Tail Risks Are Getting Fatter - Title Image

Tail Risks Are Getting Fatter

While the U.S. economy remains on solid footing, exogenous risks threaten asset values, market confidence, and the strength of the U.S. economy.

August 20, 2018


Fixed Income Outlook video

Brian Smedley and Adam Bloch share insights from the Third Quarter Fixed-Income Outlook


Fixed-Income Outlook

Third Quarter 2018

Here are the key takeaways from our latest Fixed-Income Outlook report:

  • General investor confusion prevails as the mid-2018 market theme. Investment-grade corporate bond spreads are wider while high-yield corporate bond spreads are tighter since 2017.
  • While the U.S. economy remains on solid footing, tail risks are getting fatter.
  • These risks include the possibility of an inflationary trade war, increasingly restrictive Federal Reserve policy, a potential fall budget showdown, instability in Europe and emerging markets, saber-rattling with Iran, and the consequences of the midterm elections.
  • The markets have reflected this uncertainty, evidenced by spasms of volatility and repricing in credit markets.
  • The situation calls for a duration barbell, a move up in credit.
 
 
Important Notices and Disclosures

Investing involves risk, including the possible loss of principal. This material is distributed or presented for informational or educational purposes only and should not be considered a recommendation of any particular security, strategy or investment product, or as investing advice of any kind. This material is not provided in a fiduciary capacity, may not be relied upon for or in connection with the making of investment decisions, and does not constitute a solicitation of an offer to buy or sell securities. The content contained herein is not intended to be and should not be construed as legal or tax advice and/or a legal opinion. Always consult a financial, tax and/or legal professional regarding your specific situation.

This material contains opinions of the author or speaker, but not necessarily those of Guggenheim Partners or its subsidiaries. The opinions contained herein are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. No part of this material may be reproduced or referred to in any form, without express written permission of Guggenheim Partners, LLC. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information. Past performance is not indicative of future results.

© 2018 Guggenheim Partners, LLC. All rights reserved. Guggenheim, Guggenheim Partners and Innovative Solutions. Enduring Values. are registered trademarks of Guggenheim Capital, LLC.


FEATURED PERSPECTIVES

Forecasting the Next Recession: Will Rate Cuts Be Enough? - Featured Perspectives
September 17, 2019

Forecasting the Next Recession: Will Rate Cuts Be Enough?

History shows that once our recession forecast model reaches current levels, aggressive policy can delay recession, but not avoid it.

Looking Past the Liquidity-Driven Rally - Featured Perspectives
August 22, 2019

Looking Past the Liquidity-Driven Rally

Credit spreads could get tighter in this liquidity-driven rally, but history has shown that the potential for widening from here is much greater.

The Fed's Sugar High - Featured Perspectives
July 29, 2019

The Fed's Sugar High

Rational immigration policy, not rate cuts, is the way to avoid recession.


VIDEO

Fixed-Income Outlook 

Third Quarter 2019 Fixed-Income Outlook

Portfolio Manager Adam Bloch and Matt Bush, a Director in the Macroeconomic and Investment Research Group, share insights from the third quarter 2019 Fixed-Income Outlook.

Solving the Core Fixed-Income Conundrum 

Solving the Core Fixed-Income Conundrum

Anne Walsh, Chief Investment Officer for Fixed Income, shares insights on the fixed-income market and explains the Guggenheim approach to solving the Core Conundrum.







© 2019 Guggenheim Partners, LLC. All rights reserved. Guggenheim, Guggenheim Partners and Innovative Solutions. Enduring Values. are registered trademarks of Guggenheim Capital, LLC.