Our Franklin Templeton Investment Solutions team suggest broader supply disruptions that continue to hold consumer price inflation at extremely elevated levels, are key factors fueling aggressive rate hike cycles across developed markets.Not losing sight of ChinaLast month inAllocation Views, we asked ourselves “where are the pain points that might trigger a wider market reaction?” With the passing of another month, in which investor caution increased, it appears that part of the trigger was simply more of the same—uncertainty about inflationary developments, policy responses, and their interaction with economic growth and corporate earnings. The ongoing war in Ukraine certainly isn’t helping these dynamics, but it seems to have moved into a phase where it is having a chronic impact on inv

Despite increased volatility due to the Russia-Ukraine war and rising interest rates, Franklin Equity Group’s Jonathan Curtis sees compelling opportunities within high-quality technology companies in an increasingly digital world.Markets have been exceptionally volatile since mid-November, as investors have digested the impacts of rising inflation, pending US Federal Reserve actions, the potential end of the COVID-19 crisis, and the tragic situation in Ukraine. Rising interest rates have reduced what investors are willing to pay for growth and “cash-in-the-future” businesses, and may increase the risk of recession amid the inflationary backdrop of rapidly climbing fuel and food prices.Even though rising rates reduce what investors are willing to pay for higher-growth companies, they are al

Gold, Inflation and Geopolitical TensionsMany investors see gold as a sort of haven in times of turmoil, and prices have surged amid Russia’s invasion of Ukraine. Franklin Equity Group Portfolio Manager Steve Land outlines how his team approaches investing in the metals sector, and why smaller gold producers in particular look appealing.OverviewGold bullion—typically seen by many investors as a haven in times of international tensions—climbed above US$2,000 per troy ounce in March as investors sought hedges from inflation and political turmoil. On March 8, gold futures settled just above US$2,043 an ounce, not far from US$2,069 an ounce, the highest end-of-day price based on records dating back to January 1975.1Gold has outperformed other perceived haven assets in February and March, inclu

The US Federal Reserve is turning increasingly hawkish—hiking rates fast enough to slow inflation while maintaining economic growth will be a monumental task. The Franklin Templeton Investment Solutions team opines on what to expect from the Fed and gauges whether it is already behind the curve.Since we published “The Fed: Walking a Tightrope in 2022” in late January, Russia invaded Ukraine and the Federal Reserve (Fed) raised interest rates for the first time since 2018. As the Fed begins another hiking cycle, we provide our updated thoughts. The Fed’s b

Are Central Banks Too Slow to Tackle Inflation?Are the reserve banks too slow in tackling inflation? Will inflation level off by itself? Will rising rates cause a recession? I sat down with Franklin Templeton Fixed Income Chief Investment Officer Sonal Desai and Western Asset Portfolio Manager and Research Analyst John Bellows to discuss the investment landscape considering today’s geopolitical and economic challenges.Here are some of their key points: Sonal remains convinced the Federal Reserve (Fed) is behind the curve in raising interest rates. She warned about three months ago the Fed’s move toward hawkishness is a direct result of the persistence of inflation. Looking at the trends over the past three, six and 12 months, she thinks inflation could end the year between 5% and 7%. John

How Technological Innovation Will Drive a More Inclusive EconomySome believe that technological change is driving economic inequality. We believe that innovation can, in fact, create a more inclusive and equitable global economy with changes that will far outlast the pandemic and our recovery from it.The world has changed in incalculable ways in the past two years. Two phenomena have been especially notable to us at Franklin Templeton: Technological innovation has accelerated exponentially, and there has been an increased awareness of and concern about economic inequality.Some believe that technological change is driving economic inequality. We believe that innovation can, in fact, create a more inclusive and equitable global economy with changes that will far outlast the pandemic and our

Where Disruptors Will Make a Difference in 2022ClearBridge Investments believe the most promising areas for growth through innovation will include software and service providers as well as platform companies outside technology.PreviewAfter a multiyear run for the valuations of the market’s fastest-growing companies, the prospects of higher interest rates at the end of 2021 sent a shock wave across this cohort of the equity market. While highly profitable mega cap growth stocks continued to thrive late in the year, growth companies down the capitalization spectrum experienced challenging performance. These smaller, rapidly growing companies tend to be less profitable, and their valuations are supported by future years’ earnings. As language from the Fed pivoted from an accommodating to a ti

Disruptions Redefine Risk and Opportunity in 2022Global investment outlook: The ramifications of the pandemic will likely continue to reverberate in 2022, but what does that mean for investors? Our investment teams explore key themes in equity, fixed income and real estate.Stephen Dover, CFAChief Market Strategist, Franklin Templeton Investment InstituteINTRODUCTIONWhen news of COVID-19 first spread, few of us could have imagined how disruptive the pandemic would be, how it would impact nearly every aspect of our daily lives—and that we would still be dealing with it two years later.The ramifications of the pandemic will continue to influence capital markets in 2022. I gathered eight of our investment managers to discuss investment themes and risks they are focused on. Here are highlights

The tug of war between value and growth stocks will almost certainly persist, but there are long-term opportunities in growth stocks globally.John RemmertPortfolio Manager, Franklin Equity GroupAs we emerge from the pandemic and move past its effects on global supply chains, working environments and business practices, we believe markets will likely continue to exhibit the “one step forward, one step back” behavior that characterized the last two quarters of 2021. We expect equity markets to remain constrained in early 2022 by the ongoing nature of the COVID-19 pandemic and the incremental waves caused by the highly transmissible Delta variant and the new Omicron strain. However, between higher vaccination rates and the advancement of promising new anti-viral drugs, the pandemic will

Franklin Equity Group Portfolio Manager Serena Perin Vinton discusses how her team thinks about environmental, social and governance (ESG) investing and the opportunities in investment-driven innovations levered to a more sustainable environment.Contributor: Serina Perin Vinton, CFA, Portfolio ManagerIn our view, managers need to be thinking holistically about ESG in today’s environment. The effects of climate change are significant, and we see them in the news near daily, with ever-growing wildfires in Western North America, hurricanes that retain their intensity long after landfall, and the shrinking Arctic Circle, just to name a few. As governments around the world seek to pass legislation and regulatory change to limit greenhouse gas emissions, their actions have implications across in