High-Yield

Our Portfolio Allocation Summary for November 2024.

Can Powell achieve a soft landing? There are some indications he is doing it. We examine why our negative stance was wrong and analyze the four growth engines that kept recession at bay. Half of these forces remain while the other half have run out of juice. While this might be enough to keep the economy going, we maintain our defensive positioning. Equities have priced a very benign outcome. Meanwhile, rising rates in anticipation of a Trump win are pushing the economy away from the soft-landing path. We hedge the possibility of further upside in yields in case Trump gets elected by downgrading duration to neutral.

We update our 12-month return projections for different US fixed income sectors in soft-landing and recession scenarios.

Our Portfolio Allocation Summary for October 2024.

We update our corporate default rate model and consider the implications for corporate bond spreads.

Our Portfolio Allocation Summary for September 2024.

Our Portfolio Allocation Summary for August 2024.

We calculate expected returns for several different US fixed income sectors with a focus on how municipal bonds stack up against the investment alternatives.

Our Portfolio Allocation Summary for July 2024.