/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

January 24, 2019

Amber Lights Flash at Davos

Should the mood this year at Davos prove once again to be a contra-indicator, this may be the signal that the economy is likely to re-accelerate soon and that the party in risk assets continues.

January 18, 2019

Up the Escalator, Down the Elevator

An uptick in corporate defaults in 2019 will mark the beginning of a prolonged period of stress in the corporate bond market.

January 16, 2019

10 Macro Themes to Watch in 2019

Ten charts illustrate the macroeconomic trends most likely to shape Fed policy and investment performance in 2019 and beyond.


VIDEO

Forecating the Next Recession 

Forecating the Next Recession

Global CIO Scott Minerd and Head of Macroeconomic and Investment Research Brian Smedley provide context and commentary to complement our recent publication, “Forecasting the Next Recession.”

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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