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Fixed-Income Outlook: 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   |    By Scott Minerd


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

February 15, 2017

Fixed-Income Outlook: Assessing Value in a Faith-Based Rally

Our first quarter 2017 report reflects expectations for strong risk-asset performance as President Trump’s economic agenda takes shape.

January 23, 2017

10 Macro Themes to Watch in 2017

Ten charts illustrate the global macroeconomic trends most likely to shape the investment environment in 2017 and beyond.

January 13, 2017

High-Yield and Bank Loan Outlook: Focus on Floating Rate

Conditions bode well for credit, but a more aggressive Fed and geopolitics could bring volatility. 


VIDEO

Long-Term Macroeconomic Outlook 

Our Long-Term Macroeconomic Outlook

Scott Minerd, Global Chief Investment Officer, sheds light on U.S. economic strength, headwinds for the EU, and which emerging markets look attractive for long-term investors.

Strategies for a Low-Yield Environment 

Strategies for a Low-Yield Environment

Scott Minerd, Global Chief Investment Officer, and Anne Walsh, Assistant Chief Investment Officer, Fixed Income, share insights on investing in unprecedented market conditions.







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Guggenheim Investments represents the investment management businesses of Guggenheim Partners, LLC ("Guggenheim"), which includes Security Investors, LLC ("SI"), Guggenheim Funds Investment Advisors, LLC, ("GFIA") and Guggenheim Partners Investment Management ("GPIM") the investment advisers to the referenced funds. Securities offered through Guggenheim Funds Distributors, LLC, an affiliate of Guggenheim, SI, GFIA and GPIM.

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