/institutional/perspectives/portfolio-strategy/q3-2018-fixed-income-outlook

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.
 
 
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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.


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VIDEO

Fourth Quarter 2019 Fixed-Income Outlook 

Fourth Quarter 2019 Fixed-Income Outlook

Brian Smedley, Head of the Macroeconomic and Investment Research Group, and Portfolio Manager Adam Bloch share insights from the fourth quarter 2019 Fixed-Income Outlook.

Core Fixed-Income Conundrum 

Solving the Core 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.







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