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Policy and Regulatory Commentary
COVID-19 isn’t going away
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Colossal policy responses in the second quarter reassured investors that the U.S. economy can weather the COVID-19 downturn, with a relatively quick return to risk assets pushing the S&P 500® up 20.5% for the period, its best quarter since 1998. After bottoming in March, U.S. stocks rose as much as 44% before the rally stalled a bit over the last few weeks of the quarter. We saw a few signs of hesitation for more policy among lawmakers as indicators improved, but overall both Congress and the Federal Reserve (Fed) remain prepared to do more.
Policy and Regulatory Commentary
The U.S.-China relationship in a changing global economy
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An inevitable blame game between the U.S. and China has followed COVID-19, but the crisis has really just extended the “trust deficit” that has been steadily building between the two countries in recent years. Though the “Phase One” agreement between the countries remains intact, it is very fragile and China is turning to a more domestic focus. The U.S.-China relationship, however, remains pivotal for the global economy, and in our mini-forum devoted to the topic, we began with a discussion of the relationship from China’s perspective.
Fixed Income Insights
Fixed Income Market Update
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In our view, monetary and fiscal policy have done a tremendous job in papering over fundamental uncertainty. Read more for the news & nuggets
Fixed Income Insights
Municipal Fixed Income: Bluebirds fly
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We focus on the strong recovery in the muni market over the second quarter, which proved to be illuminating to municipal investors on a couple fronts.
Policy and Regulatory Commentary
U.S. presidential election outlook
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As the 2020 election season heats up and President Trump’s odds of winning continue to run cold, we believe it is important to understand the investment implications of a potential change in government versus the status quo. We have outlined the policy implications of the three most likely election outcomes: a Democratic sweep, a Biden presidency with a Republican Senate and a Trump presidency with a Republican Senate. This analysis assumes that Democrats hold the House, which we believe is highly likely.
Macroeconomic & Geopolitical
Biden goes the predictable route
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After a lengthy vetting process, Democratic presidential candidate Joe Biden selected Senator Kamala Harris as his running mate for the 2020 presidential election. Though many names were floated in the past month, Harris has long been considered a favorite for the VP pick. Harris, a 2020 candidate for president herself, fits the bill as an experienced politician with liberal credentials and a knack for fundraising. In the past Biden spoke about the need to pick a VP who could lead the country if needed, and her experience in California state government and the U.S. Senate, as well as her national profile, make her a natural choice.
Behavioral Finance
Creativity, economics and life with Russ Roberts
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For many, economics is viewed only through the lens of numbers. But what can economics teach us about planning and making life decisions?
Russ Roberts joins the podcast to discuss the intersection of economics and life. From embracing uncertainty to evaluating financial tradeoffs, Russ will help broaden your perspective and apply economic principles to your clients’ daily lives.
Human Capital
Fostering a diverse and inclusive culture
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Diversity and inclusion in the workplace is an important component to the success of your firm. In this episode, we’ll discuss ways to openly approach diversity and inclusion in the workplace with a desire to improve and understand.
Fellicia Foster is the U.S. Head of Diversity & Inclusion for BMO. Fellicia discusses how a diverse, inclusive culture can lead to tangible benefits for your practice, including higher performance from your team and a better understanding of your customers.
Market Outlooks
Replay Market Monitor – Evaluating Opportunities and Risks
Today’s market has eclipsed both the Global Financial Crisis and Tech Bubble in terms of the underperformance of value investing - this call is an opportunity to hear directly from the investment team how BMO interprets these events and reacts to them via proprietary tools and processes.
Fixed Income Insights
May 2020 Fixed Income Market Update
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In our view, the markets feel much healthier at the end of April than a month ago, but underappreciated in the improved sentiment is not only the scale of March policy action, but its continuation into April. Actions announced in April would ordinarily have remained in headlines and discussion for weeks, but the nearly half trillion dollar U.S. fiscal stimulus package has been treated almost as a footnote to its much larger cousin in March. Similarly, Fed and other central banks not only continued to implement the massive programs initiated last month, but significantly expanded on them.
Market Outlooks
What’s next for China?
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As the first country to tackle COVID-19, China has institutional investors globally wondering about the local situation – and what it means for their portfolios. June Lui, Portfolio Manager, BMO LGM Investments, gives an on-the-ground assessment of China’s economic backdrop and the impact on stocks.
Market Outlooks
The enemy of a major economic slump is debt
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This is a hard commentary to write. The situation is obviously very grave but also extremely fluid and no one has any special or privileged insight as to when a degree of normality may return. All pandemics end but it would be foolish on our part to suggest that it will be over within a few months. What is clear is that the world is tumbling into a serious global recession with significant unemployment. When both supply and demand collapse the end result is obvious and unavoidable. Governments and central banks have thrown several kitchen sinks at the crisis but with a world in lock-down it does little to lift economic activity. Expenses go up but incomes go down.