NAPERVILLE, Illinois and LONDON, Oct. 15, 2012 /PRNewswire/ -- Calamos Investments®*, a globally diversified investment management firm, released its Global Economic Review and Outlook. The outlook provides the firm's views on the current economic environment and discusses factors that may affect the global markets and investing opportunities and risks. Calamos invites you to read the entire October 2012 Global Economic Review and Outlook at Calamos.com/Outlook. Topics include the following:
- Financial markets will likely remain choppy due to elevated levels of global political uncertainty. The U.S. presidential election, the fiscal cliff and tension in the euro zone should contribute to vacillations in financial markets.
- The U.S. economy looks set to maintain a slow growth track. Even with recent gains, job levels remain discouraging; and government debt levels are troublingly high. Nonetheless, we are seeing more favorable indicators, including consumer resiliency, healthy corporate balance sheets and profits, improvements in the auto industry and signs of stabilization in the housing market.
- China and other emerging markets can continue to make significant contributions to global growth. While not discounting the slowdown that has occurred thus far in China, growth is continuing at a respectable clip, in absolute terms and relative to other countries. The secular trends related to China and other emerging markets, such as the rise in consumer income and increased middle class consumption, can help emerging markets weather a period of slower growth.
- The euro zone faces significant headwinds. ECB intervention quells many near-term solvency issues but the structural issues are more intractable. Volatility should remain high as the situation in Spain looks increasingly dire and as stronger euro members grow frustrated with paying for the debts of less solvent neighbors.
- A stronger economic recovery will likely remain elusive without increased commitment to pro-growth policies and more appropriate levels of regulation. Despite massive liquidity injections, the velocity of money has collapsed, and the sensitivity of equities to Fed intervention has decreased. Facing a raft of regulations, banks are largely unwilling to lend to small businesses—the engine of economic growth. Meanwhile, instead of hiring and making capital expenditures, large corporations are sitting on large piles of cash as they wait for clarity on regulations and taxes.
- Global secular themes provide growth opportunities. Secular themes can continue to provide a "wind in the sails" to companies around the world, even if economic growth slows globally. The most important of these trends relate to consumer strength in emerging markets, global demand for technology innovations, and infrastructure build out.
- Overall, equities remain the most compelling asset class. Valuations remain attractive, especially those of growth-oriented equities. The spread between the average earnings yield of the companies in the S&P 500 Index and the 10-year U.S. Treasury further supports the case for equities. While interest rates are likely to remain low for the near term, inflation is still a risk—and one that equities can provide a hedge against.
- Mid-grade corporate issues maintain their appeal. In a low-rate environment, opportunities in the government bond market have greatly diminished, but the most speculative credits may not offer appropriate compensation for their attendant risks. For income-oriented investors, mid-grade corporate credits may provide attractive risk/reward characteristics.
- Bull markets do not announce themselves, and market turns can only be seen clearly in hindsight. This is an environment that requires patience and long-term, global perspective. An understanding of the co-integration of global economies is essential, as is active fundamental research.
Calamos Investments is a globally diversified investment firm serving the needs of institutional and individual investors for 35 years. The company's clients include public and private pensions, foundations, endowments, corporations, financial advisors, families and individuals from around the world who have entrusted the firm with $34.3 billion in total assets, which includes assets under management as well as $1.1 billion for which the company provides through its subsidiaries model portfolio design and oversight, as of 30 September 2012.
Calamos offers a range of global investment solutions—equity, fixed-income, convertible and alternatives —to work with clients' multi-asset allocation frameworks and achieve the goals of their investment programs.
Calamos serves professional/sophisticated investors around the world through Calamos Global Funds PLC (UCITS), distributed by Calamos Investments LLP, London, United Kingdom.
For more information, please visit Calamos.com or call 800.582.6959.
This material is distributed for informational purposes only.
The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Information contained herein is for informational purposes only and should not be considered investment advice.
*Calamos Investments LLC, referred to herein as Calamos Investments®, is a financial services company offering such services through its subsidiaries: Calamos Advisors LLC, Calamos Wealth Management LLC, Calamos Investments LLP and Calamos Financial Services LLC.
SOURCE Calamos Advisors LLC