‘Tis the season for giving thanks, at least in the world’s largest economy. But after the market routs of the last month – driven by US stocks, no less – there is precious little to be grateful for in some commentators’ eyes. Enter duration, which has been helping to give the protection we all crave, so long as you’re long, that is…
On 14 August 2018, Italy was struck by a terrible tragedy, when the Morandi bridge in Genoa collapsed, killing dozens. There are important considerations for the funding of ageing infrastructure across Europe.
Something remarkable has happened over the past two years: China has started to tackle its addiction to debt. With the authorities finally addressing China’s biggest economic weakness, the medium-term risk to the Chinese (and global) economy should be on the decline.
It’s been a tough first half of the year for many markets, and I don’t think it’s going to get any easier.
Could today’s credit bear market be a signal of equity market wobbles to come?
Concerns that rising leveraged buy-out (LBO) activity is bad news for high yield bonds are misplaced. Credit quality is improving, indicating lower default rates, which is good news for investors as spreads have further room to tighten.
A little like the world depicted in the Lewis Carroll classic, the impact of a Brexit shock on the sterling investment grade credit universe might be the opposite of what investors think it should be.