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2018 Long-Term Capital Market Assumptions

By John Bilton, Dr. David Kelly
The 2018 edition of J.P. Morgan Asset Management's Long-Term Capital Market Assumptions draws on the best thinking of our experienced investment professionals worldwide. Refined and expanded over 22 years, our in-depth, proprietary process provides 10- to 15-year risk and return projections for more than 50 strategy and asset classes.
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Factor Views 4Q 2017

By Yazann Romahi
Themes from the quarterly Quantitative Beta Research Summit.
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Emerging market debt strategy : Follow the growth

By Pierre-Yves Bareau
Emerging market (EM) debt continues to be in a sweet spot, supported by stagnating global inflation, supportive developed market (DM) growth pick-up, strong fundamentals and few external risks.
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Goldilocks and the three risks

By George Iwanicki
Emerging markets are in the early phase of their recovery cycle. When comparing cycle-adjusted P/E multiples, emerging market equity ranks as the cheapest segment of the global equity market.
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Investing in a rising rate environment

By Alex Dryden
Alex Dryden discusses the implications of the Fed raising interest rates over the next two years, the reduction in the balance sheet and how investors can prepare
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Eye on the Market: Annual Energy Edition

By Michael Cembalest
Michael Cembalest provides an overview of key topics covered in his 2017 Energy Publication and their potential impact on global markets.
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Political uncertainty and market turmoil in Brazil

By Gabriela Santos
After a report was published late Wednesday night implicating interim President Temer in a bribery scandal related to Operation Car Wash, opposition politicians called for his impeachment or resignation, resulting in Brazilian markets opening starkly down on Wednesday.
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Political risk in Europe has fallen

By Michael Bell, Vincent Juvyns, Tilmann Galler
2017 was billed as a year of potential political turmoil for the eurozone. Investors feared that elections in the Netherlands, France and Germany could lead to a victory for an anti-euro party plunging the very future of the eurozone into doubt
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Defining reflation, gauging momentum

By George Iwanicki
We believe that global reflation is predominantly a growth (rather than inflation) acceleration story. Emerging markets are broadly participating, and importantly the EM earnings cycle has finally turned positive. Risks to this view remain— China growth peaking, a possible "last phase" of USD strength, or a capping of positive earnings estimate revisions (given higher implied growth in current projections). Still, we are optimistic that the turn in momentum can drive additional performance for the asset class, particularly given that valuations are not yet at levels that challenge this improved momentum backdrop.
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The two-horse race that the polls predicted

By Vincent Juvyns, Stephanie Flanders
The 2017 French presidential election has been the most uncertain in the history of the Fifth Republic. But on this occasion, the opinion polls turned out to be right, with centrist Emmanuel Macron and Front National leader, Marine le Pen, both proceeding to the second round.
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May calls for June election

Theresa May announced her intention to call an early general election for Thursday 8 June. She made it clear that this election would be about her approach to Brexit, saying current divisions within Westminster jeopardise the UK’s negotiating position with the EU, which she wants to strengthen.
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Emerging Market Debt Q2 2017: Reflation takes root

By Pierre-Yves Bareau
Given the risks posed by protectionism, we are more cautious on open economies and those more dependent on external funding. Overall, we have shifted our focus from market beta to carry this quarter, coming off of solid first quarter performance, tighter valuations and the little market premium attached to the risks we have identified. We place an emphasis on short-end names and those idiosyncratic stories that we identify as having positive event skew.
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The European political project at a crossroads?

By Vincent Juvyns, Tilmann Galler, Maria Paola Toschi
Twenty-five years after the signing of the Maastricht treaty, the European political landscape is more fragmented and polarised than ever, in a year when key member states are facing general elections.
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New challenges for Emerging Markets: Risk or opportunity?

By George Iwanicki
The unexpected election of Donald Trump as U.S. President sparked dramatic change across the global investing landscape - and Emerging Markets were hardly immune.
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Entering the reflation era

By Pierre-Yves Bareau
We are entering a new investment paradigm: the era of "lower for longer" and "search for yield" has now been replaced by an era shaped by higher growth, inflation and rates.
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Eye on the Market Outlook 2017 Overview: True Believers

By Michael Cembalest
Michael Cembalest, Chairman of Market & Investment Strategy, provides an overview of key topics covered in his 2017 Eye on the Market Outlook and their potential impact on global markets.
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An analysis of productivity

By Dr. David Kelly
What it is productivity, how do you analyze it and what drives it? With slower global GDP growth pushing down expected equity and fixed income market returns, our experts discuss trends and measures that could help boost global economies.
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Living on borrowed time: Understanding global debt and what it means for investing 

By Samantha Azzarello, Gabriela Santos, Hannah Anderson
Investors around the world are worried about elevated global debt levels. While there may be more pressing day-to-day market matters, debt remains a persistent underlying concern.
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On Brexit

By Michael Cembalest
On Brexit, the week before the vote. Michael Cembalest discusses his view that many articles overstate Brexit risks and consequences for the UK, and/or overstate the vote’s impact on political movements and economic malaise in the Eurozone that predate it by months and years. Here are some of his thoughts on issues that have been raised over the last few weeks.
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China at the crossroads

China’s economic transition from investment-driven growth towards a more sustainable market-based model focused on services and consumption appears to be well underway. However, achieving a smooth transition is being made more challenging by several structural obstacles.

In this paper, we look at some of these structural issues, focusing on how excessive levels of leverage and industrial overcapacity have the potential to derail China’s economic transition. We also examine how China’s capital account is coming under pressure as the country embarks on a programme to liberalise its exchange rate regime.

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A case for Europe

By Vincent Juvyns, Alex Dryden

Market confidence has been badly hurt in the opening weeks of the year as investors worry about the possibility of a global recession. We believe these fears are probably overdone and investors should take a step back and look at the big picture, particularly in the eurozone.

The eurozone saw moderate economic growth in 2015 of around 1.5%, and we see several reasons why this momentum should be sustained this year, including further support from the European Central Bank (ECB), more supportive fiscal policy and cheaper energy.

Some European sectors and companies will be negatively affected by weakness in global trade and the slowdown in China and other emerging markets. On balance, however, we believe that the domestic drivers for eurozone growth can offset these negatives. In this note we briefly outline those positive forces and restate the case for active investors to retain their exposure to regional risk assets.

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A transition with Chinese characteristics

By Gabriela Santos
  • The Chinese economy is slowing as it makes the transition from investment-and-industry-led growth to an economy more dependent upon consumption and services. This transition is both needed and an evolving reality.
  • Although China has been engineering a smooth transition, the risks of a policy mistake have increased. The Chinese government, however, has many tools to manage this transition.
  • Internationalizing China’s financial system has important consequences for global financial markets.
  • A slower rate of growth in China is a headwind for emerging markets, but not necessarily for developed markets.
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Eye On the Market 2016 Outlook - Key Topics

By Michael Cembalest
Michael Cembalest, Chairman of Market and Investment Strategy, touches on topics including: the global banking system, oil markets, the credit risk of US states and credit market liquidity.
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Eye On the Market 2016 Outlook - Planet of the Aches

By Michael Cembalest
Michael Cembalest, Chairman of Market and Investment Strategy, discusses the aches and pains constraining growth around the world, the severity of these ailments, and the degree of contagion from emerging to developed economies.
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Investment Professionals
Dr. David Kelly
Chief Global Strategist and Head of Global Market Insights Strategy
Michael Cembalest
Chairman of Market and Investment Strategy

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