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Risk and Relative Value in a Time of Change

In our fourth quarter 2016 report, investment team leaders discuss market conditions heading into a new administration and likely Fed rate hikes.

December 14, 2016


Report Highlights

The surprise end to the fractious U.S. election season leaves many questions unanswered, but we remain alert to the possible impact of resurgent fiscal policy. Several market positives should support asset performance into 2017. The domestic economy just turned in the highest growth rate in two years, early indications point to a strong Christmas selling season, corporate earnings are turning higher or recovering, and the energy sector is stabilizing with the oil market recovery. An investor’s best option in an environment like this is to sell into strength and buy on weakness.

  • We believe it is highly likely the Fed will raise rates three, and possibly four, times in 2017.
  • A tightening labor market, rising inflation, and a new administration suggest higher economic growth and inflation, upward pressure on rates, and Fed rate hikes.
  • We continue to see strong demand from foreign investors hungry for yield supporting the investment-grade market.
  • Spreads on collateralized loan obligations have tightened significantly, particularly as investors have been allocating more to floating rate assets.
  • Rising pension liabilities remain a concern, but strong technicals support the municipal market.
 
 

FEATURED PERSPECTIVES

September 17, 2020

Guggenheim’s 2020 Election Portfolios

Our portfolios are constructed based on the key aspects of each candidate’s policy agenda that we believe will move markets. We will publish daily updates in the run up to the presidential election on Nov. 3, 2020.

August 19, 2020

The Impact of the Fed’s Corporate Credit Facilities

As a result of the Federal Reserve’s efforts to shore up credit markets, the leveraged credit sector has delivered stellar performance since the lows in March.

July 29, 2020

China Matters More Than Ever

Cooperation and understanding between China and United States is vital as global economic and environmental challenges mount.


VIDEO

Third Quarter Outlook 

Third Quarter 2020 Outlook

Brian Smedley, Head of Macroeconomic and Investment Research, and Portfolio Manager Steve Brown share their outlook for the third quarter 2020.

2020 Macro Themes 

Macro Themes for 2020

Brian Smedley, Head of Macroeconomic and Investment Research, discusses major trends likely to shape markets this year.







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