|By PR Newswire||
|February 4, 2014 08:30 AM EST||
SAN FRANCISCO, Feb. 4, 2014 /PRNewswire/ -- As the economy shows positive signs of an active recovery for the first time in six years and all eyes are on the Federal Reserve and Congress, the Investment Advisory & Management team (IA&M) of Bank of the West's Wealth Management Group shared its investment commentary for 2014. The IA&M team leads portfolio management for the Bank's affluent and high net worth clients.
The expectation is that the U.S. economy will continue its steady growth while international markets, specifically Europe, continue to break through their slumps. Meanwhile, the spotlight of pessimism continues to center on emerging market countries, especially China, despite above average growth versus developed markets.
The IA&M outlined its outlook for the equity, fixed income and alternative investment classes, in addition to potential disruptors which investors will need to navigate in 2014.
The IA&M team expects that global equity markets will outpace bonds and alternatives in 2014. Momentum in the U.S. equity market can continue if companies see improved top-line growth as a result of pent-up demand, realization that interest rates will eventually rise, diminished fiscal drag and more balanced global growth. The team does not see the equity market in a bubble or overvalued as long as revenues and earnings continue to grow, with S&P earnings estimated to grow at 6-8 percent in 2014.
Additionally, the rate of increase in capital spending could nearly double in 2014. Gains in capital spending could positively impact companies in the technology and industrial sectors. Companies will actually begin deploying cash once their managements have enough confidence that a global economic rebound will be sustainable, and after 6 years this seems to gradually be coming to fruition.
U.S. equities are on solid footing, but will have more difficulty extending gains beyond earnings growth rates due to being further along in the recovery cycle than other major countries. Internationally, the team favors developed international equity market prospects; which are positioned for continued improvement as Europe transitions from recession to recovery. The EU region's equities could be poised for an intermediate breakout if fiscal drag continues to dissipate and growth rates accelerate.
"The global growth forecasted needs to materialize for equity markets to continue to experience gains at a strong pace," said Wade Balliet, CFA and co-head of the IA&M team. "Europe is the key component of the global growth story this year as the global economy needs stronger demand out of the region to realize the more optimistic predictions for growth."
Overseas data have recently improved, particularly in Europe. The European Central Bank (ECB) and the Bank of England are expected to continue to be accommodative in 2014. Europe may see more mergers and acquisition activities but challenges may still lay ahead for the region, with bank asset quality reviews and stress tests, the debate on a banking union, the ongoing struggle of austerity versus growth and the possibility of the extension of the ECB's Long Term Refinancing Operation (LTRO). Avoiding disinflation will also be a challenge for the ECB in 2014.
The real danger and opportunity lies in emerging market countries, where a divergence has grown: some, like China, are growing at or above 7% while others like Latin America are closer to 3%, and still others like Brazil are facing recessionary pressures. While better than average valuations exist in some of these markets the IA&M team thinks it is a bit too soon to start overweighting tactical positions due to cheapness alone. Timing will be paramount as momentum could continue to carry these markets downward, even as global growth accelerates.
The team believes 2014 will be similar to 2013 in that it will be a year of political debates and Fed action domestically, and a slowly improving international economy. High quality municipal bonds will perform relatively well as valuations remain attractive when compared to taxable securities, improving credit quality, and supply remains below historical averages.
Over the shorter term, the team continues to advocate spread or credit products, allocations to credit-sensitive sectors such as high yield, floating rate notes, as well as an underweight to duration. Foreign government bonds will likely outperform Treasuries as supply shifts in the market due to tapering, and the team maintains an underweight recommendation in Treasuries.
"This past year proved to be volatile for bonds, but we continue to expect yields to normalize over the next few years from the artificially suppressed levels created by the FOMC," said Cory Gebel, CFA and Senior Portfolio Manager.
Internationally, the team believes that global growth will continue to recover, but at a slower pace than investors expect. Emerging markets may continue to struggle as the countries attempt to address internal fiscal and monetary issues, effectively reforming current policy from strictly export growth to one more aligned with domestic growth.
With the start of the Fed tapering, the team expects increased interest rate volatility which will benefit alternative strategies that are able to take advantage of that volatility. The team believes global GDP growth may remain modest for several years; however, current valuations for the commodity market appear unsustainably low but will likely rise with global economic growth. Recent energy infrastructure investments should perform well as they are exploited, providing energy intensive industries with an advantage.
The team predicts a pick-up in real Gross Domestic Product (GDP) from 1.6 percent in 2013 to 2.6 in 2014. This increase is mainly attributed to an expected increase in industrial production, business spending, gains in housing starts and spending from an ever-resilient American consumer, and less fiscal drag.
Although the margin by which the Fed is trimming bond purchases – from $85 billion to $75 billion – is smaller than expected, it signals the Fed's confidence in the underlying strength of the U.S. economy. A key factor in the Fed's success in alleviating volatility in the markets will be in guiding the market to distinguish between tapering and rate hikes. Another challenge will be clearly articulating that tapering is not tightening.
"Due to tapering, mortgages and Treasuries will likely underperform the broader market during the tapering process," said Ben Baier, Senior Portfolio Manager. "Housing may face some headwinds from not only the predicted pick-up in rates, but also from tighter government regulations on lending that are set to take effect in January 2014."
The Wealth Management Investment Advisory & Management group at Bank of the West tracks and updates these investment themes throughout the year and applies its recommendations to the portfolios it manages for fiduciary clients.
Bank of the West Wealth Management provides wealth planning consulting, investment management*, personal banking, and trust services. The group is part of BNP Paribas' global wealth management business of more than 6,000 professionals in 30 countries worldwide with over $10 billion** in assets under management in the United States and $381 billion (€279 billion) in assets under management globally as of September 30, 2013.
About Bank of the West:
Founded in 1874, $64 billion-asset Bank of the West (www.bankofthewest.com), member FDIC and equal housing lender, offers a wide range of personal, commercial, wealth management and international banking services. The bank operates more than 600 retail and commercial banking locations in 19 Western and Midwestern states. Bank of the West is a subsidiary of BNP Paribas, which has a presence in 80 countries with nearly 200,000 employees.
*Securities and variable annuities are offered through BancWest Investment Services, Inc., a registered broker/dealer, Member FINRA/SIPC. Financial Advisors are registered representatives of BancWest Investment Services, Inc. Fixed annuities/insurance products are offered through BancWest Insurance Agency in California (License # 0C52321) and through BancWest Insurance Agency in Utah, and through BancWest Investment Services in AZ, CO, IA, ID, KS, MN, MO, ND, NE, NM, NV, OK, OR, SD, WA, WI, WY, HI, GUAM and CNMI. Bank of the West and its various affiliates and subsidiaries are not tax or legal advisors.
Bank of the West Wealth Management provides financial products and services through Bank of the West and its various affiliates and subsidiaries.
BancWest Investment Services is a wholly owned subsidiary of Bank of the West and a part of the Wealth Management Group. BancWest Corporation is the holding company for Bank of the West. BancWest Corporation is a wholly owned subsidiary of BNP Paribas.
Investment and Insurance Products are:
NOT FDIC INSURED • NOT BANK GUARANTEED • MAY LOSE VALUE • NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
** Including assets under supervision at BancWest Investment Services
The information set forth in this material is for informational purposes only and should not be construed as legal, tax, or investment advice. The information contained in this newsletter is not intended as an offer to purchase or sell any financial product, nor does the information constitute an expression of the Bank's view as to whether a particular security or financial instrument is appropriate for you and meets your financial objectives. Past performance is not indicative of future results. Investors should seek the advice of a financial professional regarding the appropriateness of any investment or investment strategy mentioned in this material. All investments involve risk.
SOURCE Bank of the West Wealth Management
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
May. 6, 2016 07:00 AM EDT Reads: 1,066
Much of the value of DevOps comes from a (renewed) focus on measurement, sharing, and continuous feedback loops. In increasingly complex DevOps workflows and environments, and especially in larger, regulated, or more crystallized organizations, these core concepts become even more critical. In his session at @DevOpsSummit at 18th Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, will show how, by focusing on 'metrics that matter,' you can provide objective, transparent, and meaningfu...
May. 6, 2016 07:00 AM EDT Reads: 1,217
Artificial Intelligence has the potential to massively disrupt IoT. In his session at 18th Cloud Expo, AJ Abdallat, CEO of Beyond AI, will discuss what the five main drivers are in Artificial Intelligence that could shape the future of the Internet of Things. AJ Abdallat is CEO of Beyond AI. He has over 20 years of management experience in the fields of artificial intelligence, sensors, instruments, devices and software for telecommunications, life sciences, environmental monitoring, process...
May. 6, 2016 06:00 AM EDT Reads: 1,518
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
May. 6, 2016 04:00 AM EDT Reads: 1,338
Redis is not only the fastest database, but it has become the most popular among the new wave of applications running in containers. Redis speeds up just about every data interaction between your users or operational systems. In his session at 18th Cloud Expo, Dave Nielsen, Developer Relations at Redis Labs, will shares the functions and data structures used to solve everyday use cases that are driving Redis' popularity.
May. 6, 2016 02:45 AM EDT Reads: 1,301
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
May. 6, 2016 02:00 AM EDT Reads: 1,419
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, will discuss how leveraging the Industrial Interne...
May. 6, 2016 01:45 AM EDT Reads: 1,435
In his session at 18th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., will focus on real world deployments of DDoS mitigation strategies in every layer of the network. He will give an overview of methods to prevent these attacks and best practices on how to provide protection in complex cloud platforms. He will also outline what we have found in our experience managing and running thousands of Linux and Unix managed service platforms and what specifically c...
May. 6, 2016 01:30 AM EDT Reads: 1,401
The increasing popularity of the Internet of Things necessitates that our physical and cognitive relationship with wearable technology will change rapidly in the near future. This advent means logging has become a thing of the past. Before, it was on us to track our own data, but now that data is automatically available. What does this mean for mHealth and the "connected" body? In her session at @ThingsExpo, Lisa Calkins, CEO and co-founder of Amadeus Consulting, will discuss the impact of wea...
May. 6, 2016 01:00 AM EDT Reads: 1,264
Increasing IoT connectivity is forcing enterprises to find elegant solutions to organize and visualize all incoming data from these connected devices with re-configurable dashboard widgets to effectively allow rapid decision-making for everything from immediate actions in tactical situations to strategic analysis and reporting. In his session at 18th Cloud Expo, Shikhir Singh, Senior Developer Relations Manager at Sencha, will discuss how to create HTML5 dashboards that interact with IoT devic...
May. 6, 2016 12:00 AM EDT Reads: 1,490
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
May. 5, 2016 11:30 PM EDT Reads: 1,364
Many private cloud projects were built to deliver self-service access to development and test resources. While those clouds delivered faster access to resources, they lacked visibility, control and security needed for production deployments. In their session at 18th Cloud Expo, Steve Anderson, Product Manager at BMC Software, and Rick Lefort, Principal Technical Marketing Consultant at BMC Software, will discuss how a cloud designed for production operations not only helps accelerate developer...
May. 5, 2016 05:00 PM EDT Reads: 1,387
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
May. 5, 2016 05:00 PM EDT Reads: 1,288
A critical component of any IoT project is the back-end systems that capture data from remote IoT devices and structure it in a way to answer useful questions. Traditional data warehouse and analytical systems are mature technologies that can be used to handle large data sets, but they are not well suited to many IoT-scale products and the need for real-time insights. At Fuze, we have developed a backend platform as part of our mobility-oriented cloud service that uses Big Data-based approache...
May. 5, 2016 04:00 PM EDT Reads: 798
Peak 10, Inc., has announced the implementation of IT service management, a business process alignment initiative based on the widely adopted Information Technology Infrastructure Library (ITIL) framework. The implementation of IT service management enhances Peak 10’s current service-minded approach to IT delivery by propelling the company to deliver higher levels of personalized and prompt service. The majority of Peak 10’s operations employees have been trained and certified in the ITIL frame...
May. 5, 2016 04:00 PM EDT Reads: 1,210