High Yield Train Wreck
The first defaults will occur at the lowest end of the problematic market: high yield or “junk” bonds. They will play a role comparable to subprime mortgages in the last crisis. We’ll see mortgage problems as well, but I think overleveraged companies will be the core problem.
Building a Better U.S. Economy
This shouldn’t surprise anyone, but public trust in the federal government is eroding. Sixty years ago, 75 percent of Americans expressed faith in the government to do the right thing “most of the time” or “just about always.” Seventy-five percent! You can’t get 75 percent of people to agree on anything now, as the recent “Laurel or Yanny” video proved.
‘Simplification Day’ for Oil & Gas MLPs: What Investors Need to Know
We believe the news is evidence of a broader shift toward simpler corporate structures in the midstream energy sector – a trend that supports our investment approach and our constructive view of the sector.
Equity-Sector Leadership Can Shift Amid Rising Interest Rates
In an environment in which interest rates have been steadily rising — the 10-year US Treasury yield has moved up almost 75 basis points since its recent low in September 2017 — one question that investors face is the potential effect of this phenomenon on equity sectors. Which sectors might be winners or losers in a rising rate environment?
The Madness of Crowding Out
Public debt may be growing at the expense of private debt, the Chinese bond market is opening up, and important dates for tariffs are fast approaching.
Yields Look Overextended and Ready for Mean Reversion
The 10-year Treasury yield has been the topic of conversation lately among fixed-income investors. Earlier this month, the T-note closed above 3 percent for the first time since July 2011, prompting some market watchers to call time on the three-decade Treasury bull market. (Bond prices fall as yields rise, and vice versa.) For other investors, these concerns might extend into the $3.8 trillion municipal bond market.
Tackling Student Debt and College Savings Plan Myths
The cost of a college education continues to rise, and along with it, student debt. Roger Michaud, senior vice president and director of college savings for the Franklin Templeton 529 College Savings Plan, and Mike O’Brien, director, Program Marketing, Global Client Marketing, look at how mounting student debt could have a long-term impact on one’s future.
John Williams Takes the “Under” on Expected Rate Hikes
John Williams, one of the newest members of the Federal Open Market Committee, wrote an article titled “The Future Fortunes of R-star: Are They Really Rising?” where he summarized his views on real neutral interest rates.
Why Trade Deficits Are Not Necessarily a Bad Thing
Today, I want to disagree with a widely-held view by the mainstream media and President Trump that trade deficits are always a bad thing. I also want to disagree with the idea that trade deficits with the US mean that our trading partners are taking advantage of us.
Gundlach Defends Technical Analysis
Criticism of technical analysis ranges from bemused skepticism to claims of harebrained alchemy. Few investors as well-respected as Jeffrey Gundlach admit to using it. But yesterday, he explained why he relies on technical analysis under certain conditions.
Global Economic Perspective: May
In this month's Global Economic Perspective, our Fixed Income Group opines on rising energy prices, US Treasury yields, emerging-market currency pressures and global economic growth.
YCG Q1 2018 Quarterly Review
In-depth write up of Moody's (MCO) highlighting how it fits into YCG's investment framework which focuses on identifying "great business" and "market-timing" mispricings.
A Strategic Income Fund that is Thriving in a Challenging Bond Market
Carl Kaufman is the co-president, co-chief executive officer and managing director, fixed income at Osterweis Capital Management. He is the lead portfolio manager for the Strategic Income Fund. That fund has had an annualized return of 6.18% since its inception on 8/30/02. Its performance exceeded the AGG by 278 basis points. I interviewed Carl last week.
Weighing the Week Ahead: Will Higher Interest Rates Lead to Lower Stock Prices?
The economic calendar is light, and the market week will be shortened. There is no holiday this week, but expect many participants to take off early for a long weekend. If interest remain above 3% on the ten-year note, that will be the focus.
Are You Prepared for Rising Interest Rates?
Interest rates continue their upward trend. In March, the US Federal Reserve (Fed) hiked the federal funds rate by 25 basis points to a target range of 1.5% to 1.75%, citing strength in the US labor market, a low unemployment rate and moderate economic growth.