A top national priority
With bipartisan support at every level of government, investors are likely to see more infrastructure investment opportunities surface faster.
Finding opportunity in fixed income
Why Western Asset continues to favor specific spread sectors and a long duration bias for a fixed-income portfolio.
Ken Leech Commentary
Until recently, the market consensus was one of “secular stagnation,” predicting anemic growth for the indefinite. Today, the prevailing theme is “global reflation,” calling for synchronized global growth that will lead to self-sustaining recoveries around the world. Western Asset has a different view. Read more.
Market & Strategy Update
Keeping in mind the enormous amount of policy uncertainty there is around the world and particularly in the US, upside growth prospects are coming amidst challenging secular headwinds and a constrained global growth background.
“[Yellen] is not a Republican. When her time is up, I would most likely replace her because of the fact that I think it would be appropriate.” “[Yellen] is a low-interest-rate person, she’s always been a low-interest-rate person, and let’s be honest, I’m a low-interest-rate person.” ~Donald J. Trump, CNBC Interview, May 5, 2016
Chart of the Week
Source: Bloomberg, 9/30/17. Past performance is no guarantee of future results. Indexes are unmanaged, and not available for direct investment. Index returns do not include fees or sales charges. This information is provided for illustrative purposes only and does not reflect the performance of an actual investment.
Chart of the Week
The Fed looked toward a December hike as a more varied picture emerged; Catalonia chose to pause; China prepared for its 5-year People's Congress
Looking beyond the obvious
Current yields and spreads are creating the perception that fixed income isn’t offering much value, but Western Asset Deputy CIO Michael Buchanan does see pockets of opportunity in several segments of the market.
Western Asset examines recent trends in the muni bond market and provides its outlook about conditions ahead.
Emerging Markets Insights
In light of concerns over China’s rising leverage, yuan stability, capital outflows and risks to emerging economies, Western Asset’s Portfolio Manager and Head of Investment Management, Asia (ex-Japan) Desmond Soon shares what we can expect from China’s financial markets in the next six months. He goes into detail about why we think a debt crisis in China is not likely, the safeguards in place to help ensure financial stability and the steps China is taking to encourage more foreign investments to conclude that China’s fixed-income market continues to be an attractive option for global bond investors. READ MORE.
The big picture in bonds:
The US and global economies are healing against a muted inflation backdrop that is unlikely to change anytime soon. In this environment, spread products should still continue to outperform government bonds.
Active management is critical for municipal bond investors today.
The lessons from the 2013 taper tantrum are relevant for bond investors today, but as circumstances are different we do not expect a similar outcome.
Steady growth and moderate inflation:
Western Asset CIO Ken Leech explains why growth and inflation expectations have proven more optimistic than fundamentals could support. His base case continues to be slow but steady US growth and moderate inflation -- and that spread sectors will continue to be an attractive opportunity for fixed income investors in this environment.
Western Asset Global Outlook
The current steady but unspectacular global growth backdrop has not materially changed. We remain optimistic that global growth of around 3% is sustainable while recognizing that high debt loads and other headwinds, including low productivity and...
French election update:
Some worry about a political tsunami. But so far, it looks like a four-way tie. The least likely outcome, a Le Pen / Mélenchon run-off, could trigger significant market volatility, providing attractive opportunities for astute investors.
After the political tsunamis of 2016 —with the unexpected decisions by the British to leave the EU, and the Americans to elect Donald Trump president— the political nexus in 2017 shifted to the Eurozone. After the Dutch vote, it's not the turn of France and, later this year, Germany —both vulnerable to the rising populist tide.
Ken Leech Quarterly Letter
CIO Ken Leech discusses how Western Asset's outlook and positioning for slow and sustainable growth has paid off, even as the economic recovery experienced some pitfalls. A key has been the Firm's multiple diversified approach, which has worked to provide a cushion for volatility when growth has disappointed. Given the outlook going forward, he sees a continuing need for this flexibility.
Municipal bonds are a tried and true way to finance the much needed infrastructure projects that will raise the quality of life for so many Americans.
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