Where does Calamos Investments believe the market and economy are going? What are the longer term implications of the Federal Reserve's actions? Calamos' July commentary provides their answers.
"Despite the rise in U.S. long-term interest rates, our global outlook remains one of cautious optimism. Many signs point to the U.S. being in a mid-cycle phase: recovery looks sustainable at this point, given the housing recovery and its contribution to the consumer wealth effect. U.S. consumer confidence and purchasing manager surveys both continue to be strong. We are prepared for continued choppiness in the equity markets; these up-and-down, rotational markets are characteristic of mid-cycle phases. But even so, the markets seem to be refocusing on fundamentals, and this is a tailwind for our active, high-conviction approach. History has shown that markets have discounted moderate increases in long-term interest rates, with stocks moving generally higher as strong economic activity rules the day. Valuations of U.S. equities are still compelling, despite the rise in rates."