Investors have been somewhat more cautious on the corporate-debt sector lately, with spreads — which measure the yield advantage versus Treasuries — tight by historical standards. To be sure, the financial health of corporations in the investment-grade space continues to … Continue reading
A number of developments in early 2013, including the long deadlock in Italian politics following the March elections, and the brinksmanship surrounding the EU bailout for Cyprus’s banking system, were notable specifically because of the muted market reaction they elicited. … Continue reading
There is little question that interest rates would be significantly higher in the absence of Fed purchases. It is important to understand how potentially damaging a long-duration strategy could be in this environment. The duration, or sensitivity to rate movements, … Continue reading
While the outlook for developed global economies is by no means rosy, investors have been so pessimistic and defensively positioned for so long that the absence of another crisis could be enough to coax cautious investors back into the markets. … Continue reading
This fall, the Federal Reserve announced its widely anticipated third round of quantitative easing, commonly referred to as “QE3.” The aim of this latest initiative is to keep interest rates low in order to encourage investor risk taking and investment … Continue reading
In the years leading up to the global financial crisis, growth across a number of countries was relatively homogenous. That changed in 2008, as nations implemented markedly different policy responses to the recession. Many emerging economies that sidestepped the debt … Continue reading
There are two main issues at stake in the European debt markets. The first is a short-term liquidity issue: Will these economically troubled European nations have the capital to make the next interest payments on their debts? The answer, for … Continue reading
We continue to find a number of reasons for a positive outlook on the high-yield bond sector. First, the long-term average spread in the high-yield market is close to 500 basis points, so today high-yield spreads are at above-average levels. … Continue reading
Uncertainty remained high in the fourth quarter of 2011 as the large macroeconomic challenges that dominated headlines throughout the year continued to weigh on investor confidence. Treasury rates in the United States declined slightly amid solid demand, while discussions over … Continue reading
