Besides the masses of government employees that would be put on furlough if a U.S. federal government shutdown occurs, and the potential market volatility caused by uncertainty over both the budget and over healthcare reform, one of the big problems of a federal government shutdown is that there’s a lot of vital economic data that is produced by…you guessed it, the federal government. If a shutdown goes into effect, the U.S. government will shut down all “nonessential” functions. This would include the economists, statisticians, and data processors of the Labor Department’s Bureau of Labor Statistics. This is the organization that puts out the crucial monthly nonfarm payrolls report, which details the number of new nonfarm jobs and an estimate for the current unemployment rate.
The September report is currently scheduled to be released the morning of Friday, October 4th…that is, if the government is still running on Friday. Read more
At their September meeting, the Federal Reserve surprised markets by maintaining their program of monthly Treasury and agency MBS purchases. So the taper is again “on hold.” Our economist Robin Anderson looks at the Fed’s decision and examines what it means for the markets.
There’s an important election coming up on 22 September. Germany goes to the polls and everyone’s expecting current Chancellor, Angela Merkel, to be reinstated. If you didn’t catch my previous post, click here to get a quick primer on the election and the parties involved. Regardless of where the votes go later this month, there are several policy steps that Germany will have to address in 2014 regarding its European neighbors: bonds, bailouts, and banking unions. Read more
Five years ago, my firm, CREATE Research, first partnered with Principal Global Investors to examine trends within the asset-management industry. Many things have changed since 2009; one of the biggest changes has been how defined benefit and defined contribution plans have altered their approach to asset-allocation strategies. The infographic below brilliantly details how investor behaviors have shifted from “wants” to “needs” over the past five years. I encourage you to download the entire survey, entitled “Asset Allocation Leaders, Laggards, and Newcomers: 2009 – 2013.” You can read the full trends analysis and other research at create.principalglobal.com.
169,000 new jobs in August. Sounds pretty good…unless you were expecting 180,000. Combine that with June and July gains getting revised down by 16,000 and 58,000, respectively…and you get something that falls somewhere between ‘super tepid’ and ‘lackluster.’ So, when the Federal Reserve meets next week, what will they think about jobs numbers and how will that affect their tendency toward tapering?
Year-to-date average monthly payroll gains sit at 180,250. That’s lower than the average in 2012, and more importantly, it’s lower than the rate of 200,000 that some FOMC members would prefer to see before cutting the pace of bond purchases. Of the combined June-July revisions (-74,000), an unusually high amount (over half) came from local government – mostly education. Read more
If you haven’t heard mention of it in the news, or read about it in the papers or your portfolio manager’s commentary, there’s an election coming up in Germany. It’s important too! The outcome of this election has implications well beyond Germany, and well beyond Europe. In this post, we’ll look over the basics of the election, so that you’ll know how to make sense of the results when they come later this month.
First, why is this election so important? There are a couple of main reasons. Germany is one of the main centres of gravity for the European Union. Their export-driven economy is the engine driving a nascent EU recovery, and Germany’s ability to continue churning out that growth is highly interrelated with the domestic policy agenda of the government. Secondly, Germany’s one of the big wheels in the EU and almost nothing gets done without its approval. Read more
Preferences change. Tastes develop over time. You probably appreciate more and different foods than you did when you were a child. You change your diet to meet your needs – foods to benefit your heart, your cholesterol, your weight. You may even have a special menu designed specifically for you by a doctor or dietitian The investment industry is seeing a marked shift towards an era where this kind of evolution and customization will be key to success.
For years, investment managers have taken alpha to mean “beating a benchmark.” Alpha, as traditionally defined, is the excess return earned above a market index through active management. The manager was given a target and expected to beat it. That flavor of alpha is now giving way to solutions alpha. Read more
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