Can Healthcare Companies Withstand a Blue Wave?
Democrats could sweep the November elections according to many independent polls and political experts. What would that mean for the healthcare and pharmaceutical sectors, which have shown sensitivity to the political landscape?
EM Debt Defaults Reveal Distinctions Within the Asset Class
When it comes to thinking about opportunities and risks in emerging markets (EM), old habits die hard. Investors and news articles tend to treat EM like one homogenous opportunity set, glossing over the range of underlying asset classes, regions, countries and currencies—each with distinct characteristics.
Deal or No Deal, the UK Faces Risks Beyond Brexit
The December deadline for a Brexit deal is quickly approaching. One consequence of Brexit was that firms couldn’t plan—or they were forced to plan for a no-deal scenario. It’s a big reason why the pace of business investment was so sluggish in the years since the 2016 referendum...
US Consumers Appearing Less Confident
Consumers are traditionally the engine of the US economy, and I believe consumer confidence is an important indicator of consumer intentions. The August reading of the Conference Board’s Consumer Confidence Index suggests that consumers are not feeling optimistic.
US-China Relations: What’s New and What’s Next?
US-China relations are built on a fragile web of complex issues. Recently, we’ve seen headlines about technology, sovereignty and human rights flare up, and the Phase 1 trade deal review has been delayed indefinitely. Here, I review these flashpoints and how they could affect US-China relations.
Chart of the Week: World Trade Volumes Have Collapsed
The global pandemic has devastated global trade. It appears that some of the drop in trade is simply related to lower domestic demand everywhere as spending on consumer goods and investment goods has been slashed.
Bank Loans: Three Questions on What’s Changed Since the March Madness
In March, Bank Loans Portfolio Manager John Bell saw three different roads back to par, with market recovery in 6-12 months the most likely. How has the recent market activity changed his view?
Global Fixed Income: Three Questions on What's Changed Since the March Madness
In March, the Loomis Sayles Global Fixed Income Team anticipated the economy could experience sluggish growth in the third quarter after a downturn in the second. Given the ongoing vagaries of quarantines and shutdowns, how has their growth outlook changed?
Loomis Sayles' Investment Outlook – July 2020
Investors appear firmly focused on the economic recovery ahead. With Fed support and the potential for additional fiscal stimulus, we expect capital to shift toward riskier assets like credit and equities. However, we acknowledge that risk assets are largely priced for the better days we see ahead—a substantial decline in economic conditions could send markets into a corresponding decline.
Homebuilders: Holding Up Better Than Expected
The homebuilding and building products industries have held up quite well during this economic downturn compared to the material negative impact they experienced during the global financial crisis. After an initial demand shock resulting from shelter-in-place orders, housing activity has been trending more positively than I would have expected in May and June.
Global GDP Themes and Forecasts
The COVID-19 pandemic has tipped the global economy into what appears to be the deepest recession in decades. No region has escaped the impact, but some have fared better than others. Read on for a visual snapshot of what 2020 growth may look like across the globe.
The Surprising Leverage Profile of EM Corporates
It may surprise some investors to learn that the leverage profile of emerging market (EM) corporations appears to be in better shape than that of their US counterparts. Maybe it’s a matter of “been there, done that.”
High-Frequency Data & COVID-19: Using Groceries to Track the COVID Response
It can be difficult to give a fair representation of each country’s market response to the COVID-19 outbreak. Each nation has varying initial conditions, population responses, and approaches to quarantines.
Bifurcation & Opportunity: Current Take on Credit Markets
Credit markets are bifurcated, and there’s a major yield difference between the perceived winners and losers. This trend is creating a lot of questions—and potential value—for credit investors. Here’s my take on the current environment and why I’m excited about the opportunity it’s creating.
When the Unexpected Happens: Negative Oil Prices and Financial Models
When storage capacity is near its limits, how do oil producers offload their inventory? One way is to incentivize buyers with negative prices. This is precisely what happened on April 20, the day before the May WTI futures contract expired.
High-Frequency Data & COVID-19: Investing for the Next Phase of the Cycle
Investors and financial markets are forward-looking. They are constantly trying to anticipate the future and how to position for it. In a COVID-19 world, where economic uncertainty and financial market conditions are at extremes, that’s no easy task.
The Fed Creates the Municipal Lending Facility
On April 9, the Federal Reserve announced the creation of the Municipal Lending Facility (MLF), aimed at allowing state and local (S&L) governments access to credit so that they may continue to function in these hard times.
The FIMA Repo Facility: The Fed's Solution to the Global US Dollar Crunch
On March 31, the Federal Reserve announced the creation of another new liquidity facility; this one is aimed at central banks and international institutions. This new facility is a temporary repurchase agreement facility for Foreign and International Monetary Authorities (FIMA)...
Treasury Liquidity on the Rebound
It’s amazing what you can achieve with a budget of $75 billion per day. Since mid-March, the Federal Reserve has worked relentlessly to unfreeze Treasury markets. The results of its asset purchases are starting to show. Treasury liquidity—one of the most unusual and troubling pain points of this liquidity crisis—has vastly improved since quantitative easing (QE) started.
Loomis Sayles' Investment Outlook - April 2020
COVID-19 continues to cause havoc across global economies—a trend that, unfortunately, is likely to continue through this quarter. However, we anticipate a broad rebound later this year on the back of meaningful stimulus recently put in place.
Jae Park and Michael Giles on the COVID-19 Crisis, Credit Cycle and Investing with Conviction
It’s been said before, but the truth appears to be this crisis is very different than others we’ve experienced. It's not an asset bubble tied to exuberance, greed, default, fraud or mismanagement of a country, currencies or anything else in our manmade economic system.
Fed to the Rescue: Providing Liquidity to the Corporate Bond Market
To help support investment-grade corporate bond market liquidity, the Federal Reserve introduced two facilities March 23: the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF).
Oil: A Price War with No Likely Winners
Oil’s back below $30 and suddenly it feels like 2016 all over again. Only it’s not. Saudi Arabia’s 2015-2016 production boom was a war on US shale. This time, Saudi Arabia is waging a war for market share against Russia and the US. It’s a war with no winners, least of all US fracking.
Municipal Fixed Income Update
The municipal fixed income market, like most other asset classes, is experiencing unprecedented volatility. Large mutual fund outflows are adding to the volatility as investors seek to add to cash reserves by selling what may be deemed easiest to sell.
COVID-19 and the Loan Market
We expect to see a combination of anti-viral medications and vaccines develop over 6 to 12 months globally. We are seeing daily positive articles on the effectiveness of anti-virals from other countries. Vaccine development appears to be moving very quickly, and there is potential for a vaccine to get to people as soon as the end of 2020.
Loomis Sayles’ Core Plus Fixed Income Team Talks Volatility and Managing Through the Cycle
On Thursday, March 12, Rick Raczkowski, co-lead portfolio manager of Core Plus Fixed Income participated in a conference call with clients to discuss recent events and market activity. He discussed that while there is a lot of fear and uncertainty in the market right now he and co-lead portfolio manager Peter Palfrey, are maintaining their discipline of managing through the cycle as they have for the past 20 years.
COVID-19, Monetary and Fiscal Actions, Credit Markets and Future Tailwinds
On Friday, March 13, Loomis Sayles’ Global Fixed Income team held a conference call to discuss the current market environment, policy responses and potential opportunities. Here, portfolio managers Lynda Schweitzer and Scott Service summarized a few key points.
Can the Fed Fix the Treasury Market?
When the world’s biggest debt market starts having major liquidity issues, investor panic rises to a whole new level. On March 12 and 13, after about a week of extraordinary dysfunction in the US Treasury market, the Federal Reserve issued a major crisis response, expanding Treasury purchases and repurchase operations to boost liquidity and shore up so-called risk-free assets.
Loomis Sayles’ Full Discretion Team Talks COVID-19, Policy, Credit and New Territory
On Thursday, March 12, Loomis Sayles’ Full Discretion team held a conference call to discuss current conditions, upcoming challenges and potential portfolio positioning and solutions. Here, portfolio managers Matt Eagan and Elaine Stokes summarized a few key points.
Big-Picture Insights from the Loomis Sayles Alpha Strategies Team
The Loomis Sayles Alpha Strategies team shares some insights as markets grapple with three issues: the impact of COVID-19, an oil fight and a crisis of confidence in Western governments.