SPTL - A Cyclical Rotation In Corporate Credit
By Renato Latini, CFA
The unprecedented global monetary and fiscal responses to the pandemic resulted in a swift compression of corporate credit spreads. However, we believe the progression of the economic cycle is giving way to further opportunities in cyclical sectors.
Dramatic Spread Tightening
The sudden stop to markets induced by COVID-19 caused a substantial repricing of credit risk globally, and central banks, treasuries, and ministries of finance around the world responded unequivocally. The Federal Reserve (Fed), in particular, took a page out of its Global Financial Crisis playbook - but rolled out new policy