he does think a slower pace of economic growth could help prolong the US business cycle, and that would be good news for company profits and equity markets. Recorded May 2015.

For more market commentary from MFS, visit our YouTube channel

April 21, 2015

Earnings Season's Greetings

Earnings have taken a hit from a combination of lower oil prices and a higher US dollar.
But similar episodes in history suggest that we may still have some clear sailing ahead.
Economic activity and equity valuations tend to pick up in the first phases of Fed rate cycles.

As earnings season commences for the first quarter, we’ve been thinking about the current slowdown and the interest rate trajectory — with the US Federal Reserve’s first hike still likely to occur later in 2015. What does this backdrop mean for equity valuations and earnings?