Market Commentary & Investment Research
On February 21st, the Senate passed a budget resolution with reconciliation instructions. The top-line figures outlined in each budget resolution supp...
House Republicans and Senate Democrats emerged from the November 2022 elections with very slim majorities, posing meaningful challenges over the next ...
Risk assets recovered from Omicron fears and a Fed pivot away from accommodative policy to close the year near record high price levels. The central b...
The dramatic repricing across the front end of the yield curve has created attractive entry points for short duration investors. With markets now pric...
Risk assets pushed to new highs as economic growth accelerated and earnings expectations rose. The Federal Reserve signaled the start of policy taperi...
The Federal Reserve's hawkish pivot at the June FOMC meeting surprised markets, but the sharp move in rates may overstate the near-term risk of tighte...
The January Georgia runoff election gave the Democratic Party a one-vote advantage in the Senate and the Biden Administration wasted no time pushing t...
Risk assets rallied to new highs as 2020 came to a close. Expectations of further fiscal stimulus and optimism that vaccines will curb the economic im...
1-5 year corporate credit is on track to achieve a consecutive year of strong total return. Spreads across the 1-5 curve have recovered tremendously s...
Fixed income markets largely treaded water over the quarter as states reopened and isolated surges were watched with trepidation while equity markets ...
Our primary goal when considering ESG factors is to identify risks and opportunities that can potentially result in downside or upside surprises to cu...
Markets continued to rally over the quarter as expansive monetary policy and fiscal stimulus offset the economic distress brought on by coronavirus.
Following the June FOMC meeting, the Fed released its first summary of economic projections incorporating impacts from the Covid-19 pandemic. Investor...
Price action in investment grade corporate credit during the month of March was historic. A key takeaway from 2008 is that strong external support can...
Relative to Covid-19, a possible Middle East conflict with Iran at the beginning of the year was met with little fanfare by Treasury markets. The 10-y...
The coronavirus outbreak in China shook markets mid-January. Markets entered 2020 on an optimistic note following the Phase 1 trade...
Trade news primarily drove market sentiment as 2019 came to a close. Progress towards a “Phase 1” trade agreement with China continued with both count...
The aggregate U.S. corporate index had a historic year in 2019 achieving 14.3% in total return which was only bested by a 19.7% return in 2009. These ...
This comes after a year of extremely negative returns of -4.45% compared to -2.81% for index eligible industrials with spread widening in longer durat...
The U.S. and China continued to make progress towards a “Phase 1” trade agreement. Most developed economy central banks, including the Federal Reserve...
While prospective data for manufacturing activity appear to have bottomed out in August and September according to readings from purchasing managers' ...
The rate on overnight repo surged on Monday, 9/16 and remained elevated through the week causing the federal funds rate to rise above the higher end o...
Weakening sentiment as evidenced by global central banks’ dovish and the recent inversion in the 2s10s curve is likely to force the Fed’s hand to cut ...
The 10-year Treasury yield peaked at 2.60% early in the quarter before plunging to 2.01% at the end of June.
Due largely to recent LIBOR manipulation scandals, regulators in the US are set to phase LIBOR out by the end of 2021 and replace it with the Secured ...
Unlike senior unsecured corporate bonds, ABS transactions are structured so senior tranches are able to maintain AAA ratings even if there is material...
The Fed’s positioning still leaves room for a pivot back to hawkish, but the window may have already closed for additional hikes as traders are now pr...
Domestically, the Federal Reserve’s 180-degree policy pivot, a pause in rate hikes and possible adjustments to balance sheet rundown prior to the end ...
Sentiment for risks assets has vastly improved as fear of a recession induced by monetary policy missteps eased considerably with the Fed explicitly s...
More recently, statements from Fed officials and minutes from the December FOMC meeting have firmly anchored dovish expectations at least through the ...
This reaction coupled with data indicating slowing global growth, impending Brexit politics, trade wars, and domestic government strife amplified risk...
The persistent lingering of geopolitical issues that have seemingly reached maximum escalation only find new ways to further intensify driving volatil...
Year-to-date, lower quality issuers have driven outperformance in the sector with excess returns of +2.6% for Single-B and +4.3% for CCC & lower compa...
This increase not only includes technology firms whose values comprise the application of algorithms, but also firms that have paid handsomely for acq...
Over the quarter, the yield curve bear flattened as frontend yields rose 25-30 basis points while longer maturities rose 20-25 basis points. Investmen...
The European Central Bank (ECB) presented a fairly dovish outlook while the Federal Reserve (Fed) increased rates by 25 bps in June and signaled two m...
Economic activity lost some momentum from the fourth quarter, but remained healthy.
Further, Fed officials are forecasting three hikes in 2018 matching the 2017 pace.
However, Fed officials opined that lower inflation was transitory and did not warrant deviations from policy forecasts jolting market expectations.
Investment grade credit traded in a fairly narrow band finishing the quarter almost unchanged.
The brief rout reversed on expectations of further easing by global central banks – a common elixir to economic malaise and market volatility these pa...
Credit spreads soared, especially for commodity related sectors.
Commodity prices continued to come under pressure as well with oil declining 30% on the year.
Energy and metals/mining sectors are stressed especially in the high yield space.
The yield curve bear steepened (see Figure 1) as two-year Treasury yields increased 9bps while the thirty-year Treasury yield increased 59 bps.
Risk assets delivered uneven results and U.S. Treasury yields were volatile as well (see Figure 1). On the quarter, performance rewarded duration and ...
The New Year is an opportune time to ensure your policy and investment choices are equipped to take advantage of the evolving opportunity set
In this quarter’s commentary we will examine the Fed’s exit policy and its effect on markets as well as providing updates on the GSE’s and money marke...
In this commentary, we’ll examine the current regulatory environment for money funds while providing an update on the state of banks.
Many will read the title above and feel the way some do when talking with a mechanic about what might be wrong with their automobile...
In this commentary, we outline what is next for the Federal Reserve, discuss the upcoming earnings season, and briefly revisit money market reform.
Meanwhile, central bank policy will continue to have a significant impact as the Fed carefully exits its high-octane policy.
Why would someone choose to pay an explicit fee to a Registered Investment Advisor (RIA) when they could simply use a broker who charges “no fee”?
The odds of a technical default are rising, but it is still a very low probability event in our estimation.
While the market volatility post-announcement seemed a bit overdone in our view, investors should take notice: the FOMC’s recent statement is a potent...
In this month’s commentary, we will look at historical rising rate environments, consider portfolio implications and discuss what the future could loo...
If so, we would view wider credit spreads as an opportunity to selectively add risk rather than avoid it.
Like diamonds, QE incites joyous reactions from its respective benefactors and carries the perception, right or wrong, of lasting forever.
With the threat of rising longtern yields, analysts fear this may spell impending doom for the bond market; but should fixed-income investors be overl...
The dawn of a New Year coupled with the expiration of the muchutilized FDIC Transaction Account Guarantee (TAG) Program and pending money fund regulat...
Evaluating these list items now will provide professionals with the flexibility to design the best response for potential adverse outcomes. And like a...
Both events will add risk to assets that previously had little to none, and should motivate investors to seek prudent alternatives sooner rather than ...
While developed markets abroad have experienced exceptional volatility in 2012, this volatility has neither derailed the impressive performance of U.S...
With that in mind we’ll discuss a couple of major developments in the short-maturity fixed income space: GSE support and LIBOR-gate.
By contrast, interest rates in “peripheral” countries remain volatile and on a general upward trajectory as eurozone policymakers struggle to repair c...
While we will reserve judgment on the recent policy actions until additional details emerge, we anticipate further consolidation of monetary, fiscal a...
As such, corporate practitioners should begin to formulate a plan to respond to potential changes that could potentially affect their investment strat...
As the markets struggle to digest the European Union’s plight alongside renewed concerns about bank capital levels globally, investors should ensure t...
As in past periods of potential interest rate volatility, we recommend that investors remain duration neutral and opportunistic of sudden rises in int...
As these downgrades will most likely occur before summer arrives, we shall examine the potential unexpected credit exposure a cash investor may be fac...
Further evaluation of the Diffusion of Innovation theory is relevant today in demonstrating how short-duration investors have adapted and, in many cas...
We continue to face a challenging investment environment as front-end supply diminishes, rates remain low, highly-rated credit remains suspect and ris...
Money markets investors are operating in a dangerous environment full of overpriced, risky assets.
A defensive credit overweight will allow investors to navigate future volatility as the European debt crisis continues to unfold in an exceptionally l...
Consequently, as economic growth proves anemic, unemployment remains stubbornly high and inflation is contained within the Fed’s acceptable range, we ...
Our answer to this question, particularly, whether or not investors should extend the durations of their ultra-short liquidity pools, was rooted in ou...
The markets were volatile in the days surrounding the events of the S&P downgrades, additional support measures in Europe, and continued weakness in t...
Rather than fighting against summer headwinds by remaining invested in risky credits (i.e., prime money funds, bank deposits and direct security holdi...
Investors will most certainly discover that the risks and problems lurking deep in the shadows of their fund holdings are more widespread than presume...
As Congressional leaders begin the heated battle to reconcile long-term structural imbalances, both parties agree that the resolution of the impending...
We ask the question: Is this most recent rise in interest rates different than previous interest rate shocks we have observed?
These factors will strengthen the FOMC’s stance of keeping interest rates low for an “extended period” despite inflationary headwinds as seen by recen...
With taxpayers subjected to low income growth and elevated unemployment, state leaders have little option but to focus their deficit-reduction efforts...
We therefore look to the labor market as an indicator of future FOMC actions and of the likelihood of sustainable higher rates going forward.
We encourage investors to review banking relationships, bank deposits, direct security and prime money market holdings for exposure to troubled Europe...
A deeper dive into the mortgage market and the status of key players will help to clarify the issues.
Failing to adjust to the current reality in the money markets will lead to painfully low returns on investment portfolios well into 2012.
The largest hurdle to a sustained economic recovery appears to be the pervasive uncertainty that has entrenched market participants. Removing this unc...
With short interest rates likely to remain range-bound at these low levels for the next 12-18 months, we recommend that investors consider extending a...
This is a cause for concern, and investors should be wary of industries and companies in which the government and regulators become more active player...
The potential effect of deteriorating fundamentals in Europe on the already fragile U.S. economy leads us to push our target for an interest rate hike...
We maintain an underweight view in the financial sector and see severe challenges to the industry going forward.
In an extension of last month’s market commentary, we reemphasize the need for investors to monitor potential credit risks closely both in their portf...
We do not anticipate the Fed raising rates until Q4 2010 at the earliest, and see high probability that action will not be taken until early 2011.
The debate will intensify into 2010 over whether Governor Hoenig’s vote is a sign of changing sentiment at the Fed to focus more on inflationary press...
We welcome the effects of intervention to stabilize the financial system, but we remain concerned about the lingering effects of excessive stimulus sp...
As the credit crunch rippled into nearly every instrument in the debt market, investors wondered how purportedly “safe” securities (so classified base...
In February 2005, PriceWaterhouseCoopers announced that they would no longer qualify auction rate securities as cash equivalents on the balance sheet....
Few people do without automobile insurance even though annual policy premiums can easily run into the thousands of dollars....
In today’s capital markets, investors with large portfolios always seek opportunities to maximize liquidity and return while preserving principal valu...
Organizations frequently explore the question of how to maximize the return on their investment portfolio by debating the benefits or risks of interna...
