Tremors in Credit and Currency Markets
November’s modest uptick in volatility, driven by a recalibration of the market’s macroeconomic expectations, could be a sign of things to come.
Understanding China Market Dynamics
(15:00) We believe having on the ground insight is key to understanding China market dynamics.
The Open Road Leads to the Used-Car Lot
Your car is worth more than you think—record-high car prices remain elevated due to shortfalls in new car volumes from OEM’s.
Simple Equity Themes for Complex Times
Here’s why we think value and income can offer equity investors both a buffer against uncertainty and an attractive opportunity in an ongoing reflationary expansion.
COP-Out or COP Half Full?
While there was no “Eureka!” moment, COP26 delivered some important symbolic gestures and substantial progress.
U.K. Private Equity Deal Drive Delivers Record Issuance
An acceleration of PE deals is contributing to record leveraged credit issuance in Europe, offering investors a potentially attractive opportunity to overweight U.K. assets.
Taking a Second Look at Real Estate Secondaries
(13:48) With inflation and interest rate risks on the rise, what might make investors want to take a second look at real estate secondaries?
Chile: Three Strikes and Still Not Out
Eventual clarity on its constitution and election should help Chilean assets.
Tapering Impact on Treasury Supply
Net Treasury supply is set to fall in 2022, even as the Fed exits bond buying.
Inflation Could Unbalance Policy and Portfolios
As inflation pressures build and investors question central bank policies, we think it’s increasingly important to diversify against market volatility and rising prices.
Incomes Are Likely to Support Growth and Consumption
Fears about consumption may be misplaced.
Solving for 2022: Entering a New Age
Our senior investment leaders look to the coming year in the global economy and markets.
Oil’s Disparate Impact in Emerging Markets Credit
Oil prices are expected to remain elevated in coming quarters, with higher prices having differentiated effects across emerging markets credit.
Euro and Sterling Corporate Issuance in 2021
Despite strong market conditions, record-low yields and robust demand for credit, supply has underwhelmed in 2021 as issuers have remained disciplined in raising liquidity.
European Real Estate: The Coming Reveal
Only when the tide goes out do you discover who's been swimming naked.
Taking the “Byte” Out of Bitcoin
In this paper, we share our proposal on how to gain Bitcoin exposure in what we view as a more risk-efficient, hedged format that seeks to benefit from one of its most notable qualities—its volatility.
Central Banks Emerge From Hibernation
Rates volatility reflects a change in the inflation narrative, and could accelerate central bank policy adjustments.
Digesting the Record ‘Quit Rate’
Tightness in the labor market is supporting job switching.
Public/Private Investing: Broadening Opportunity Within Equities
We believe private equity can serve as a core holding alongside traditional stocks to help improve investment outcomes.
The Blurred Lines of Public and Private Equity
(21:52) Companies today have a variety of pathways to go public, but we also have seen them want to stay private for longer. So where might the opportunity set be within this gray area of investing?
COP26: The Heat Is On
Why COP26 is arguably the most critical global summit in a generation—for investors, as well as for the climate.
SDRs: A Lifeline for a Tough Winter
SDR issuance came at the right time to help emerging market financing, as the asset class comes under pressure amid rising global inflation and China noise.
Bitcoin, A Cornerstone Digital Asset: Part 1
Several competitors have emerged to challenge Bitcoin and its blockchain over the past decade, but here’s why our options team believes the original digital asset is the only genuine digital asset.
The Peruvian President Chooses Moderation
Severing ties with the far left will cost Castillo some political capital but could also allow him to advance the more pragmatic aspects of his agenda.
Bring On the Transition
A period of changing policy could bring new opportunities to add to yields in the municipal market.
Watch Out for Food Inflation
While other CPI components may be discretionary, “food at home” is accelerating.
Laying the Foundations: Understanding Current Real Estate Dynamics
From de-urbanization to e-commerce, three heads of our real estate teams debate key sector trends.
Sustainability in Emerging Markets Debt
Ignoring sustainability in emerging markets debt is, for want of a better term, no longer sustainable.
Taxable Munis Deserve Attention
The taxable municipal bond market is growing and mature—and checks a lot of boxes for insurers other low-tax investors.
ESG: From Evolution to Revolution
(15:30) With regulatory frameworks changing for ESG investing, what might investors want to keep in mind as they develop sustainable portfolios?
Fragility in European Energy
Tighter climate rules and low investment in baseload capacity will require revisiting taxonomy criteria to ensure a seamless bridge to a zero-carbon future.
Relative Value in Bank AT1 Securities
Relative value analysis via issuer and security level views can identify attractively priced Additional Tier 1 bonds.
U.S. Drug Price Regulation: Overhang to Persist
Potential new drug price regulations for the pharmaceutical sector should have manageable impact near-term while leaving a long-standing overhang in place.
Identifying Japan’s Hidden Gems
(2:26) In this video, Joe Amato, Chief Investment Officer—Equities, and the Japan Equity team introduce what makes the Japanese market attractive, and how long-term active engagement is the key to enhancing long-term value.
The Worst Seems to Be Over…Now It Gets Complicated
Investors have shifted focus from the immediate COVID-19 threat to the prospect of a cyclical slowdown and secular stagflation.
Assessing El Salvador’s Bitcoin Adoption
By establishing Bitcoin as a legal tender, El Salvador could increase financial inclusion, but it is also taking significant risks.
El Salvador and Bitcoin
Establishing the cryptocurrency as legal tender is a risky move, but also carries some potential benefits.
Public/Private Investing: Fixed Income at a Crossroads
Drawing on multiple fixed income asset classes can help investors navigate varied market environments.
NB Votes in the 2021 Proxy Season
During an important time, we made our voice heard.
Traditional Media Advertising’s Robust Recovery
Despite the headlines on cord-cutting and the growth of digital advertising, traditional media advertising has mounted an impressive recovery after a painful 2020.
Decarbonization Is Redefining the Chemical Industry
Investment-grade issuers in the chemical industry going green—those with the best execution could prove the winners.
Investment Grade Earnings: The Road Gets Harder From Here
IG companies took advantage of economic reopening and easy year-over-year comparisons to post solid 2Q results, but headwinds are building.
Clearing the Hurdles
On a 12-month horizon, this looks to us like an attractive environment for risky assets, but the inflection point in the current cycle is proving particularly volatile: adopting a more defensive view in the short term could help investors clear the immediate hurdles.
Caution Today, Opportunity Tomorrow
We think a more cautious stance represents a prudent approach to an already volatile inflection point between early-cycle recovery and mid-cycle expansion.
China And Europe: Driving Fixed Income Volatility, With More To Come
Recent developments have global reach and could create more enduring market impacts.
‘Common Prosperity’: The Next Stage in China’s Reform
Common prosperity goals might pressure economic activities and markets in the near term but should lead to more a sustainable growth model in the future.
Energy Credit: Sea Changes in Gas
Structural shifts in the global gas markets have created the potential for winter shortages and a constructive environment for natural gas-exposed credits.
The Streaming Wars and Cord-Cutting: What Are the Implications for Cable?
Cable business models today are driven by providing internet service, not video; as a result, cord-cutting is a non-issue.
The Inflation Generation
Temporary price spikes over the past 20 or 30 years have all passed without sparking a general rise in inflation, but here are four reasons why we think this time is different.
U.K. Energy Supply Failures Continue—Incumbents Stand to Benefit
Energy prices have tipped suppliers into bankruptcy, but well-capitalized utilities could emerge as winners in a more consolidated U.K. energy retail market.
Economic and Market Review: Key Considerations for Equity Investors
Why we think the equity bull market can last at least until mid-2022.
Sustainability Is Driving Change Among Packaging Companies
The packaging industry could see some of the most significant changes in its history, driven by environmental and social factors.
Airport Municipals: Gaining Elevation
The sector could provide great opportunities post-COVID, but name selection will be critical.
China’s New Strategy in Its Pan-Asian Context
Why we believe China’s strategic reorientation changes the case for investment rather than removing it, and also highlights the growing diversity of opportunity in the rest of Asia.
Death of a (Car) Salesman
Dealers that deliver the superior digital experience demanded by customers are, in our view, most likely to see their securities outperform.
Upgrading to Fiber: The New Telecom Strategy
The roll-out of investment programs focused on fiber should benefit credit investors.
Metal Prices Strength and China’s Influence
Metal prices’ resilience in the face of China’s economic deceleration and fight against speculation is tied to the country’s environmental policies.
Evergrande Heads for Default
We believe systematic risk beyond the Chinese property market remains limited.
Key Takeaways on Evergrande
The Chinese real estate company is fading fast—here are some high-level observations for investors.
CAT Bonds: Finding Reassurance in Reinsurance
(20:12) With flooding, wildfires and hurricanes continuing to wreak havoc around the globe, how might investors want to consider these natural catastrophe risks within their portfolios?
Norges Bank: First G10 Central Bank Liftoff
At its upcoming meeting we expect the Norges Bank to be the first G10 central bank that hikes interest rates from pandemic emergency levels.
This Is Not a 60/40 Environment
The shift to a mid-cycle expansion beset with unusually high levels of uncertainty could bring a new test for asset allocators.
Vaccinations and Boosters; the U.S. Food and Drug Administration (FDA) Makes a Strong Statement
We thought it would be helpful to opine on conflicting data with respect to the potential protection afforded by natural immunity versus that derived from vaccination, as well as the recent FDA decision to recommend COVID-19 boosters for those over 65 years of age and/or at high risk of severe COVID-19.
Travel and Leisure: Better Than Advertised?
Worries about virus impacts on balance sheets may be obscuring business resilience.
Relative Attractiveness of Bank Credit
In our view, U.S. banks offer attractive spread pick-up over high-quality industrials.
Semiconductor Shortages to Persist
Years of underinvestment in semiconductor manufacturing have been amplified by recent supply and demand shocks, resulting in widespread shortages.
October Surprise?
It has been 11 months since the last 5% correction in equity markets, and the coming weeks present a number of significant potential risks.
Euro IG Credit: What’s Behind Recent Outperformance?
A supply deficit and market composition are two likely drivers.
Retailer Credit Strength Unphased by Recent U.S. Retail Sales Data
Sales crosscurrents are unlikely to derail healthy fundamentals in investment grade retail, though positive trends appear priced in.
Brazil: Back to the Bad Days?
Market weakness amid political uncertainty may point to value opportunities.
Should Investors Stay Onboard the Chinese Dragon Boat?
Surprising policy developments are rocking the craft, but in our view the course remains set for the same long-term destination, and the uncertainty and volatility may present some attractive investment opportunities.
August Payrolls Are Unlikely to Derail Fed Tapering
Despite the payrolls miss versus expectations, other items held firm.
Turning a New Leaf in Chinese Investing
(19:21) With changes to Chinese regulatory policy, many investors have started to pull away their investments in China. Putting the pandemic and geopolitical tensions aside, could these investors perhaps be leaving potential opportunities behind as a result?
ECB Policy and Bunds Are Set to Move
Ahead of the key European Central Bank policy meeting on September 9, we offer our views on what will likely change, what may not, and what it could mean for the Bund yield.
ESG and Shareholder Value: Why Link Environmental, Social, Governance (ESG) Metrics to Executive Compensation?
With mounting evidence pointing to the materiality of ESG issues and potential ties to financial performance, we have seen investors asking for more companies to incorporate relevant and material sustainability / ESG metrics into their executive compensation plans.
Location Matters for Delta and Health Credits
COVID trends are varying across the U.S., and the same is true for credit risk in the nonprofit health care sector.
Autos: The Gap Widens
The global auto sector is entering an extremely challenging, arguably existential, phase, but well-positioned players should thrive.
Crossover Investing in a Sea of Change
(14:59) With companies staying private longer and seeking new, innovative ways to go public, it begs the question: is there a confluence of these two asset classes at play? Could investing in late-stage private companies be the next big next out-of-the-box entry point for investors?
All for One, One for All
Available data suggests that a balanced risk allocation to real assets may be the most robust way to mitigate the impact of upticks in inflation.
Tapering Decision Set, Timing Less Certain
A patient but watchful Jerome Powell kicks the Fed’s tapering announcement down the road.
How Big Data Casts New Light on Reopening Stocks
Our recent work on the COVID-19 Delta variant not only reminds us that data science can give us insights into the pandemic, but also about the ways alternative data need to be marshaled to provide actionable information for our investment views.
When Offices and Shops Re-Open, Is the 5G Story Over?
Working and shopping from home during the pandemic highlighted the importance of 5G connectivity. But the pandemic only accelerated a trend that has been underway for years. Far from being over, the 5G story is only just beginning.
US Treasury Supply Outlook
The U.S. Treasury is preparing for coupon cuts, but the impact on private supply will be nuanced.
U.K. Interest Rates and Currency
We believe that U.K. interest rates and the British pound will move higher in the next few months as a recent soft patch in data dissipates.
Thinking Big When It Comes to Small Caps
(15:57) With the rise of meme stocks making headlines earlier this year, what other investment tools might be available to new and seasoned investors alike when it comes to investing in small caps?
China Policy Moves Strengthen the Case for the Local Market
China’s regulatory reforms may be disruptive in the short term, but we see long-term positives.
If 5G Is Here, Can 6G Be Far Behind?
Whether it’s 5G or 6G, the core investment theme is the same – opportunities enabled by next generation connectivity. Investors can benefit by seeking to identify the enablers and beneficiaries of this megatrend, across a range of sectors and value chains.
EM Corporate High Yield 2021 Default Outlook: Midyear Review
We expect a marginal uptick in defaults from our original estimates, given rising China corporate default risk offset by an improving outlook for much of the emerging markets.
EM Corporate High Yield 2021 Default Outlook – Midyear Review
We expect a marginal uptick in defaults from our original estimates, given rising China corporate default risk offset by an improving outlook for much of the emerging markets.
The EU Recovery Fund and Its Potential
The fund, and the “next-generation” union that it represents, could be a game changer from both an economic and political perspective.
The U.S. Debt Limit in Focus
Congress seems likely to raise or suspend the U.S. debt limit—but not without potential market volatility along the way.
Don’t Fear the Taper
A potential reduction in the Fed’s purchases of agency mortgage-backed securities could open up opportunities for investors.
Esoteric ABS: Current State of the Market and Selective Opportunities
With spreads for traditional asset-backed securities at all-time tights, we believe carefully researched Esoteric ABS can add value to portfolios.
Metals Stand to Benefit from Change in China, Climate Factors
Prices for metals have soared despite the uncertainties wrought by the pandemic; structural reforms in China and global movement to address climate change could prove supportive moving forward.
Playing Good Defense in Diversification
(18:54) The idiom, “Don’t put your eggs in one basket” might come to mind when it comes to diversification, but how might investors want to go about heeding those timeless words of advice?
Rise in Event Risk in European Credit
A strong macro backdrop, expected earnings growth, ample dry powder and low funding costs could result in less credit-friendly corporate actions.
On the Joy of Being Wrong
Think Again, by Adam Grant, is Erik Knutzen’s recommendation for this year’s summer vacation reading.
Global CLO Market Hits $1 Trillion Milestone
The global CLO market recently reached $1 trillion in size as the yield premiums on offer continue to attract investors.
Private Debt, Capital Solutions and the Early-Cycle/Later-Cycle Paradox
Early-cycle growth prospects should incentivize investment, but later-cycle valuations can give pause: Private debt and capital solutions could resolve the paradox.
Durable, Sustainable, Adaptable: Identifying Potential “Transition Winners”
In the modern economy, we believe the best long-term prospects belong to companies that have a durable competitive position, do little to no harm to society or the environment, and can adapt to change.
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