Devin Fitzpatrick Art Consultants Review: The essential role of wall art in interior design11/21/2017 Devin Fitzpatrick Art Consultants regards wall art with great importance in your interior design, and the following were made to help you select art pieces that will match with your current space and to give more harmony to your interior.
Color palette Wall art can provide immediate color palette. You can use a painting or a wall hanging that you truly love as an inspiration for your room’s color palette since choosing one in the process of designing for your interior could take too much of your time. Select two or three shades from the wall art and decide which is the dominant color and other shades as well that you would like to make as accents. Use items that fit those colors in decorating your space where you can also use a mobile application for example in determining the corresponding shades of paint to particular colors, or get the professional help of an art expert such as the Devin Fitzpatrick Art Consultants. Focus It can also be that design element in a room that can attract attention and be the central focus of a specific space in your house. Its size should be your priority because a wall art that is too small or too big will not be an effective focal point. Know the proper measurements first and match it to the entire space available. Texture Wall art can provide a sense of texture as well. Find art in the form of different mediums to help provide a varying sense of texture into a specific space. In addition, sculptures or shadow boxes can add depth to the room. Such additional bits of texture can help put more visual weight to your interiors. Sense of completion Wall art can help pull a space together and make it feel complete. You might be following a certain decorating style for your room right? Pick a wall art piece or other hanging art that match to that style. Having a new space to put decorations on is an exciting feeling. But will all those anticipations, you shouldn’t forget to make wall art one of your priorities when it comes to interior design. Wall hangings can provide a good framework around when executed properly, which can also be used as a central guide in planning the rest of the room. Know more related information about art with Devin Fitzpatrick Art Consultants.
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Antiepileptic drugs and the potentially harmful effects on unborn children has hit the headlines as a survey reveals many women have not received the new safety warnings about the dangers of taking it during pregnancy.
In an exclusive story from the BBC, it has been revealed that out of the 475 women under 50 currently taking Epilim (sodium valproate) nearly 70% had not received the new warnings. These new warnings, known as the Valproate Toolkit, were launched in February 2016. Created by the European Medicines Agency (EMA) the aim of the toolkit was to improve patient information about the risks of neuro-developmental disorders in unborn children. The data extracted from a survey of 2,000 women and girls, commissioned by three charities — Epilepsy Society, Epilepsy Action and Young Epilepsy — also demonstrated that one in six women taking the drug were not aware of the negative affects it may have on the development and/or physical health of an unborn child. In the UK alone about 20,000 children have been affected by antiepileptic medicines (valproate medicines) since the 70s. A public hearing concerning sodium valproate will take place on 26 September at the EMA’s London offices in Canary Wharf. The survey results will be presented during this hearing, which is the first time the agency’s safety committee has held a public hearing as a part of a safety review of a medicine. During this session, women will be able to recount their personal experiences of taking the medication to the agency’s safety committee. The hearing will be focus on three main areas: the risks of the medication in pregnancy, the current measures in place to reduce the risks of using valproate in pregnancy and the measures that should be taken to reduce the risks associated with the medication and its use in pregnancy. The Medicines & Healthcare Products Regulatory Agency (MHRA) in the UK explained that valproate was constantly reviewed and warnings surrounding the medication were updated as and when new data were made available. “The results of the survey are important in helping us understand the effectiveness of the measures taken to date in the UK. We want to encourage all women to have access to the valproate toolkit materials that we made available in February 2016,” the agency said to the BBC. “We constantly monitor the safe use of valproate and support this latest review by the European Medicines Agency on the use in pregnancy and women of childbearing age.” Expect only an honest and a better real estate service with Phil Devin Real Estate that is situated in Australia. It is defined as a small “boutique” agency environment, and its never-ending dedication acquired the trust of a lot of individuals, and many still continue to respect its responsive, comprehensive, and personalized service.
Phil with his many years of experience in real estate made him one of the most trusted professional in giving a positive outcome to any project. He works hard to meet or even surpass the expectations of his clients. Phil Devin is committed to performing a careful job and always ensures that every detail is correct. He will also give you his genuine judgment regarding your real estate concern, but worries aside, he will also develop the right solution for you. He will do his best in giving you the results you are dreaming of. You can depend on Phil’s abundant knowledge on real estate because of his many years of service in this field. He has all the experience and insights to properly guide you in your real estate endeavor. Because of his professional and amiable approach, a lot of clients still continue to seek his service. Reviews about him often include his clients recommending him to take care of the real estate needs of their family and friends. It all started with a single purpose, and that is to grant a “better service and better results” to different people looking for a professional real estate help. Phil Devin Consultants continues to expand its reach and keeps on giving its service to anyone who needs them. He is now one of the experts in the area that have a smart foundation in real estate. But he does not stop learning new things about his field from other people as well. For Phil, continuous learning is the minimum requirement for success in any field. The official website of Phil Devin Real Estate also offers features that can be very helpful to its present and future clients. You can request an appraisal, search for properties for rent or has been sold, fill-up a tenancy application, or even request maintenance. Visit the website for more information regarding the matter. About Us Speak to anyone who has experienced the PROCESS of buying or selling Real Estate and often their findings are a combination of stress, disappointment and ultimately compromise! One of my many goals is to ensure your next move is a positive one. I started Phil Devin Real Estate with one simple mission: "To deliver RESULTS that exceed our clients EXPECTATIONS". What does this mean for you?
Ultimately when you buy or sell with me, it comes down to your decision, what's right for you. My goal is to make sure you have enough information to make a decision you can be happy with down the track. When you choose me to help you buy or sell your home you can count on responsive, quality, comprehensive and personalized service. "Disappointment is the difference between what a client EXPECTS and what the Agent DELIVERS" I know that my clients are craving to deal with a 'professional' who can 'listen' to their individual wants and needs and provide solutions for them! Phil Devin is that professional!
Galveston Capital - Digital Disruption Key to Achieving Indonesia's Tourism Targets: Minister5/30/2017 Jakarta. Tourism Minister Arief Yahya said the government will consider assisting entrepreneurs and private businesses to achieve its target of establishing 20,000 homestays across the country this year.
Speaking at this year's second national meeting on tourism at the Bidakara Hotel in South Jakarta on Thursday (18/05), Arief said government agencies will work alongside Real Estate Indonesia, academics, local communities and media outlets to provide more budget-friendly accommodation in priority tourism areas. Arief added that positive digital disruption, or the emergence of game-changing digital services, will propel the industry in the coming years to allow the ministry to achieve its ultimate target of establishing 100,000 homestays across the archipelago by 2019. "It is real; it is inevitable. Sooner or later, it will happen, it is just a matter of time before all companies, institutions or nations will be 'disrupted.' In the digital era, it will be swift," the minister said. "Even companies with impeccable reputations, stalwarts of the 'old way,' must adapt to the new digital landscape to survive these changes," he added. Arief cited online-based ride-hailing services such as Grab and Go-Jek as examples of new companies that have changed the conventional business landscape. He said traditional hotel agents have been usurped in recent years by the convenient and user-friendly services offered by companies such as Airbnb and Traveloka. "These innovations are always seen as chaotic at first. They were initially ignored, because many people did not believe they could work. Well, they do," he said. Realizing the massive impact of digital technology, Arief, a former director of state-owned telecommunication company Telkom, has been digitizing homestay management since last year. "Now, 2,000 homestays have been registered on the digital platform belonging to the Indonesia Tourism Exchange [ITX]," he said. The platform assists homestay owners to manage their businesses on par with world-class hotel chains. "It is a must; it cannot be bargained anymore. Those who are not joining will experience difficulties in their businesses," he said. However, Arief said the effect will be positive. It will increase the size of the market and value of tourism in Indonesia. Demand will increase, as the market consists of multiple sources across the globe. "So, our cultural village homestays can be worldwide, not only operating in Indonesia," he said. Arief said it can often take up to five years to build a hotel, which is considered high-cost tourism, while homestays, which constitute low-cost tourism, only take six months to establish. "Interest in home-sharing is expected to increase from 10 percent [in 2016] to 15 percent [in 2020] in most major cities around the world. In Southeast Asia, the trend is also expected to increase from 2 percent [in 2016] to 5 percent [in 2020]. Therefore, I believe Indonesia will become the best and largest homestay manager in the world. It is a dream we can achieve together," he said. Standards help, too, as we fight to ensure the cost of sharing doesn't outweigh the benefits
A long-ago cartoon in The New Yorker put it plainly: "On the Internet, nobody knows you’re a dog." If that cartoon had been written today, the caption might have read, "On the Internet, nobody knows you’re a fraud." Scam artists, snake oil salesmen, sock puppets, bot armies and bullies - every time we look up, it seems as though we discover another form of dishonesty, grifting grown to global scale via the magnificent yet terrifying combination of Internet and smartphone. None of that should surprise us. People are wonderful and horrible. The network we’ve built for ourselves serves both the honest and the liar. But we have no infrastructure to manage a planet of thieves. Navigating this stuff goes well beyond ‘caveat emptor’, into the darkest secrets of spear phishing and social engineering playing on our higher selves for the basest reasons. It’s no longer an African prince offering you a hundred million dollars for your assistance; it’s a customer who carefully noted all her transactions and registration numbers on a Word document she’s enclosed in a very helpful email. Security has been stretched to the breaking point. If things continue as they have, the costs of connectivity could begin to outweigh the benefits, and at that point, the post-Web civilization of sharing and knowledge, already fraying, would unwind comprehensively, as people and businesses withdraw behind defensible perimeters and call it a day. All of this served as subtext - never spoken, yet always front of mind - at the Twenty-Sixth International Conference on the World Wide Web. In some broader sense, this is all the Web’s fault - the shadow of its culture of sharing - so might it be a problem that the Web can fix? This question obsessed the hundreds of research postgraduates presenting papers and posters at the conference. Insofar as papers presented by the Web’s core research community are a reliable indicator of the future direction for the Web, that future centers on learning how to detect lies. Detecting false advertisements, bullies, and bots - all of these can be done with machine learning. It can even be applied to a politician's tweets - to find out if they’ve been fibbing about where they’ve been, and when. This flurry of research hearkens back to one of the oldest problems in Computer Science - the Turing Test. Can you detect whether someone at the other end of a text-based connection is a person or a computer? What questions do you ask? How do you analyse their responses? Take those same ideas and apply them to a vendor on Alibaba or an account on Twitter - ask the questions, analyse and probe - then decide: truth or lies. As Sir Tim Berners-Lee won the ACM A.M. Turing Award last week, the timing of this next evolution of his Web could not be more appropriate. The Web needs to grow a meta-layer of error-checking and truth-telling. Those will likely slow things down a bit, even as it helps us feel more assured that the fake can be suppressed. This will never be as true as we might want it to be. As soon as any system to detect lies goes into widespread deployment, the least honest and most clever will go to work undermining that algorithmic determination of truth, finding its weaknesses, and exploiting them. It was ever thus; over the long term, the search for truth will has always been an act of persistence and dedication. Machines can help us in this battle - but machines will be used on both sides, deceiving and revealing deceit. Yet there is hope: there’s too much money on the table to allow the forces of darkness to gain ascendancy. Chaos is bad for business. Any alignment of commerce with the greater good is a rare and potent combination, meaning the resources to fight this battle will be available into the foreseeable future. Those graduate students with their fraud and bot detection algorithms will be snapped up by those giant firms whose profits depend on a Web that is truthful enough for commerce. When it comes to truth, what’s good for Google and Facebook is good for the rest of us. Galveston Capital Tourism and Marketing: Affordable Galveston homes that offer a charming getaway4/20/2017 Whether you're looking to make a permanent move out to the island, buy a vacation home for rental income, or are just curious what it costs to live by the shore, check out these five affordable Galveston homes:
3727 Avenue P: Built in 1922, this 1,292-square-foot Craftsman bungalow has been fully updated but maintains some of the original structure's features. Exposed brick walls in the kitchen and distressed wood floors lend this cozy home character. 3406 Avenue P: This 1,144-square-foot home, built in 1914, has two bedrooms and one full bath. Inside, coffered ceilings and dark-wood molding in the living spaces contrast with the kitchen's light, airy motif. It's true to its original condition, down to the paint colors: a specialist was able to track down the home's original hues. 1202 Church: Close to the Historic Strand District and the beach, this 2,540-square-foot house also has good leasing potential. Built in 1890, the historic structure has five bedrooms and three baths and is set on a 3,605-square-foot lot. 17615 Termini San Luis Pass: This townhome is being sold mostly furnished. The two-bedroom, three-bath house has 1,314 square feet of livable space, as well as a spacious deck. The newest home in this roundup, it was built in 1983. 4241 Pointe West: The highlight of this home is its ocean and bay views. Surrounded by green spaces and water panoramas just beyond, this 1,427-square-foot condominium is filled with windows to let in natural light. A deck offers a space to relax at this three-bedroom, two-bath home. Jakarta Capital Indonesia Travel Review: A Travel Guide To The Thriving Capital of Indonesia4/18/2017 Jakarta, with its traffic-plagued streets, high-rise buildings and persistent blanket of smog, may at first seem like a not-so interesting destination that can easily confuse and confound Pinoy travelers. But beneath its unappealing façade and rough surface, you will find a diverse and multicultural megalopolis filled with unexpectedly delightful corners, colorful attractions as well as remarkably positive and good-natured citizens.
And, with a little travel planning and help from Skyscanner, you can surely have a blast and a hassle-free memorable trip in Indonesia’s thriving capital. Why visit Jakarta? Jakarta isn’t normally the first place that pops into mind, when Pinoys imagine of travel destinations in Indonesia. Hardly a relaxing and scenic vacation spot, the economic dynamo of Indonesia boasts no palm-lined avenues and gorgeous beaches, in spite of its coastal and sub-equatorial profile. Not to mention, it is a humid, populous and immense urban sprawl known for its maddening traffic. But, the “Big Durian” has a plethora of rewarding experiences and spellbinding diversions that compensate for its flaws, should the more adventurous Pinoy travelers accept its challenges, sensations and sights. While it’s no oil painting, the city has tons of hipster markets and a fascinating colonial history that’s totally worth exploring. What’s more, it has a flourishing culinary scene, and an electric world-class nightlife circuit, making Jakarta one of the most dynamic cities in Southeast Asia. A colorful mixture of customs, dialects and cultures, Jakarta is also praised for its ultra accommodating and hospitable locals. As a matter of fact, the citizens here are so friendly that you are bound to create lasting friendships. Documents needed to travel to Jakarta You don’t need to go through the hassles of securing a visa, to set foot on this buzzing and colorful Indonesian hub. After all, any Juan with a Philippine passport that’s valid for 6 months following the departure date will be granted visa on arrival in Indonesia. Keep in mind, though, this kind of visa is valid only for 30 days and is applicable to social visits, leisure, government visits as well as for people who are attending conferences, seminars and convention. Furthermore, it’s nonconvertible, non-extendable and can’t be used for employment purposes. Though you can enter Jakarta without a visa, you still need to present a few supporting travel documents, and go through an interview at the immigration counter. For those who are traveling overseas for the first time, it may take a while for you to get through the immigration officer, meaning you should prepare your documents beforehand and check-in early. For the most part, these are the documents that the immigration officer from a Philippine airport will ask from you.
How to get to Jakarta Philippine Airlines and Cebu Pacific offer daily flights from Manila to Soekarno Hatta International Airport – Jakarta’s main international gateway. Travel duration from Manila to Jakarta is about 4 hours. Likewise, Singapore Airlines has connecting flights to Jakarta with a layover in Singapore. Travel time for this route is around 6 hours and 40 minutes. Upon your arrival at the airport, you may get to the city center via DAMRI shuttle buses, which connect international passengers to numerous destinations in Jakarta. Depending on the type of seat and location of your drop off, a ticket person for this bus ride will cost you 25,000 to 35,000 IDR (91 to 250 PHP). The bus service is air-conditioned, comfortable, reliable, and operates until midnight. To get tickets for this bus ride, head to the left after going out of the Terminal 2 building, until you see DAMRI bus stops and ticket booths. When to go and visit Jakarta Jakarta, with its tropical climate, is a good year-round destination, though floods can affect the city during the wet season. The dry season, which starts from May and ends in September, is arguably the best time to visit Jakarta. With a friendly low average temperature of 30°C (86°F), you can easily tour the city without having to worry about getting wet on the dry months. But, make no mistake about it – visiting Jakarta during the wet season can be quite a pleasant experience as well, once you get used to the frequent rains. Important Bahasa words and phrases Since English is not widely spoken in the archipelago, it’s essential for you to learn a bit of Bahasa Indonesia, when visiting Jakarta. Here are a few words and phrases in Bahasa that may come in handy in your trip!
Getting around
Other things to keep in mind
Things to do in Jakarta
Many stock markets around the world offer active managers room to generate superior returns. Among them, Japan stands out. Its equity market appears particularly inefficient. Reforms are also shaking up the once stagnant economy, creating new winners and losers in the corporate sector. That said, stockpicking still demands skill and discipline. We believe that managers will need nothing less than exceptional research and a long-term perspective to come out ahead.
Prime Minister Shinzo Abe’s reflationary policies have brought Japan’s stock market to a level of health not seen in decades. Even with the pullback earlier this year, the TOPIX has gained more than 70% in Japanese yen terms since end-2012, when ‘Abenomics’ started raising hopes for Japan’s economic recovery. Investors are rightly interested in gaining exposure to Japan. But how they do so matters. Adopting a passive strategy may seem attractive. An exchange-traded fund, for instance, would simply track a stock market index in Japan. But why should investors settle for market returns? Japan has traditionally been a stock picker’s market, and it still is. Active managers that are adept at identifying opportunities and managing risks stand a good chance of beating the index over time. The sheer size of Japan’s stock market makes it a fertile hunting ground. It is the third-largest in the world by market capitalisation (US$5.2 trillion) and comprises more than 3,800 listed companies. But there are more reasons why conditions in Japan favour an active approach. Information advantage Japan’s stock market appears highly inefficient. Mispricing opportunities can be captured by active managers armed with superior research and insights. What drives stock market efficiency? Research coverage is key. The more analysts there are following a company, the faster information is likely to be shared. In that respect, Japan trails other developed markets like the US and UK significantly. On average, 12 analysts follow each company in the Nikkei 225 index, compared with 22 for the S&P 500 Composite Index and 21 for the FTSE 100 index.1 Research coverage tends to be even thinner for small- and mid-cap companies in Japan (see Exhibit 1). After the global financial crisis, many securities houses cut their research in this space to focus on larger companies instead. Within the electric appliances industry, for example, as many as 12 major securities houses track conglomerate Hitachi. But just two follow commercial kitchen equipment maker Hoshizaki. Small firms, big reach Japan’s small- and mid-cap sector is also home to numerous quality companies with leading positions in niche industries. This means there are ample opportunities for extensive bottom-up research to pay off. Hoshizaki is a case in point. It receives little analyst coverage, yet it dominates the market for ice makers both domestically and abroad. Its energy-saving technology is a key competitive advantage as it eyes a bigger slice of the market for other appliances like refrigerators. Likewise, few investors may have heard of Sysmex. But it is the world’s leading supplier of blood tests, ranking above healthcare giants such as Abbott. Over the years, Sysmex has gained market share with its highly efficient medical diagnostic tools and is pursuing further growth across various geographies and product lines. Many small- and mid-cap companies trade at a discount to the market, making them seem even more attractive. But it pays to be careful. Certainly, some companies are undervalued because the market has overlooked them. But there are also those that simply have poor prospects. Active managers make a real difference when they can separate value finds from value traps. Abenomics effect In recent years, Abenomics has become a chief driver of investment opportunities in Japan, across companies large and small. Part of the agenda involves long-term reforms that are difficult to price into the stock market. This makes Japan a prime venue for forward-looking stock pickers that can identify companies poised for change. Already, new corporate governance measures are starting to have an impact. They take aim at low profitability, ineffective boards, and other forms of poor corporate behaviour that have undermined investor confidence for years. Most companies that pledged to adopt these measures have been rewarded by the stock market. But anticipating which companies will do so is no mean feat. Local insights are critical. Knowing a company’s financials is one thing, but understanding its culture and focus is quite another. It takes on-the-ground research, including regular meetings with top executives, to discern management’s views on Abenomics and detect potential changes in corporate direction. Some companies that took steps to shape up were once seen as unlikely reform candidates. Fanuc, a world-leading industrial robot maker known for its reticence, surprised the market when it raised its dividend payout ratio and proposed share buybacks last year. Still, overhauling corporate mindsets across Japan will take time. Its corporate governance still lags behind other developed countries. The discovery of accounting irregularities at electronics group Toshiba last year is a reminder of the gaps that exist. Active managers that can harness research to spot – and avoid – questionable firms have a valuable role to play. Risk management Indeed, limiting losses matters. But a passive approach provides no protection in this regard: investors tracking an index fully capture the market’s decline. Passive investors are also vulnerable to unintended exposures. In February 2011, for example, investors mirroring the MSCI Japan Index would have had a 1.43% exposure to Tokyo Electric Power (TEPCO), whether they were positive about the electricity provider or not. It was then the ninth-largest company in the index. In March 2011, a massive earthquake set off a nuclear disaster at TEPCO’s power plant in Fukushima. As the company sank into the red, its share price plummeted. Today, TEPCO makes up just about 0.19% of the index2. In contrast, an active strategy can better protect against downside. The most successful managers consciously manage their exposures and invest according to their strongest convictions – not the index. They have the flexibility to avoid companies in the index with lofty valuations, or invest in non-index companies that show resilience. They can also hold cash to preserve capital during downturns. In fact, it is often during broad market declines that these managers deliver exceptional value. Selecting an active manager Historical data present a compelling case for long-term active investing in Japan. Over five-, 10- and 15-year periods, the median return from Japanese equity active managers handily outpaced the TOPIX (see Exhibit 2). Capital Group’s Japan Equity strategy also beat the TOPIX to rank within the top quartile of the universe over its lifetime. Of course, not all active managers beat the index in the long term. It is therefore crucial for investors to identify those with the qualities to come out ahead. Strong research skills are a prerequisite for success, especially in Japan. Given the stock market’s inefficiency, quality research goes a long way towards uncovering attractive opportunities. This is why we commit huge resources to mine for insights on the ground. Our industry analysts research companies from the bottom up and maintain frequent communication with managements. They monitor not just companies based in Tokyo, but also lesser known firms in other parts of Japan. For the US, the second half of 2016 was a tale of two economies, with a strong domestic economy and weaker industrial sector. These trends are largely unchanged, but are now set against a very different political backdrop. While the impact of Donald Trump’s election as US president remains unclear, the improving economy should be supportive of US equities in 2017.
One economy, two inflation levels Robust US consumer spending continues, with indicators showing encouraging data for areas such as retail, housing and auto sales. However, this sits alongside a relatively lacklustre industrial sector, driven by two factors: 1. Weak export growth because of sluggish non-US economic activity and a strong US dollar. 2. The collapse of the US energy sector, which followed the sharp decline in energy prices. This split economy subsequently led to different levels of inflation in services and goods. As shown in the first chart below, service prices (which are largely determined by domestic economic conditions) have been rising around 3%, while goods prices (which are more a function of global economic conditions) have been flat or falling. What this means for the Fed The bifurcated nature of the US economy presented the US Federal Reserve (Fed) with a challenge: how to account for the fact that one half was growing at a rate better than expected while the other was showing the opposite trend. In response, the Fed chose to raise interest rates in December, while its rate-setters forecast further rises in 2017, contingent upon positive incoming economic data. We anticipate, however, that if additional rate rises do take place in 2017, these will be small and the ‘lower for longer’ scenario will remain intact. Strengthening macroeconomic conditions In a positive development, the two headwinds facing the industrial sector in 2016 have abated. Energy prices have rebounded, bolstered by the agreement between OPEC and other oil-producing nations to cut oil production. At the same time, the US dollar has weakened since the beginning of the year. This should lead to the industrial sector posting stronger growth rates in 2017, and in turn allow overall US economic growth to reaccelerate to a rate of 2%-2.5%, which we saw after the recession ended in mid-2009. The Trump factor and policy uncertainty The big change for the US has been in the political arena. President Trump’s bold proposed policies have already affected markets in anticipation of their implementation, but much remains uncertain. If Trump’s fiscal policies were to be fully implemented, we could see stimulus reaching a level of around 3% of GDP, which may be problematic in the longer term. US unemployment is now below 5%, which is what most economists consider to be the economy’s natural rate. As the unemployment rate has moved further below 5%, wage growth has accelerated in a typical way. In past cycles, wage growth has accelerated every time the unemployment rate has fallen below 4%. If the economy does 3 indeed reach the 2%-2.5% growth rate, and there is a further 1%-1.5% of additional stimulus in 2017, the unemployment rate would likely continue to fall further, triggering a further acceleration in wage growth. This would result in a stronger economy in 2017 as consumers benefit from wage growth, but it may also cause the Fed to respond more aggressively than what the markets have currently priced in, by raising interest rates higher and faster. Higher US interest rates would likely lead to higher bond yields, albeit within limits. Despite rising since the election, real yields have remained very low, at just above zero. This seems inconsistent with an expected economic growth rate of 2%-2.5% plus additional stimulus. These low yields are likely a by-product of policies implemented by other central banks around the world. Quantitative easing, by which central banks create money to purchase bonds, has directed vast volumes of money to the US Treasury market, driving bond prices higher and yields lower. While the US may have ceased its bond-buying programme, other markets, including the EU, have continued theirs. So while we can expect higher US Treasury yields, there will probably be a limit to how high they go, making them unlikely to pose a risk to the economic activity of 2017. The costs of economic stimulus Before the presidential election, the Congressional Budget Office had forecast that the federal debt-to-GDP ratio would increase over the next decade, reaching around 80% by 20251. However, if Trump’s proposals were fully implemented, that ratio would exceed 100% during that period2, reaching the same levels as in countries affected by the European debt crisis countries. If the growth in US debt continues along this trajectory, concerns about debt sustainability could increase over the next decade. This, coupled with a less favourable supply-and-demand balance within the Treasury market, could ultimately put upward pressure on yields. However, these are potential areas of concern that will have an impact beyond 2017. The other key area of concern for the US economy is Trump’s policies on trade. There are currently trillions of dollars of goods that flow into and out of the US economy on an annual basis. Should significant tariffs on imports be levied, US consumers would lose purchasing power, while other countries could implement tariffs in retaliation. The result would be much higher prices for US consumers and so reduced consumer spending, as well as dampened export growth. Finally, there are well-entrenched global supply chains that rely on the relatively free movement of goods between countries. To disrupt those supply chains would no doubt have a negative impact on economic activity. Again, however, none of these outcomes are likely to play out in 2017, but rather in 2019 or 2020. Realistic expectations There are significant obstacles that President Trump would have to face should he push for his full proposed stimulus and policies. Firstly, many of the policies would require congressional approval, which is not guaranteed. Even if they were approved, it would then take time to implement them. For example, a large infrastructure spending package would take a significant amount of time to execute as projects have to be identified and resources mobilised. The same goes for trade policies. A supportive backdrop for US equities remains despite uncertainties The US equity market currently appears fully valued, with the price-to-earnings ratio at a level that has rarely been exceeded. As a result, we believe a reasonable expectation is for total return over the next 12 to 18 months to be driven by a combination of earnings growth and dividend yield. Fortunately, with an economy that is improving, an industrial sector that is recovering and the possibility of corporate tax cuts, the outlook for US earnings is positive. In our view, it is also reasonable to expect solid earnings growth over the next 12 to 18 months and, if you factor in dividend yield on top of that, there is the potential for positive equity market returns as we go through 2017 and into 2018. |
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