Displaying items by tag: recession

According to its bi-annual Investor Sentiment Report, commercial real estate data platform Lightbox found that real estate investors are increasingly concerned about a potential recession. In fact, 90 percent of the survey respondents were concerned about the potential for an upcoming recession. Survey participants included commercial real estate professionals from brokerage firms, investment firms, and other real estate segments. Approximately one-third of the survey’s respondents said they were “very concerned” about a recession, while 56 percent said they were just “concerned.” Only 10 percent said they were not concerned at all. The survey, which was taken in August and September, also reflected concerns over the impact of rising interest rates, inflation, and supply chain disruption. Looking at the rest of 2022, most respondents were not optimistic about the real estate market, but 42 percent were more optimistic about 2023. In addition, 80 percent of respondents said rising interest rates, high inflation, and other issues have impacted their hiring strategy, while forty percent said they are only hiring for high-priority needs.


Finsum: Based on the results of a recent survey, 90 percent of real estate investors are concerned about the potential for an upcoming recession.

Published in Eq: Real Estate
Wednesday, 12 October 2022 03:13

Small Caps Are De-Risked According to RBC Strategist

Based on research released Monday, Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, believes that small-cap stocks have already priced in a recession and are currently de-risked. Calvasina noted that small-cap performance has been stable since January and is in a narrow trading range in comparison to large-caps. She stated, “While this doesn’t necessarily tell us that a bottom in the broader U.S. equity market is imminent, it does tell us that the equity market is behaving rationally. It has been our view for quite some time that small-caps, which underperformed large-cap dramatically in 2021, have already been de-risked and are baking in a recession.” She also pointed out the sectors that tend to perform best in the period leading up to the final rate increase in a rate-hike cycle. These include defensive sectors such as consumer staples, energy, financials, healthcare, and utilities. Calvasina wrote the sectors “tended to perform the best within the major index in the six-, three- and one-month periods before the final hikes in the past four Fed tightening cycles.”


Finsum: In a recent research note, Head RBC equity strategist Lori Calvasina believes that stable returns of small-cap stocks are due to recessionary factors already priced in.

Published in Eq: Small Caps

According to a new survey from advisory and accounting firm EisnerAmper, inflation is the largest business challenge for alternative investment managers. The annual survey was conducted during EisnerAmper’s 7th Annual Alternative Investment Summit. It revealed that almost three-quarters of alternative investment professionals believe the U.S. is already in a recession or will enter one by the end of the year. In addition to inflation, geopolitical concerns and escalating regulatory obligations were also named as top business challenges for alternative investors over the next year. Peter Cogan, Managing Partner of EisnerAmper’s Financial Services Group stated that “2021 has been a rollercoaster for alternative investment managers. The ongoing war in Ukraine, coupled with global records of inflation and poor public market performance have forced investors to be nimble in their investment philosophies. The Federal Reserve has made it clear that they’re steadfast in their mission to lower inflation and the survey shows that alternative investors expect this to be a long-term challenge to navigate.”


Finsum:According to a recent survey of alternative investment professionals, inflation, geopolitical concerns, and escalating regulatory obligations are the top business challenges for alternative firms.

Published in Wealth Management

Two strategists from Royce Investment Partners believe that now is the right time to consider small-cap stocks. In an article on Wealthmanagement.com, Francis Gannon and Steve Lipper gave six reasons why they believe the current environment is a great time to invest in small-cap stocks. The first reason is that small caps currently have superior valuations compared to large-cap stocks. Another reason to invest in small caps is the fact that small caps have a history of outperformance following periods of high investor anxiety and low-risk tolerance. Small caps have also historically beaten large caps following periods of deep declines. In addition, small caps operate in their own way; meaning there are significant differences between small and large caps in their long-term performance during different market cycles. Gannon and Lipper also mention that small caps are a highly heterogeneous asset class, indicating that there are so many small-cap companies that investors can find stocks in every sector and industry. The sixth and final reason is that investors lose out by waiting to put capital to work. They noted that small-cap recoveries have historically happened very quickly.


Finsum:Two strategists from Royce Investment Partners provide six compelling reasons why investors should consider small-cap stocks now.

Published in Eq: Small Caps
Tuesday, 17 May 2022 17:27

How to Respond to Volatility

The market is seeing some of the highest volatility since the pandemic and before that, you have to go back to the taper tantrum, but how should investors respond? While the most obvious answer is to ‘buy the dip’, the question remains where. Investors should look to industries whose fundamentals haven’t shifted in the most recent months or are less susceptible to the ongoing volatility shifts. This value tilt means leaning towards financials and commodities. Moreover, investors should steer clear of those exactly susceptible to current volatility spikes. Technology and emerging markets are easy stay-aways because inflationary pressures are going to hurt growth stocks and supply constraints will bottle up developing economies for the foreseeable future.


Finsum: More advanced hedging strategies should be considered in equity markets given the volatility, but still tilt toward value.

Published in Eq: Total Market
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