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
Since January, much of the talk from the political class has revolved around sequestration, the other half of the fiscal cliff that mandated 2% across-the-board spending cuts. While the political rhetoric associated with those cuts often has painted them as … Continue reading
For both agency securities and non-agency issues, the Fed’s bond-purchasing programs have had a major effect on prices and spreads.
With revenues on the rise, the fiscal health of many states is improving. In a survey conducted in the fall of 2012, the National Conference of State Legislatures found “solid revenue performance” in most states. This is one of the … 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
It appears that the effects of the major deleveraging event in 2008 — punctuated by the collapse of Lehman Brothers — has finally shifted into a second phase. For the past four years, fixed-income investors have been influenced primarily by … Continue reading
We continue to be cautiously optimistic on the U.S. economy, which has been gradually improving. Clearly, there are a number of long-term fiscal issues that the federal government needs to address, including entitlement spending and the debt load overall. Nevertheless, … Continue reading
