1. MII Market Views James Zhang
November 1st, 2016

2. Macro Trends in 2016 Fixed Income Equities
Moving towards the tail end of a long and expansive credit cycle
Slow and erratic growth has been just enough to keep credit momentum positive
Low interest environment drives high yield outperformance
Most classes will perform reasonable well as long as Fed gradually increase rates over the next 2 years
Low and negative sovereign bond yields in Europe
“Good but not great”
Healthy balance sheet and income statement returns, yet equities have not outperformed in any sense in 2016.
FTSE companies have done well in wake of “Brexit” referendum
Valuation does not drive market growth higher; earnings growth does
Wages increasing, higher inflation, moving towards full employment, may be squeezing profits
Commodities & Emerging Markets
Central Bank Policy
Fundamental story is indeed improving; Oil, coal prices are slowly bottoming out
Negative sentiment was primarily associated with China
Commodities-producing EM countries have all taken significant pain in the past 2 years
EM debt could potentially look attractive; exposure to commodities upswing
Liquidity returning and currencies slow appreciating
Diminishing marginal benefits; continuing easing has driven some negative sentiment post-Brexit
Central bank policy divergence turned into convergence
Low rates could prompt fiscal policy
Japan; not too much optimism here 
Negative interest rates have completely changed the relationships between lenders and borrowers in European countries