I recently listened to a PGIM webinar on credit risks and deteriorating lending standards. It was so good, I wanted to share some of the comments and key take-aways with you. Importantly, PGIM is one of the largest non-bank lenders in the world, so its insights are valuable.
The US...
The VIX1 is signaling uncertainty is on the rise.
In our view, while recent earnings reports look fine, on closer inspection, companies report stress below the surface and concerns are growing that AI-related capex may have gotten ahead of itself.
Investors face the challenge of adjusting from a...
Markets have been volatile lately, marked by sharp declines in global equity indexes, bond yields and commodity prices.
Stephen Dover, Chief Market Strategist, Head of Franklin Templeton Institute says, "The Franklin Templeton Institute is following market conditions and the fundamentals closely. Across all global regions and major asset classes, our...
Despite the focus on credit spreads, yield has proven to be a more reliable indicator of high yield market attractiveness. With a strong correlation between starting yield and five-year forward returns, and a historically high-yielding environment coupled with low projected default rates, the high yield asset class is well-positioned...
From Guy Stear, Head of Developed Markets Strategy at the Amundi Investment Institute
Three factors that have contributed to the shift in sentiment
▪ Market reversal: Global stocks suffered big losses, with Japan's Topix index racking up its largest one-day drop in more than three decades. European and US stocks also fell,...
Janus Henderson Investors Portfolio Manager Daniel Graña notes that the most assertive of Donald Trump's economic proposals could range from being unhelpful to harmful for emerging markets.
Key takeaways:
The tendency toward deglobalisation could accelerate if Trump is not merely using tariff proposals as a negotiating tactic with trading partners.
...
By RJ Gallo, Senior Portfolio Manager, Fixed Income at Federated Hermes
With the Fed expected to begin its easing cycle later this year, bond markets appear poised to generate income to a degree not seen since before the 2008-09 financial crisis.
While expectations around the size of cuts this year have...
Key points:
Are investors asking the right questions?
Rate cuts are not a panacea for broken businesses.
What really matters are fundamentals.
Are these the right questions?
Following the inflation ambush in 2022, elevated inflation prints have fallen, as has the volatility of inflation, which has whipsawed investors.
In late April, I...
From Matthew Macreadie, Executive Director, Credit Strategy and Portfolio Management - IAM Capital Markets
Australia’s inflation problems may see 50bps of further monetary tightening, but for investors it really depends on where you are on the credit pendulum.
Given Australia’s credit market is largely investment-grade, higher interest rates are...
By Paul Benson, Head of Systematic Fixed Income at Insight Investment
We believe investors should consider locking in high yield bond yields ahead of the rate-cutting cycle.
Some investors tell us they are waiting for credit spreads to widen, but we offer three reasons this could be the wrong call.
Yield is...
