The monthly Timmer market report
Jurrien Timmer – Taking stock of the markets
Stay up-to-date with the markets as Fidelity’s Director of Global Macro Jurrien Timmer weighs in on the latest developments.
Anatomy of a Drawdown
February 2019
Jurrien Timmer, Director of Global Macro, calls 2018 “the year of the reset”. He talks about why 2019 is looking better for him.
Outlook 2019: Solving the math puzzle
January 2019
Jurrien Timmer, Director of Global Macro, feels that following the 23% decline in valuations, investors are better compensated for an uncertain future.
Lessons from the Sixties
December 2018
Jurrien Timmer, Director of Global Macro, says the 5-year correlation between stocks and bond yields peaked in 2015 and has come down steadily since. Will it flip to negative like it did during the mid-1960s? Jurrien believes that a lower correlation between stocks and yields will have implications for investors.
Purgatory lies at the intersection of “E” & “r”
November 2018
Jurrien Timmer, Director of Global Macro, says that as scary as market volatility has been of late, he believes this is exactly what the market should be doing based on the inescapable math of the discounted cash flows (DCF) model. We are at the intersection of “E” (earnings growth) and “r” (cost of capital) – which he calls “market purgatory”.
Mind the gap
October 2018
Jurrien Timmer, Director of Global Macro, asks if the U.S. Federal Reserve policy is “easier” than most thought it was. He concludes that the Fed is probably further below neutral than anyone thought – which supports his view that a sell signal from an inverted yield curve over the next 12 to18 months likely will prove premature.
Crunch time for emerging markets
September 2018
Jurrien Timmer, Director of Global Macro, looks at the current market conditions for emerging markets (EM). While the last EM rout was rescued by the U.S. Federal Reserve, a reprise may be wishful thinking this time.
Should we worry about the yield curve?
August 2018
Jurrien Timmer, Director of Global Macro, asks if the impending inversion of the yield curve means a recession is imminent. Jurrien believes that historically an inverted yield curve has been a reliable indicator of a recession, but that's not the case now. If and when the yield curve inverts, its signal may well be premature.
Waiting for the end game
July 2018
Jurrien Timmer, Director of Global Macro, looks at what can break the market out of its trading range. He discusses how earnings have helped the market weather tightening financial conditions, and why the U.S. Fed’s plans may decide which way the market moves when stocks break out of the trading range.
All about the liquidity
June 2018
Jurrien Timmer, Director of Global Macro, looks at how earnings have been booming and supporting the stock market. But where the market goes from here could depend on liquidity (i.e., financial conditions), which is much more correlated to the stock market’s direction than earnings.
Nowhere to go but sideways?
May 2018
Jurrien Timmer, Director of Global Macro, feels that the U.S. equity market may find itself in a sideways trading range for the next six to 12 months, but for a market inching closer toward the late cycle, this may not be a bad outcome.
Lower stock valuations may be a trade-off of higher trade tariffs
April 2018
Jurrien Timmer, Director of Global Macro, looks at the recently proposed trade tariffs, which could threaten to squeeze stock valuations in the coming months. However, strong earnings growth could mitigate any decline in equity prices.
Storm clouds and silver linings
March 2018
Jurrien Timmer, Director of Global Macro, analyzes the recent market volatility. Although stocks recently plummeted 12% over a two-week period, but it may be just what the market needed as bond yields seem to be in better sync with the Fed and equity valuations appear more reasonable.
Two roads the market may follow
February 2018
Jurrien Timmer, Director of Global Macro, analyzes prior secular bull markets and the findings suggest the current bull market could continue into 2019. One counter-argument against this rosy outlook is that, over the long term, high starting valuations can lead to lower future returns.
Four key drivers for stocks in 2018
January 2018
Jurrien Timmer, Director of Global Macro, talks about how earnings, liquidity, Fed policy, and China could be notable market movers in 2018. The year may produce a more balanced risk-return dynamic, as earnings moderate to historic trend level and financial conditions start to tighten.
Minus inflation and leverage, a bear market doesn’t add up
December 2017
Jurrien Timmer, Director of Global Macro, talks about how without excessive leverage or rising inflation, a bear market seems unlikely.
As good as it gets
November 2017
Jurrien Timmer, Director of Global Macro, talks about how, with growth drivers maturing, it’s time to view the investment landscape through a more critical lens. Although an imminent correction is doubtful, the question in coming years remains how the end of the global easing cycle will affect the investing environment.
Another milestone on the road to policy normalization
October 2017
Jurrien Timmer, Director of Global Macro, talks about how, despite the Federal Reserve holding rates steady in September, their plan to start rolling down their balance sheet signifies a major milestone, underscoring the central bank’s commitment to unwind its nearly decade-long easy-money policy.
The conversation we'll be having for years to come
September 2017
In this article, based on a U.S. article, Jurrien Timmer, Director of Global Macro, believes that the timing and degree of monetary policy normalization will likely come down to the overall growth environment and inflation. A strong economic and earnings backdrop should allow central banks to normalize faster than a weak one.