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NAPERVILLE, Ill. and
Jan. 11, 2012 /PRNewswire/ -- Calamos Investments, a global investment management firm, released its Global Economic Review and Outlook. Calamos' Co-Chief Investment Officers,
John P. Calamos, Sr. and
Nick P. Calamos provide their views on the current economic environment and discuss factors which may affect the global markets and investing opportunities and risks. Calamos invites you to read the entire Global Economic Review and Outlook at
Calamos.com/Outlook. Topics include the following:
GLOBAL ECONOMIC OUTLOOK
Two steps forwardOver these past quarters, it's felt as if the global economy moves forward, only to move back. It should be "more of the same" in 2012 and 2013, with quarters that feel like recovery followed by quarters that feel like slowdown.
A long road backEconomies going through debt deleveraging cycles should continue to bounce around zero growth, maybe plus or minus 2%, until a reasonable amount of debt clearing is achieved. This debt clearing will take years, not months.
The U.S. economy is on a two-tier trackWe anticipate muted growth or continued contraction in the financials, housing and construction industries overall. Meanwhile, the other side of the U.S. economy is growing with expansion in the information technology, energy, health care and industrial sectors and some retail areas.
Emerging markets, especially China, will continue to assert themselves on the global stageChina still has plenty of ammunition and flexibility to manage its economic growth, including a soft landing in its real estate market. We expect an easy monetary stance this year from China as it responds to slower growth.
Global politics are a potential game-changer2012 is a pivotal year for global politics and leadership changes in the U.S., China, Europe and many countries in the developing world. This creates opportunity and risks.
The debt bubble presents a persistent threat to growth and recoveryMany developed nations are reaching a point of no return, where even slight increases in interest rates could have dire implications. Politicians and developed market governments must stop playing kick-the-can.
High volatility will remain the normWe expect that global financial markets will remain very volatile and hypersensitive to both government policy initiatives and the unwinding of private and public sector debt.
Equities provide the most attractive opportunitiesThe equity markets should respond to a combination of monetary reflation and fiscal restraint as long as pro-growth fiscal policies are part of the mix. In our view, the equity markets provide the best way to access global growth opportunities, with far better risk/ reward characteristics than most countries' government bonds.
Strength in emerging marketsWhile we believe a broad-based expansion in price-to-earnings multiples in the developed world is unlikely in 2012, we would not be surprised to see a rally in emerging market equities, including a strong advance in Chinese equities.
Reflation, a catalyst for growthGreater coordination among central banks and global manufacturing data point to increased reflation activities. We intend to stay the course and only reduce our risk-asset and reflation-asset exposure into strength.
Corporate bonds are also compelling, on a selective basisHigh-grade and mid-grade corporate bonds may still offer the most dependable source of low-risk-but-still-positive real return. Investors must balance credit risk and duration risk as global recession risk is likely once again higher than inflation risk.
Calamos Investments is a globally diversified investment firm serving the needs of institutional and individual investors for over 30 years. The company's clients include public and private pensions, foundations, endowments, corporations, financial advisors, families and individuals from around the world who have entrusted the firm with
$33.7 billion in assets under management as of 11/30/2011.
Calamos offers a range of global investment solutions - equity, fixed-income, convertible and alternatives - to work with clients' multi-asset allocation frameworks and achieve the goals of their investment programs.