Natixis Provides Midyear Outlook from Morningstar

NEW YORK - June 20, 2016 - PRLog -- On June 14^th, Asset TV attended the Morningstar Investment conference in Chicago where resident reporter, Gillian Kemmerer had the opportunity to host a live-streamed MASTERCLASS panel discussion with three financial experts from Natixis Global Asset Management.  With high evaluations, lower rates and volatility the new normal, Gillian set out to find out where Natixis sees challenges as well as potential opportunities for the rest of 2016.

David Lafferty, Chief Market Strategist at Natixis, started off the discussion by offering his insight into the current market environment.  "I think if you step back and look really big picture, the global macro economy is really stuck in kind of a rut…We need population growth.  We don't have a lot of that in the developed world."  David explains that while China has plenty of population, they do not have a lot of workforce, while Japan, the US and Europe have demographic problems and a slow population growth.  As David points out, "[Population growth] is one of the long term drivers of economic growth.  If you don't have that, you need productivity growth [which] we can't seem to find anywhere."

Shifting gears to the local US economy, Dawn Mangerson, Director of the Municipal Portfolio Management Team of McDonnell Investment Management offered her view.  "When you look at the domestic economy and where interest rates are here, it's much more attractive than globally.  However, we still have to take into account what is going on globally."

When asked about her outlook on the Fed and potential interest rate hikes, Dawn stated, "You know, everybody's eyes have been on what the Fed is going to do.  And I think right now our bigger risk is for lower yield as opposed to higher yield.  I think right now it might be a little bit more of a welcome to have some higher rates, maybe a little more inflation."

In terms of what's coming down the road, Jens Peers, CIO of Sustainable Equities and Fixed Income at Mirova, joined in to share his outlook for the future.  "In the next couple of weeks and months, volatility will actually remain quite high, linked to more macro or political type events."  Some of these events, of course, refer to the Brexit debate in Europe, the upcoming presidential election in the US, and the ongoing discussion on Chinese economic growth.  "That all has an impact on equity markets in general," Jens stated.  "We still think that from an earnings growth point of view this year, you're pretty much looking at max flat numbers.  But that's for the market as a whole. There are pockets of value and opportunities elsewhere."

As Dawn points out, some of those opportunities exist in the municipal bond market.  "I've always been of the mind that a lot of what's in the muni market is good for communities and the economy.  We're investing in clean water projects.  There's all kinds of things they can be invested in:  Hospitals, schools, wind power…a number of different things in those sectors."  Because munis are an attractive investment at the present time, Dawn warns that one hurdle many investors could face is that there is too much demand in the muni market. "We would love to see a pick-up in supply.  Right now it's a little bit of a technical issue.  Munis rely on a lot of refunding issuance.  There's negative arbitrage.  They just can't get enough in the treasury market to refund that issuance.  So we're relying on that to increase the supply of the muni market."

To watch this entire interview and to find out more potential areas of opportunities in the market, tune into Asset TV.  Following the video, be sure to take the accompanying quiz to earn CE credits from IMCA:

http://bit.ly/28J0ruW (https://www.assettv.com/video/masterclass-natixis-midyear...)

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