Hailer’s other observations include:
- Employment may have
plateaued. The number of Americans hired
in the second quarter averaged 75,000 per month, only one-third the
average monthly gain for the first quarter. Rising unit labor costs amid
falling productivity will continue to challenge job growth.
- U.S. markets are volatile,
but still good long-term value.
The S&P 500 experienced near-record first-quarter gains, virtually
lost the gain within two months, then roared back with the strongest June
since 1999. But with equities priced slightly below long-term averages,
markets at about 13 times expected earnings, and corporate and high yield
bonds in favor, Natixis’ active managers still see very good values for
the long term, particularly when combined with non-correlated alternative
investments.
- Earnings growth declines. Corporate earnings growth is expected to have dropped
over the last three months, in part because of declining revenue from
Europe, but will still mark the 11th straight positive quarter
for the S&P 500.
- Emerging markets will
struggle. China will probably have a
soft landing after economic growth declined to near 7%. But expect greater
volatility in other emerging markets as global demand continues to drop
and countries struggle with structural change.
The full video can be seen here.
Jill Cornfield