• US/Iran/Iraq and the fixed income markets

    Fixed income markets are reacting to the recent developments in the Middle East. It is Day 2 for trading in the New Year and already we have seen a shift into flight-to-safety mode that warrants monitoring.

  • Outlook 2020

    We envision another year of positive economic growth and favorable markets, but correcting for evolving uncertainties surrounding the election and geopolitics keeps us agile.

  • Cash may be king but short-term investments might be prince

    We are once again in a lower-for-longer environment. The yield hunt sustains, driving up the price and down the yield of even lower-rated bonds.

  • Leveraged buyout primer

    Leveraged buyouts (LBOs) are perceived as an attractive vehicle for investors to create more value for shareholders.

  • The seas of corporate bonds and triple c's

    While the majority of fixed income asset classes offer lower average yields this year than last year, the US triple C corporates space remains an outlier.

  • Preferreds and interest rate uncertainty

    Just over a year ago, the bond market began to sell off on various fears that caused heightened perceived credit risk.

  • Fannie and Freddie update

    With the recent uptick in price, investors are asking questions about the legacy preferreds of Fannie Mae and Freddie Mac, which have not been paying dividends since 2008.

  • What is happening in the repo market right now?

    The repo market is a $2.2T short term borrowing and lending market, and is the underlying source for SOFR, LIBOR’s replacement when LIBOR sunsets by year-end 2021.

  • Now is the autumn of our discontent: Populism & bond market volatility

    We see this trend as a contributor to the elevated global economic and political uncertainty that creates bond market volatility.

  • Credit vs. interest rate risk: What you should own these days

    Given recent events, we will explore these two factors in fixed income investing to guide positioning for possible near-term events and what we think may be a strategy for the average investor.

  • US vs. China and the bond market reaction

    The combination of the Fed’s rate cut last week plus the US/China trade situation coming back into the forefront has caused a reaction across asset classes. We suggest investors use this bout of volatility as a reminder about the benefits of diversification.

  • High yield: When you come to a fork in the road, take it

    US high yield corporate bond total returns have exceeded all other major fixed income sectors year-to-date at 10.2% as of writing. With a more dovish Fed and a rate cut on the horizon, the reasons to buy high yield are there. At the same time, the reasons for rate cuts remind us that credit risk is an important factor in high yield corporate debt, and the catalysts for credit quality improvements may not exist.

  • Not so stressed out but testing the waters

    The Fed released its stress test results at the end of last month, with all the banks passing its quantitative and qualitative checks. While each individual bank’s credit quality has improved post-recession, questions about the strength of the broader financial system remain. What the Fed has bookmarked as potential problem areas is helpful in positioning against major market risks.

  • Where has all the Capex gone

    How companies spend their cash is an important consideration from a credit quality standpoint. In the current environment, companies have been doing more with less—a corporate strategy trend that developed in the post-recession era.

  • Tax swaps and tax loss harvesting

    Investors, who have been negatively affected by credit quality deterioration, market volatility, or asset class selloffs, may be interested in repositioning for the coming year. Tax swaps and tax loss harvesting are worth exploring, especially as a part of year-end tax planning.

  • Outlook 2019: Seeing the picture when the view is less than clear

    The outlook is complex with a myriad of issues that can influence the economic setting and financial market behavior. Much depends on the evolution of interest rates, trade, and the global economy.

  • Primer on TIPS

    Inflation has been low recently and medium-term expectations from central banks have been mixed. Nonetheless, hedging against the risk of inflation is important in portfolio construction, and treasury inflation-protected securities (TIPS) can offer a counterbalance to traditional fixed income securities. We present information on TIPS, as well as potential opportunities for the current environment.

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