FCOR News and Press, Fidelity Corporate Bond From 09/30/22

Summary When perceived or actual risks around corporate solvency and liquidity emerge, segments of the corporate bond market reprice lower, at times dramatically so. Spreads and volatility are related and tend to broadly move together. The year-to-date change in corporate bond...

Summary Stocks are now back down to the lows set in June and sentiment is as negative now as it was then. There is a long list of technical items that have hit levels or rates of change we associate with bottoms, short- or long-term. The economic data last week was mostly abou...

Summary Last week brought the third consecutive 75-basis point rate hike from the U.S. Federal Reserve. The week also brought more signs of this rapid hiking cycle reverberating worldwide. We think credit spreads can offer a remunerative and relatively calm haven amid the vola...

Summary Although consumers are benefiting from robust labor markets and strong balance sheets, they appear reluctant to buy high-cost durable goods. A key to navigating inflation risk is understanding its relationship with asset class returns. Historically, high-inflation episodes...

Summary The new regime of macro volatility is playing out with weaker growth, persistent inflation and volatile markets. We stick with our dialed-down risk stance. U.S. stocks slumped and yields surged on a renewed rise in core inflation. We’ve argued inflation will be pers...

Summary As we start the third week of September, with the US Fed’s much-telegraphed rate hike on Wednesday (+.75 with some 30% betting odds of a full percent!), markets are peaked. To date, Canada’s TSX -13% is just a quarter through the price correction experienced ...

Summary Mitigating the impact of inflation might mean cutting interest rate sensitivity by favoring shorter-dated fixed income but also trimming speculative growth exposure in equity portfolios. The market appears to seize on any sign of easing inflation to be bullish, while remai...

Summary The first half of the year saw GDP contract slightly and GDI expand slightly, and I interpret that as little to no growth. The money market futures I follow and the market based models I track all put the peak in rates somewhere between March and June of next year. I d...

Summary Starting today, the US Fed has pledged to run off its balance sheet by $95 billion a month. Fed fund futures predict that US policy rates will move to 3%-3.25% next week and 4.25%-4.5% by early 2023. Bond yields and interest rates should be topping out if a Fed pause c...

Summary Why an economic soft landing for the U.S. economy is becoming less likely. How softer commodity prices could become an economic bright light. Do job losses have to happen to get inflation under control? Of all the U.S. economic reports released monthly, the j...