May 16, 2017
With spreads tight in investment-grade and high-yield corporate bonds, loans, structured credit, and Agency mortgage-backed securities, we expect an uptick in volatility this summer. The Federal Reserve is set to continue to raise interest rates—and at a faster pace than that which is priced in the market—which means positioning for a flattening yield curve will remain a major theme in our portfolios. Our view on the global macroeconomic environment is positive, which should support strong credit fundamentals for several years. We are also focused on the legislative complexities of passing President Trump’s pro-growth agenda. Failure to put his plans into effect in a timely manner may cause markets to realize that the Trump rally is long on promise and short on delivery.
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FEATURED PERSPECTIVES
Investors’ reach for yield puts downward pressure on 10-year Treasury rates, likely rendering the current yield unsustainable.
Our positive 2021 economic outlook, combined with better-than-expected company fundamentals, supports strong credit performance and spreads.
The relative calm we feel in the markets right now isn’t the end of the storm, it is just the eye.
VIDEO
Brian Smedley, Head of Macroeconomic and Investment Research, and Portfolio Manager Steve Brown share their outlook for the third quarter 2020.
Scott Minerd, Chairman of Investments and Global CIO, discussed his outlook for markets and the economy with CNBC’s Brian Sullivan during the Milken Institute 2020 Global Conference.
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