HYLD News and Press, High Yield From 02/07/22

The flattening Treasury curve likely has more to do with the market's failure to recognize growing structural inflationary forces. Exceptionally high inflation has turned the U.S. Federal Reserve notably hawkish. Commodity prices continue to climb, with oil touching $90 per barrel...

For investors who want to earn a reasonable return without taking excessive risks, diversification still works, and we think you’re going to need more of it this year. The weighing of the high-flyers is not over. Commodities had another good week, and the 1-year return is getti...

The expected risk premium for the Global Market Index edged down in January from the previous month’s estimate. Using short-term momentum and medium-term mean-reversion market factors to adjust the forecast reduces GMI’s ex-ante risk premium to an annualized 5.4%. Th...

With the rise of quantitative credit trading, investors are looking for novel data to better understand their investment risks and drive investment decisions through statistical models. A sub-market that investors frequently look to in search of yield is the high-yield corporate bond ...

Even prior to the COVID-19 outbreak in early 2020, the labor force participation rate in the United States had been in a structural downtrend for decades. However, the pandemic brought about a significant drop below the historic trend, with limited signs of recovery over the past 20 month...

Inflation has skyrocketed and aggressive monetary policy is the key factor in understanding it. The Federal Reserve has at least acted, and will reduce its monthly sovereign bond purchases to $20 billion and $10 billion a month of mortgage-backed securities. Despite runaway inflat...

Global economic growth will be slower but still above trend in 2022. This forecast should allow equities to outperform bonds. Inflation has yet to peak, but it will likely decline over the year and as a result any central bank tightening will be modest. 2021 was a year of rebound ...

The EMBI High Yield Index yields 330 bps above the U.S. High Yield Index, which is around two standard deviations relative to the last five years’ average. Apart from China and the frontier markets, there are opportunities in more “traditional” EM countries. I...

In the sovereign space, we have a strong preference for BB- or B-rated sovereigns because of the valuation that’s currently offered. On the corporate side, we have a preference in between investment-grade and high-yield rated debt. On the residential side, fundamentals are ...

Taking an active approach in fixed income will be key to finding investment success in the upcoming year. In 2022, we expect the market narrative to transition to the traditional expansionary phase of the business cycle. We believe 2022 will be a strong year for “rising sta...