By Greg Zappin | October 12, 2017
The daily record highs in the equity markets and the relentless grind tighter in the credit markets elicit both feelings of marvel and trepidation. As you can see in the chart above, revenue and EBITDA are growing at strong levels across the companies in the S&P 500. The uneasy feeling in the fixed income market comes from the disparity between valuations at or near their post crisis tights versus the constant barrage of negative news outside of Wall Street – North Korean war talk, devastating hurricanes and fires, mass shooting in Las Vegas, and dysfunction in Washington. For most high-yield investors, waiting for the big pullback by sitting in cash is not an option, as the active manager gets compensated to take risk and outperform an index. It’s easy to get distracted in this type of market. When I sift through all the noise, I have found the best way to construct a credit portfolio is to rely on business fundamentals as a guiding light.
By Jen Ripper | September 28, 2017
Nearly ten years ago, the Federal Reserve (Fed) embarked upon what became known as quantitative easing as a way to combat the financial crisis of 2008. With the Fed Funds rate near zero percent, the Fed announced it would purchase U.S. Treasury notes and mortgage-backed securities. After three rounds of quantitative easing, the Fed ended its purchases in late 2014. During that time, the Fed has purchased nearly $1.78 trillion of agency mortgage-backed securities (MBS).
By David O'Malley | April 10, 2017
Last week’s March employment data release disappointed market expectations as the economy added 98,000 jobs–about 100,000 less than estimates and the average gains experienced over the last six months. Average hourly earnings remained stable at a 2.7% year-over-year gain. On the positive side, the unemployment rate fell by 0.2% to 4.5% in March, which is the lowest rate since 2007.
By James Faunce | April 28, 2016
Corporate mergers and acquisitions (M&A) continue to be a significant driver of the investment grade corporate bond market new issue calendar. As shown in today’s chart, M&A activity made up almost 35% of non-financial issuance in 2015, making it an all-time record total supply year. 2016 is on a similar pace.
By Mark Heppenstall | January 20, 2016
The U.S. economy has been one the few bright spots across the globe, as most other developed and emerging market economies performed below expectations.
By Zhiwei Ren | September 24, 2015
We have all seen the benefit of Quantitative Easing (QE) when it was coming in: It reduces market volatility and makes holding financial assets much more rewarding. What will happen to the market when QE starts to come out?
By Mark Heppenstall | July 9, 2015
What effect might the debt crises in Greece and Puerto Rico, and the downturn in the Chinese stock market, have on investments globally?
By Zhiwei Ren | June 18, 2015
Currently, the Fed’s major concern is not inflation but disinflation. As a result, assets that tend to outperform during inflationary environments are all trading at historically attractive levels.
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High-Yield bonds are subject to greater fluctuations in value and risk of loss of income and principal. Investing in higher yielding, lower rated corporate bonds have a greater risk of price fluctuations and loss of principal and income than U.S. Treasury bonds and bills. Government securities offer a higher degree of safety and are guaranteed as to the timely payment of principal and interest if held to maturity.
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