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Investors steering clear of emerging markets bonds due to currency volatility

Investors steering clear of emerging markets bonds due to currency volatility

Finance
Mark McCarron, chief investment officer for Wescott Financial Advisory Group, believes in global diversification when it comes to investing in stocks. But not when it comes to bonds. The reason: currency risk. "Our fixed income exposure is almost exclusively in U.S. dollars," said McCarron, whose firm manages more than $ 2 billion in assets. "Currencies are volatile and they represent a much bigger part of bond returns than stock returns. "Investors can get wiped out investing in global fixed income if they do it un-hedged," he added. This year may no...
FTSE hits seven-month low as world markets suffer

FTSE hits seven-month low as world markets suffer

Business
Markets around the world have taken a hit, with poor performances in Asia overnight affecting markets in Europe and the US. Britain's FTSE 100 was down 1.24% to a seven-month low, while all three main US markets were down - the industrial Dow Jones by 1.45%, the broad-based S&P by 1.64% and the tech-rich Nasdaq by just over 2% - although the US markets staged a recovery as they headed towards close.Sky's business presenter Ian King blamed the falls on a "whole combination of factors".He said: "The big long-term factor is that the US Federal Reserve is starting to raise interest rates again and that requires investors to have a complete repricing of risk across the piece - taking some money out of one asset class and putting it in another."Other factors included Saudi Arabia...
One of market’s biggest bulls takes a ‘few chips off the table,’ sees impending sell-off

One of market’s biggest bulls takes a ‘few chips off the table,’ sees impending sell-off

Finance
One of the market's biggest bulls is on sell-off watch. Federated Investors' portfolio manager Steve Chiavarone sees a 5 to 8 percent drop in stocks before summer ends. And, he thinks it may have already started. "We've taken a few chips off the table," the portfolio manager said Friday on CNBC's "Trading Nation," and he cited uncertainty as the overwhelming reason why. "On average, midterm election years have pullbacks, particularly in the summer months," Chiavarone said. "Big trade rhetoric is going to continue to be hot." ...
Japan still has great influence on global financial markets

Japan still has great influence on global financial markets

Finance
IT IS the summer of 1979 and Harry “Rabbit” Angstrom, the everyman-hero of John Updike’s series of novels, is running a car showroom in Brewer, Pennsylvania. There is a pervasive mood of decline. Local textile mills have closed. Gas prices are soaring. No one wants the traded-in, Detroit-made cars clogging the lot. Yet Rabbit is serene. His is a Toyota franchise. So his cars have the best mileage and lowest servicing costs. When you buy one, he tells his customers, you are turning your dollars into yen.“Rabbit is Rich” evokes the time when America was first unnerved by the rise of a rival economic power. Japan had taken leadership from America in a succession of industries, including textiles, consumer electronics and steel. It was threatening to topple the ca...
Chinese and US tech giants go at it in emerging markets

Chinese and US tech giants go at it in emerging markets

Finance
TWO contests are under way in which titans holding billions in their thrall vie for global domination. One is unfolding on Russian football pitches and features the likes of Neymar and Harry Kane. The other is playing out on the smartphone screens of consumers in India, Indonesia, Brazil and other emerging economies. There, American online superstars such as Google, Facebook and Amazon are pitted against a Chinese dream team led by Alibaba and Tencent.The geopolitics of business means that the world’s biggest tech firms have swelled to combined market capitalisations of over $ 4trn without really going head to head. China blocked Google et al with its Great Firewall, preventing American firms (Apple is an obvious exception) from taking on Chinese rivals on the mainland. Chinese giant...