HYLD News and Press, High Yield From 01/12/23

Summary Bonds were yielding nothing or just next to it for some time now, and didn’t seem to represent a decent investment opportunity. The Fed, in their meanderings, have changed all of this, and bonds are beginning to get more interesting lately. High-yield bonds are now on...

Summary Top-down and bottom-up forecasts are increasingly diverging, and we think 2023 will be largely about how these divergences resolve themselves. In commodities, after a major spike in 2022, top-down commentators point to slowing growth and inflation, and the historical pattern of ...

Summary As central banks battled inflation, interest rates soared and recession fears mounted. Now, central banks must slow their pace of tightening and carefully calibrate a soft landing. We address the challenges of a global slowdown, the benefits of higher yields and strategies f...

Summary An all-time low in interest rates was reached when the Fed cut the fed funds rate to approximately zero in late 2008 in an effort to pull the economy out of the GFC. The Fed deemed the inflation “transitory,” it continued its policies of low-interest rates and quan...

Summary 1 or more years of additional interest-rate duration in ‘23 vs. ‘22, to be grown over time: As central banks slow, or pause, their tightening cycles, in sympathy with slowing economic growth and inflation. 6% to 6.5% of portfolio carry potential (including anticipa...

Summary The credit cycle and the economic cycle are excellent leading indicators of volatility. Both are likely to continue deteriorating in the months ahead. As such, expect high stock market volatility to be a mainstay for 2023. High Volatility Set To Continue Eq...

Summary Inflation continues to moderate, not only here, but also in Europe. Despite the negative economic reports and the reaction to the Fed rate hike, the US Dollar barely budged for the week. Value yet again outperformed Growth in the last week, this time by a spread of almost 1%...

Summary HYLD suffers from guilt by association. High yield a.k.a. junk bonds were decent relative performers in 2022. However, we encourage investors not to get too overconfident about junk debt heading into 2023. This is still a market segment that has yet to reckon with some r...

Summary Amid the crosscurrents, two themes have prevailed during the post-pandemic years, which lend some perspective to the macroeconomic roadmap ahead: namely, the bipolar swings in macro policy and the forces of economic normalization. After one of the worst years for fixed income as...

Summary Today, the yield curve is more inverted than at any time since the early 1980s, so many are saying that means the chances of a recession are pretty high. Yes, today the curve is very inverted, but real yields are not particularly high. Low spreads suggest the market is relat...