LQDB - The News And Our Views
2024-02-07 00:08:00 ET
Summary
- The decline in bond yields and policy rate expectations that closed 2023 underwent a sharp reversal, but that failed to dampen sentiment in equity markets.
- The pullback in Fed rate-cut expectations was amplified by Fed Chairman Jerome Powell’s cautious messaging on Wednesday, which strongly suggested that the central bank would not be confident enough to cut in March.
- There was heightened volatility in China’s markets as troubled real estate firm Evergrande was hit with a liquidation order.
- The potential for a soft economic landing and the prospect of loosening financial conditions led us to unwind our overweight view on cash in favor of short to intermediate investment grade credit, in particular.
By Erik L. Knutzen, CFA, CAIA
January was packed with news—and much of it supported our views for the year ahead.
January proved to be an eventful start to 2024.
The decline in bond yields and policy rate expectations that closed 2023 underwent a sharp reversal, but that failed to dampen sentiment in equity markets. The situation in the Middle East grew still more precarious. China's real estate crisis returned to the headlines—and so did the stresses within U.S. regional banks. Through it all, U.S. and European growth proved resilient and inflation continued to cool....
The News And Our Views