TORONTO — Manulife Asset Management today released its latest Global Intelligence report, summarizing the views of the firm’s economic and investment teams in identifying the main drivers of the global economy and implications for investors over the near term. Entitled “Global Intelligence Interim Outlook: Spring 2017” the report is accompanied online by a video; both are available at
“Global Intelligence Interim Outlook: Spring 2017” includes individual views from Manulife Asset Management’s investment and economic teams on the ground in the U.S., Canada, Europe, and in markets across Asia, addressing the outlook for a range of investment areas and asset classes, including fixed income, equities, commodities and asset allocation.
Among the economic insights covered in the report:
Megan Greene, Chief Economist, introduces her Global Economic Outlook:
- On the U.S.: “Investors have become much more bullish about growth, inflation and rate projections in both the United States and Europe. In our view, we will see a moderate uptick in these indicators, but in the absence of a fundamental boost in long-term productivity and potential growth, any quick sugar hit stimulus measures to the economy will likely fizzle out. While investors seem to have the direction of these indicators correct, we think the magnitude and timing might be off.”
- On Europe: “Political uncertainty continues to pose the greatest risk to the economic recovery in Europe. The biggest potential political risk is the French election, in which the right-wing, populist candidate Marine Le Pen has been leading the polls. However, we would attach only a 30 percent probability to Ms. Le Pen winning.”
Robert Boyda, Co-Head of Asset Allocation, outlines his current views:
- On the U.S.: “We put a relatively high probability on the risk of a short-term, garden variety 8-10 percent U.S. equity market correction. There are plenty of places to find values elsewhere in the world, particularly in areas that have been analytically abandoned.”
- The optimism we saw post-U.S. election, which translated into rising business, consumer and investor confidence, would suggest that the second half will be much better than the first half. However, the rush of excitement needs to face the reality of difficult budget decisions.
- On the rest of the world: Investors looking beyond the U.S. borders will find a long list of things to like – equity market valuations are not as onerously high; leading economic indicators like the Purchasing Managers Indexes (PMIs) for goods and services in Europe are steady at expansionary levels; and China, while growth is slowing, does not seem to present a near-term systemic risk of a much-feared financial Armageddon.”
Other views expressed in Global Intelligence include those of Sandy Sanders, Senior Portfolio Manager, US Equities; David Hussey, Head of Europe, Australasia & Far East Equities; Howard Greene, Head of US Fixed Income; and Patrick Blais, Senior Portfolio Manager, Canadian Equities.
Some consistent themes resound across asset classes and region:
- More visibility on policy direction from the new U.S. administration would be helpful; the risk of policy missteps remains.
- Investors should pay attention to the upcoming French election, which could spark volatility.
- Generally, U.S. financials widely expected to do well in a rising rate environment.
About Manulife Asset Management
Manulife Asset Management is the global asset management arm of Manulife, providing comprehensive asset management solutions for investors. This investment expertise extends across a broad range of public and private asset classes, as well as asset allocation solutions. As at December 31, 2016, assets under management for Manulife Asset Management were approximately C$461 billion (US$343 billion, GBP£278 billion, EUR€325 billion).
Manulife Asset Management’s public markets units have investment expertise across a broad range of asset classes including public equity and fixed income, and asset allocation strategies. Offices with full investment capabilities are located in the United States, Canada, the United Kingdom, Japan, Hong Kong, Singapore, Taiwan, Indonesia, Thailand, Vietnam, Malaysia, and the Philippines. In addition, Manulife Asset Management has a joint venture asset management business in China, Manulife TEDA. The public markets units of Manulife Asset Management also provide investment management services to affiliates' retail clients through product offerings of Manulife and John Hancock. John Hancock Asset Management is a division of Manulife Asset Management.
Additional information about Manulife Asset Management may be found at ManulifeAM.com.
Manulife Financial Corporation is a leading international financial services group that helps people achieve their dreams and aspirations by putting customers' needs first and providing the right advice and solutions. We operate as John Hancock in the United States and Manulife elsewhere. We provide financial advice, insurance, as well as wealth and asset management solutions for individuals, groups and institutions. At the end of 2016, we had approximately 35,000 employees, 70,000 agents, and thousands of distribution partners, serving more than 22 million customers. At the end of 2016, we had $977 billion (US$728 billion) in assets under management and administration, and in the previous 12 months we made almost $26 billion in payments to our customers. Our principal operations are in Asia, Canada and the United States where we have served customers for more than 100 years. With our global headquarters in Toronto, Canada, we trade as 'MFC' on the Toronto, New York, and the Philippine stock exchanges and under '945' in Hong Kong.