Investing Globally Versus Locally

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March 12 (Bloomberg) -- JPMorgan Asset Management Global Market Strategist Joseph Tanious previews today's markets and discusses his investment ideas with Betty Liu on Bloomberg Television's "In The Loop." (Source: Bloomberg)

To look better this year than in 2013. great to see you again.

Why do you say that?

Class you have to look at the base rate.

In 2013, the 10 year was 1.5%. you now start off at three percent.

I think we are still entering a rising rate environment and that will have an impact on this -- fixed income investment, but i do not think it will necessarily be as bad as returns we saw in 2013. qwest will gross tweeted and said in a statement on twitter, cellular treasury and cell of the fed is been buying because they will not be buying them when the paper ends in october.

Would you agree with that?

Class i would in the sense that if you look at the fixed income universe today and think about which areas of the market will do better, you want to be moving away from interest risk and take more credit risk.

Try to move away from the unhealthy balance sheets of sovereigns, and clued in the united states.

As the fed pulls back on its asset purchases, you will probably see treasuries continue to back up.

That is one area of the bond market i want to avoid.

Go for investment and corporate but stay away from u.s. government.

Qwest even as you move into the corporate side, i would look for higher yielding here at the bond market.

I know you are constructive on japan.

Scarlet has been looking at the case against japan.


Investors like japan.

This is the prime minister's policy to boost the economy through primary easing and boosting stimulus.

It is also hurting japanese consumers.

This combines japan's jobless rate with inflation and economists estimate it will jump to seven percent in april once the government raises its sales tax.

That would be the highest since 1981 when japan was coming out of depression.

Inflation may be rising but wages are not keeping pace and on top of that, partners are not as willing to let it weaken either.

They seem miserable.

Why would you want to buy?

Class there are a number of structural issues with japan.

I am not convinced this will solve them all.

You have issues with the population and of course over 245% debt to -- debt to gdp.

If the bank is successful with two percent inflation, you will probably see interest rates rise.

My thought is looking in the near term.

Once the consumption tax hike goes into effect, i expect he will probably see more aggressive action come from the bank of japan and you may well see the japanese yen weakened further.

Especially for the exporters.

Are you focused on them?

Class we are.

You want to look at earnings expectations of the exporters.

When i look at earnings, i expect earnings estimates will move higher.

You like europe.


Class i will take a page from george soros, who we had earlier this morning.

He essentially warned unless there is a major overhaul in europe, the eu faces decades of japanese-style inflation.

Europe may not survive 25 years of stagnation.

He also said you have to solve the banking problem because europe is lagging behind the rest of the world in sorting out its banks.

He said it is a mistake banks are being encouraged to pass these tests are getting rid of assets.

He wants to see banks loosening lending.

He sends -- he says stocks may look cheap but there are bigger questions about structural reform that need to be put in place before the economy is going again.

Qwest that is a good point.

A lot of uncertainty still.

Qwest europe is another area with a ton of structural issues.

With europe, we take two steps forward and one step back erie the issue will not be resolved overnight.

I have learned markets do not necessarily need to believe issues in europe are resolved in order to outperform.

They need to believe issues in your part detained.

-- in europe are detained.

Given some of the inflation numbers we have -- we have been seeing, economic growth is picking up at the margin, at a very moderate pace.

You will see more operational leverage.

In europe, they are a few innings behind where the u.s. is.

Great to see you.

Global market strategist.

Coming up, more information comes down on the missing airlines, jet, we will learn the

This text has been automatically generated. It may not be 100% accurate.


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