'Perspectives' by Escala

In this episode, Escala Partners CIO, Tracey McNaughton, shares her views on US Fed Chair Powell's "whatever it takes" speech noting it left no doubt – the pain of being too tough on inflation is not as great as the pain that would come from being too soft. Market optimism for rate cuts in 2023 have taken a step back as a result.

(0:46) - Jay Powell's speech last Friday was highly anticipated. Tracey, what was your take?

(5:04) - Does the speech change your asset allocation views at all?

(8:04) - There was an article in the Wall Street Journal which argued that the Fed would more likely go too hard than too soft.

(11:00) - The housing market in the US is looking increasingly sick. How does this tie in with your mild recession thesis?

(13:41) - Your underweight to international equities is specifically focussed on Europe.

In this episode of The Fund Managers, the Escala CIO Tracey McNaughton interviews Peter Rutter, Head of Equities and Portfolio Manager for the Royal London Concentrated Global Share Fund. This conversation explores the unique approach to investing taken by the Royal London team and why their approach is considered the purest form of active management. We hope you enjoy the discussion.

In this episode, Escala Partners CIO, Tracey McNaughton, shares her views on how clients should position for rising US-China tensions, where to spend your fund manager fee budget and has the inflation worm turned?

(0:45) - Geopolitical risk has risen in recent weeks with tension between the US and China over Taiwan.

(4:00) - On the topic of market timing, you recently completed a study of active funds management and arrived at some interesting results.

(7:06) - Your research also revealed the extent of the payoff for getting it right.

(7:37) - Why do large cap funds struggle to beat their benchmark. And I take this result holds through time?

(9:33) - Is this result around small caps what is driving you to look at that part of the market right now?

(12:36) - Just on the USD, it had a big reaction to last week's lower-than-expected inflation report.

In this episode, Escala Partners CIO, Tracey McNaughton, shares her views on how US consumers are adapting to the higher inflation environment. Earnings season is about half way done and while earnings expectations have been cut, more is likely as the economy slows further. Which is why the rally in markets last week should be treated cautiously.

(0:54) - Let's talk about the Federal Reserve meeting and the market reaction.

(3:15) - The debate circulating in the market now is: will this positive sentiment and momentum continue?

(8:17) - The other debate circulating the market is whether the US economy is already in recession. You believe we are already there.

(11:38) - How it is possible to have a recession when the unemployment rate is so low?

(12:52) - We are about half-way through US earnings season. Anything further to report there?

In this episode, Escala Partners CIO, Tracey McNaughton, discusses the key takeaways from the US earnings reporting season and why it is that a low unemployment rate is a bad thing for the economy.

(0:51) - What were some of the key takeaways that came out of Escala's International Equities heat week?

(4:23) - The tightening of the labour market is not only impacting expenses for companies, but also revenue.

(7:19) - What are you looking for in the current earnings season in the US?

(12:33) - The strong US dollar is a two-edge sword for inflation, isn't it?

(13:41) - The aggressive stance of central bank activity looks set to remain.

In the final instalment from an Escala Partners live ESG event, we get the insights from the panel on modern slavery and human rights issues and also hear the panellists responses to our audiences questions.

In this episode, Escala Partners CIO, Tracey McNaughton, explains the course correction by central banks around the world in responding to sticky inflation. Wages are coming under pressure as consumers raise their inflation expectations. Central bank credibility is on the line, the loss of which could be even more serious longer term than a correction in the market.

(0:54) – It has been another eventful couple of weeks in financial markets with plenty of central bank action and new data to digest. What was behind these big moves?

(3:50) – The inflation report did come in higher than expected, but a lot of the price pressure is coming from food and energy, both of which are being driven by forces outside of the control of the Federal Reserve.

(5:50) – Even though we have seen big falls in equities, you don't see the Fed stepping in here and offering any support?

(7:33) – Why is central bank credibility so important?

(10:04) – Last week the Fair Work Commission announced a rise in the minimum wage. What do you think that will do to the inflation picture in Australia and the outlook for interest rates?

(11:49) – We have inflation remaining high and accelerating. Central banks becoming more aggressive and determined in fighting it. Concerns about growth are starting to rise.

(14:51) – Turning to equity markets, what does that do for earnings expectations?

In the second instalment from an Escala Partners live ESG event, we get the insights from the panel on the engagement vs divestment debate and hear some examples of recent engagement initiatives each fund has undertaken.

In the first of a three-part series of recordings from an Escala Partners live ESG event, we get the perspectives of three experts from the asset management industry on what material ESG risk factors they look for in stock selection and also get their views on recent climate change progress.

In this episode, Escala Partners CIO, Tracey McNaughton, discusses the balancing act taking place in the market between price, earnings and valuation. Slower economic growth means slower earnings growth and slower earnings growth will be punished by the market as we saw with US retailer Target. The latest rate hike in Australia brings us inline with moves seen so far in the US.