Market Commentary

by Byron Wien

Blackstone is pleased to offer the following Market Commentary by Byron Wien to share his thinking on global economic developments, market insights and other factors that may influence investment opportunities and strategies.

Byron Wien is a Vice Chairman

  • Nov 02, 2012

    Four Major Problems

    The pace of the United States economy is improving from the disappointing performance of the first three quarters. Initial jobless claims have declined and both the manufacturing and the service sector purchasing manager indexes are above 50, indicating the economy is expanding. Automobile production is strong, housing is bottoming, and retailers are gearing up for a robust Christmas season. In Europe every effort is being made to hold the European Union together and keep the euro as the continent’s basic currency. Central banks in Europe and the United States are expanding money supply vigorously, but in spite of that, inflation is tame in the developed world and interest rates are low in the U.S., the U.K. and Germany. China is applying both fiscal and monetary stimulus to ensure a “soft landing.” In spite of the recent correction, the equity market in the United States is up in double digits, so why should I be worried?
  • Oct 22, 2012

    Webcast: Is the 2012 Market Ahead of 2013 Reality? With Byron Wien

    Listen to webcast, Thursday, October 25th
  • Sep 06, 2012

    A Constructive View as Summer Ends

    For several decades I have organized a series of “Benchmark” lunches on Fridays in August for serious investors who spend their summer weekends in eastern Long Island. About 75 attended the three sessions, including leaders in hedge funds, private equity, real estate and venture capital. There were many billionaires and many others whose net worth hasn’t quite gotten there, but whose views are widely respected throughout the investment community. For the past two years the mood has been decidedly downbeat, but, looking back on it, I have to wonder how much the performance of the equity market during the weeks leading up to the lunches had something to do with how the participants viewed the outlook. If you recall, the slogan “Sell in May and go away” worked pretty well in 2010 and 2011. This year, however, the United States market hit its recent low on June 1 and stocks traded higher during July and August.
  • Jul 12, 2012

    Webcast: Optimistic About the Outlook: Contrarian or Delusional? With Byron Wien

    Listen to webcast
  • Jul 02, 2012

    The Smartest Man is a Firedancer

    When the New Democracy party in Greece defeated the anti-bailout Syriza, I was anxious to learn what The Smartest Man in Europe thought of it all. The next day I flew across the Atlantic to meet him and we had a long discussion about the world financial outlook. Many of you remember The Smartest Man from earlier essays; I have been writing about him annually for more than a decade. He has been a friend for thirty years, and during that period he has shown an almost uncanny ability to see major events affecting the financial markets before other observers. Among these were the fall of Japan as an economic power in the 1980s, the economic changes in China and their significance the early 1990s, and the serious consequences of excessive borrowing in the developed world in the last decade.
  • Jun 05, 2012

    Into the Weeds of the European Debt Crisis

    I have just spent two weeks talking to our clients in Asia. Starting in Tokyo, I traveled to Seoul, Beijing, Hong Kong, Taipei, Singapore and Sydney. My objective was to better understand what was happening in the economies in the region, but I found that everyone wanted to talk about whether the European Union and the euro would survive. The Chinese were worried because Europe was an important market for them and everyone else was worried because their major exports were to China and if China slowed down seriously, they were in trouble.
  • Apr 03, 2012

    The Disbelievers

    One of my Ten Surprises was that the Standard & Poor’s 500 would reach 1400 sometime during 2012, and here we are at the beginning of the second quarter and it’s already there. When I wrote that, my objective was to have the most optimistic estimate among Wall Street strategists. I actually thought the S&P 500 could reach 1500 based on the generally achieved (but not last year) multiple of 15 times and operating earnings of $100. Estimates have been trimmed somewhat, but, at this point, I still think 1500 is likely. The real question is, “Why are investors so skeptical?”
  • Mar 05, 2012

    Where We Went Wrong

    Ever wonder how we got into this predicament? Academics and strategists have been analyzing our current financial situation endlessly, but I haven’t seen too much probing into the origins of our present problems. In my opinion, you probably have to go back to the end of World War II to understand how we got here. I think policy makers in the United States especially failed to recognize the significance of four important events that led to our current challenging set of circumstances.
  • Feb 03, 2012

    An Optimistic Outlook

    There is a nervous and gloomy mood out there. The Ten Surprises of 2012 have a positive tone, and for the past month I have been discussing them with our clients and others in large and small groups. Most investors believe the United States economy will grow at only 1% to 2% and the European sovereign debt crisis will remain unresolved, with Greece and possibly others being forced to withdraw from the Union. No progress will be made by Congress in reducing the budget deficit until after the November election. Emerging market economies around the world will slow, and we will have another difficult year for global equity market performance.
  • Jan 04, 2012

    The Surprises of 2012

    All this began to change in October. Data for the U.S. economy began to improve and the equity market moved back to where it had started the year. European leaders, recognizing the urgent need for a solution to the sovereign debt crisis, began to talk of a treaty change that would move the continent towards a fiscal union. By year-end the 2011 Surprises looked much better. A blogger, analyzing each of them and giving me partial credit for a few, came up with a score of 50%, which is consistent with my long-term average. Other reviewers were not so generous. My definition of a surprise is a market-influencing event that the average investor would assign only a one-out-of-three chance of taking place during the year, but that I believe is “probable,” i.e., that the event has a better than 50% chance of happening. Here is my review.