Quarterly Investment Perspective from the Capital Markets Committee
Global economic growth picked up in the first quarter of 2010, although expectations for future growth remain somewhat muted when compared with prior post-recessionary periods. Estimates for real gross domestic product (GDP) in 2010 range from approximately 1% growth in the United Kingdom and eurozone countries to nearly 10% in China. Concerns about the sustainability of recovery in countries that turned the corner last year gave way to rising confidence as manufacturing activity improved, export trade was revived and employment began to stabilize. Government stimulus programs around the world provided support that many local and regional markets needed in order to begin the healing process. As these stimulus programs wind down, attention will shift to the consumer's ability to step up spending on goods and services. Business activity will also be closely monitored as further economic recovery will center on increased revenues, improved profits and job hiring. Deficits that have accumulated as the result of government stimulus programs, private sector bailouts and lost tax revenue may weigh on economies and markets in 2011 and beyond.
Optimism rose during the first quarter as confidence in a global economic recovery strengthened. Stock prices realized healthy gains in the United States and throughout much of the globe, with the notable exception of Europe in which stocks lost approximately 2.3% during the first three months of the year. A strong dollar reduced most foreign investment returns for U.S.-based investors. Japan's stock market also generated strong results, up approximately 8.0% from the beginning of the year through the end of March. Much of the gains generated by Japanese equities were also a result of a strong yen.
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RiverSource®, Seligman® and Threadneedle® mutual funds are distributed by Columbia Management Investment Distributors, Inc. (formerly known as RiverSource Fund Distributors, Inc.), member FINRA and managed by Columbia Management Investment Advisers, LLC (formerly known as RiverSource Investments, LLC). Threadneedle mutual funds are subadvised by Threadneedle International Limited, an affiliate of Columbia Management. Seligman is an offering brand of Columbia Management.