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Market Outlook

Market Outlook
Sep 14

Mid-Week Bond Update

ECB spoils bond party

Global bond markets plunged over the past five trading days after the European Central Bank (ECB) refrained from expanding its monetary stimulus programme. Investors, who have enjoyed a years-long bond rally supported by loose monetary policy in the US, Europe and Japan, now fear the stimulus packages may be coming to an end: the US Federal Reserve (Fed) has repeatedly signalled its willingness to raise rates this year; the ECB stayed put last week, and the Bank of Japan is reviewing its own programme.

Market Outlook
Sep 07

Mid-Week Bond Update

Soft data damps bets on US hike

Global bond markets cheered a battery of soft US data - manufacturing, services, home prices and job growth -, which dampened market-implied expectations of a rate hike later this month. Tuesday’s non-manufacturing August survey came in especially weak: it was the largest single-month decline since 2008 and the lowest level since 2010. The US dollar sank and, once again, prospects of lower-for-longer interest rates pushed up traditional risk assets, such as Emerging Markets (EM) and High Yield. Most corporate spreads tightened, while US loan prices continued to rise after default data hit a 17-month low in August. In Europe, a French drug company and a German maker of detergent and other household goods sold bonds at negative yields – the first European companies to do so outside the financial sector.

Market Outlook
Aug 05

Unconstrained bond investing:

Not Running on Empty

Unconstrained strategies may be suitable in an environment where global growth is facing stronger headwinds, market volatility is on the rise, and challenging markets require greater flexibility. They have no formal benchmark and comprise exposures of various asset types that have differing risk budgets.

Market Outlook
Aug 01

The big picture in bonds:

Market and Strategy Update

With further accommodation from central banks likely, Western Asset CIO Ken Leech believes spread sectors should continue to offer attractive returns, with Treasuries and sovereign bonds underpinned by low rates.

Market Outlook
Jul 29

An upturn in growth ahead?

Despite the economic pessimism now impacting valuations in global bonds, Brandywine Global's David Hoffman and Steve Smith perceive opportunity in developing markets in the 2nd half of 2016.

Market Outlook
Jul 21

A Powerful Backdrop For Credit

Western Asset continues to be cautiously optimistic that global growth will hold up, but is cognizant that Brexit has introduced new uncertainties. Western’s central theme remains that favorable valuations, strong fundamentals and reasonable growth are a powerful backdrop for credit.

Market Outlook
Jul 18

Munis Shine in 2Q16

Municipal bonds outperformed their taxable counterparts in the second quarter and Western Asset still has a somewhat optimistic outlook for the sector going forward.

Market Outlook
Jul 18

There continues to be value in credit

Standing our Ground

After a very challenging start of the year, the credit rally since mid-February, briefly interrupted by the Brexit rollercoaster, has been nothing short of remarkable. Despite healthy year-to-date returns, however, the rally has only taken valuations back to what we would consider attractive levels given our macro outlook and credit fundamentals.

Market Outlook
Jul 01

Small-Cap Value Remains Strong

Chuck Royce and Francis Gannon discuss why the combination of earnings and valuation could bolster small-cap value’s leadership in the current cycle.

Market Outlook
Jul 01

Is the World Upside Down?

There's much in the global economy that defies expectations; for ClearBridge co-CIO Hersh Cohen, the answer is to stay focused on solid assets with the potential for stable or rising dividends, as well as diminished volatility.

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