/perspectives/portfolio-strategy/fixed-income-outlook-finding-relative-value-with

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

September 21, 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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