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Russ Koesterich

Like a villain that dies at the end of a horror movie only to be resurrected in its sequel, the threat of Greek political instability is once again stalking financial markets. On Monday, Greek Prime Minister Antonis Samaras surprised everyone by moving up the date for a parliamentary vote on a new president, a largely ceremonial position. It is unclear whether Samaras’s existing coalition with 155 seats would be able to obtain a supermajority—180 out of 300 lawmakers—to pass that vote. Should they fail, this would precipitate a snap election. Based on recent polls, the likely winner of that election would be the far-left party, Syriza, who would probably be forced to govern as part of an unstable coalition. The news unnerved investors, sending Greek stocks and bonds tumbling and in turn raising the question: Are we in for another round of European led volatility? Here is my read. [click to continue…]

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Investors in Brazil have had the dubious pleasure of undergoing one of the more stomach-churning rides in 2014. In U.S.-dollar terms, Brazilian equities rallied roughly 40% from their spring lows through early September, before surrendering all of those gains following a disappointing election outcome. Although the sell-off of the past few months has pummeled valuations, bargain investors might be better off looking elsewhere for a more promising emerging-market opportunity. Here are the reasons why: [click to continue…]

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A confluence of factors helped U.S. equities rebound more than 12% from their October low, pushing valuations to their highest level since 2009. Besides extraordinary foreign central bank monetary stimulus (with the latest shot of adrenaline coming from China) and a fresh wave of mergers and acquisitions, I discuss in my new weekly commentary how […]

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By most measures, the U.S. economy is improving. Recent economic reports revealed two encouraging facts: The United States just experienced the best back-to-back quarters of growth since 2003 and fewer Americans are filing for unemployment benefits than at any time in the past 14 years.

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As the end of 2014 approaches, a few key themes are becoming evident: an unexpected drop in interest rates, the relative strength of the U.S. economy and the rally in the U.S. dollar. The dollar, as measured by the U.S. Dollar Index, has rallied roughly 10% from its spring lows and now stands at the […]

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Stocks advanced again last week, driven by an improving economic picture and an encouraging earnings season by U.S. companies.But a stronger economy comes with a flip side: less need for monetary stimulus. Moreover, as I discuss in my new weekly commentary, major central banks are now diverging in their monetary policies, a dynamic we saw […]

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If you are in or near retirement, you know it’s been hard earning income on your investments in recent years. Unfortunately, I don’t see it getting much easier in the next few years. I expect the 10-year Treasury yield to finish the year between 2.5% and 2.75% and to trend higher to 3% over the intermediate […]

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As of Monday’s close, the S&P 500 was down roughly 6.5% year-to-date, while the broader global MSCI ACWI Index was down around 9% in dollar terms. Meanwhile, other segments of the market are already in correction territory (down 10% or more year-to-date). Emerging markets were off 10% at the lows, U.S. small caps down 13% […]

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Bond market and currency volatility have been on the rise lately, leaving many investors wondering what they should do in response. My take: I’ve been advocating for a while that investors should rethink their fixed income exposure, given that bond investing today is very different than it was in the past. It’s never accurate to […]

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As I’ve noted before, a major trend in today’s global economy is increasing divergence. Different regions and countries continue to experience diverging growth and monetary policies, and performance among market segments continues to diverge too. As I write in my new weekly commentary, World’s Apart? Investing in an Era of Divergence, this trend is likely […]

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As last week’s non-farm payroll report illustrated, the recovery – both in and outside the United States – remains a grudging, disappointing one. That said, it’s still a recovery, albeit an uneven one. Economic growth is strengthening in some parts of the world, while it’s slipping in others. In other words, as I mentioned in […]

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In recent months, I’ve been advocating that investors focus on those market segments that are more reasonably priced with an emphasis on certain cyclical sectors. Six years after the 2008 financial crisis, there are a few cyclical sectors that seem to offer particularly good value. One is the financials sector.

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