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Finding Relative Value with One Eye on Global Central Banks 

Our third quarter 2016 report, details our current fixed-income strategy, economic outlook and where we see relative value.

August 17, 2016


Report Highlights

After the Brexit vote surprised the many market participants who had positioned themselves for the opposite outcome, the market panicked. Market stability—and then a rally—only arrived once central banks promised liquidity support. Looking ahead, it is likely that we will experience further volatility before the year is out. The situation in Europe and Japan is reaching a tipping point as policymakers decide whether to stand pat and wait for incoming data, or take more action as conditions worsen. Their decisions (and the Fed’s) carry significant investment implications.

Find out where our fixed-income investment team is finding relative value in a world of low and negative rates and uncertain monetary policy.

  • Our Macroeconomic Research team expects solid near-term growth in U.S. underpinned by strength in the consumer sector, but the Fed likely will remain on hold until December 2016.
  • Slow and steady economic growth, a cautious Fed, low interest rates, and improving oil market supply-demand fundamentals have created a favorable environment for fixed-income markets.
  • The global macroeconomic backdrop, and the central banks’ willingness to continue their accommodative policies, should support risk assets going forward.
  • Our oil price model calls for seasonal weakness in the second half of 2016 before prices rise to $55 by mid-2017.
  • We see value in energy and basic materials credits, as well as technology and media companies.
  • In securitized products, we continue to find value in new-issue aircraft lease transactions, and in collateralized loan obligations backed by loans to middle market companies.
 

FEATURED PERSPECTIVES

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Third Quarter 2022 Fixed-Income Sector Views

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VIDEOS AND PODCASTS

I Blame the Fed’s Forward Guidance for Market Instability 

"I Blame the Fed’s Forward Guidance for Market Instability"

Scott Minerd, Chairman of Guggenheim Investments and Guggenheim Partners Global CIO joins Bloomberg TV on Fed Day to discuss the Fed’s 75 basis point hike, and signs that the economy is already in recession.

Macro Markets Podcast 

Macro Markets Podcast Episode 20: For the Fed, the Devil Is in the Data; Agency MBS Update

U.S. Economist Matt Bush discusses the fast-moving economic data, and Managing Director Aditya Agrawal reports on developments in the Agency MBS sector.







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Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Partners Advisors, LLC, Guggenheim Corporate Funding, LLC, Guggenheim Partners Europe Limited, Guggenheim Partners Japan Limited, GS GAMMA Advisors, LLC, and Guggenheim Partners India Management.