FCOR News and Press, Fidelity Corporate Bond From 03/06/23

2023-03-06 06:00:00 ET Summary The dollar melt-up was a major factor stoking global de-risking/deleveraging. The Federal Reserve needs to deemphasize its fixation on - and worries for - the financial markets. Unexpectedly weak jobs and earnings gains would likely spark a short...

Summary Last year proved a brutal one for fixed income - particularly for US corporate bonds, as credit spreads widened, and US Treasury yields rose sharply. As recession concerns abound, investors are seeking ways to manage credit risk in their US corporate bond portfolios without comp...

Summary At present, we estimate that a market loss of about -30% would be required to restore expected 10-year S&P 500 total returns to the same level as 10-year Treasury bond yields. It is dangerous and almost superstitious to take the bloated profit margins and corporate earnings ...

Summary The credit cycle lies at the heart of our financial system. Corporations and households rely on the availability of credit to facilitate economic growth and ensure financial stability. Unfortunately, the leading indicators suggest the cyclical outlook of the credit cycle is unfa...

Summary Two key risks could challenge recent market optimism: weaker consumption and a squeeze on corporate profitability. Despite these elevated risks, current credit spreads are not reflective of recessionary risks when compared with historical levels. The opportunity set for inco...

Summary Why the U.S. economy continues to display polyurethane-like flexibility and resilience, despite encountering extraordinary shocks. How portfolios can also be built with flexibility and resilience in mind. Why high-quality fixed income assets are today a critical component of...

Summary One of the phrases making the rounds among the financial media chatterboxes this week has been “no landing”. The macro news has indeed given some cause for cheer relative to some of the more dour scenarios we’ve been looking at in the past few months. Wh...

Summary Following the US Federal Reserve’s (Fed’s) series of aggressive interest-rate hikes, inflationary pressures have shown signs of easing. We believe this may pave the way for a “pivot to a pause” in monetary policy. The impact of tightening financial co...

Summary Changes in the bond market reflect changes in interest rates, inflation expectations, and overall economic conditions, all of which have a significant impact on the stock market. This week, we saw a bit of a dislocation in the bond/stock market relationship. Corporate bonds and ...

Summary People are looking here and there for clues but they aren’t grasping what the Fed is actually doing to either the state of the nation or to both the bond and equity markets. The Fed’s relentless pursuit to lower our rate of inflation is having a quite severe effect...