FCOR News and Press, Fidelity Corporate Bond From 10/18/22

Summary Financial markets have entered a period of head-spinning volatility. Consumer inflation remains at record highs across major developed economies. Higher yields will bring new income-generating opportunities and significant shifts in risk-return assessments. ...

Summary We’re underweight government bonds because yields have room to move higher, and we don’t think they can be a safe haven when recession comes. Stocks were choppy and short-term U.S. Treasury yields jumped after data showed persistent U.S. core inflation. We th...

Summary U.S. recession risks are rising and stagflation may be poised for a comeback. A strong job market has kept us from entering such an environment, but recession risks are rising as the Federal Reserve has vowed to maintain a restrictive monetary policy to rein in inflation -...

Summary For the most part, 2022 has unfolded largely on script, with inflation proving stubborn and the Federal Reserve seeking to cut off the spigot. Despite the general monetary trend toward stiff tightening on a global basis, individual countries continue to initiate moves to s...

Summary Financial markets are highly liquid and far from breaking down. Since a strong economy is going to be tough to come by these days, high real rates confirm that money is very tight. The interest cost of our federal debt is less than 3% of GDP, and that's relatively low ...

Summary When U.S. headline inflation dropped between June and July, it fueled a strong midsummer rally based on hopes that central banks might soon begin to ease their policy tightening. However, while we are not convinced the economic outlook is yet reflected in earnings outlooks...

Summary Geopolitical tensions, elevated market volatility, and the fastest pace of central bank tightening in decades are contributing to an unusually uncertain economic environment. In addition to higher income potential, yields are high enough to provide the potential for capita...

Summary Rising prices continue to confound expectations that slowing global growth will ease inflation pressures. Financial market turbulence may be here to stay for some time. The ability to rebalance negatively correlated assets helps generate income and potential return whi...

Summary The new regime poses an unavoidable trade-off for central banks: tame inflation by hiking or preserve growth. We see them overtightening rates, so keep risk low. UK gilt yields reached 14-year highs before the Bank of England intervened to halt the selloff. Yields on 10-ye...

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...