Subject: FW: Firmwide Strategy Call: Friday April 15th ("The Investment Landscape Post QE2" - Soss, Sweeney, Lantz, Garthwaite, Siva) Client ccall at 10:00am (EDT)
From: "Neil Callahan" <[email-masked]>
To: "Firmwide" <[email-masked]>
Date: Wed, 13 Apr 2011 12:25:44 -0400
List-Id: <all.rosemontseneca.com>

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Neil Callahan

Rosemont Seneca

401 Greenwich Street, Suite 400 | New York NY 10013 | 212-933-9965 |
212-796-4037

1010 Wisconsin Avenue, Suite 705 | Washington DC 20007 | 202-333-1880

917-945-9516 (mobile) 

866-749-8879  (fax) 

From: Jacknow, Bret [mailto:[email-masked]] 
Sent: Wednesday, April 13, 2011 12:24 PM
To: Jacknow, Bret
Subject: Firmwide Strategy Call: Friday April 15th ("The Investment
Landscape Post QE2" - Soss, Sweeney, Lantz, Garthwaite, Siva) Client ccall
at 10:00am (EDT)
Importance: High

Please find attached details for our upcoming Firmwide Strategy Call. 

____________________________________________________________________________
______________ 
<<CCall flyer 4-15-11.pdf>> 

       
Picture (Metafile)        The Investment Landscape Post QE2 

Recovery Remains on Track Despite Near-Term Headwinds, Focus on Emerging
Market Equities 

Friday, April 15, 2011 - 10:00 AM EDT  
               
Date:                        

Friday April 15 

Time: 
10:00AM EDT 

Dial-in numbers 
Dom: (800) 762-3128 
Int'l:   (706) 679-6062 

Replay: 
Dom:  (800) 642-1687 
Int'l:    (706) 645-9291 
Available for 2 weeks 

Conference ID Number: 57986003 
        Speakers:  
Neal Soss - Chief Global Economist 
James Sweeney -  Fixed Income Global Strategist 
Carl Lantz - U.S. Interest Rate Strategist 
Andrew Garthwaite - Chief Global Equity Strategist 
Sakthi Siva - Head of Asia-Pacific and Emerging Markets Equity Strategy
        Call Highlights: 

Economics:

.         Our base-case forecast is that the Fed will complete its $600bn in
QE2 purchases by mid-year, as planned, and begin the long journey toward
normalization in 2012. 

.         Specifically, we see the FOMC altering the "extended period"
language at the start of 2012 with rate hikes beginning in 2H 2012.

.         The Fed has more policy tools at its disposal than ever before.
However, even if it gets the timing right, the road to policy normalization
is likely to be anything but smooth.

Fixed Income Strategy:

.         On the whole we are cautious on risky assets in the near term but
we don't expect the end of QE2 and emerging macro threats to derail the
overall recovery. 

.         The US recovery is broadening out nicely with positive signs
emerging from the labor market, services spending, and even household
formation. Outside the U.S., the recovery is now sufficiently advanced that
many central banks are now in tightening mode, due as much to growth as
inflation. 

.         Global industrial production momentum peaked in Q1 and is now
falling. We expect emerging markets and Japan to begin recovering relatively
soon, but the U.S. and Europe will take a little longer. 

Rates Strategy:

.         The market is set up for the end of QE - money managers, fast
money, and primary dealers are positioned short (duration exposure, option
sentiment, and dealer holdings), after having been net long going into the
new Fed purchase program

.         We expect yields to be contained post QE, with a squeeze to
slightly lower rates likely (in line with the end of prior QE).

.         We believe a broad range of investors will pick up the slack after
the Fed stops buying.

Global Equity Strategy:

.         We believe that near term we will get consolidation in the
near-term (market declines of up to 5%) but not a major correction.
Strategically we remain positive on equities. 

.         We think that the end of the carry trade is much more important
that the end of QE 2.

.         We think investors should be overweight Global Emerging Markets
(GEM).

Asia-Pacific and Emerging Markets Equity Strategy:

.         We continue to be a buyer of dips in GEM. In 2004, emerging
markets bottomed 3-4 months ahead of the peak in inflation, and we expect
the peak in July 2011.

.         Four key differences between end of QE 2 and end of QE 1 are: 1)
valuations, 2) degree of net foreign buying, 3) more sustainable US recovery
and 4) TED/ EMBI spreads.

.         Key Overweights are Korea, Russia, China and cheap cyclicals.
Underweights are India (crowded trade) and Consumer Staples (inability to
pass on raw material costs).   

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