Market Matters: February 28, 2023
Risk assets broadly declined in February, reversing some of the rally from the last several months.
Credit/Fixed Income
US Manager Universe Statistics: Fourth Quarter 2022
This publication presents manager performance for 36 asset classes and substrategies, showing the median, mean, and key percentiles of return. Relevant indexes for each asset class are also included to provide market context.
Review of Market Performance: Calendar Year 2022
Calendar year 2022 witnessed multi-decade record inflation and central banks responded with rapidly tightening monetary policy. Rising rates saw the correlation between bonds and equities turn positive, contributing to large declines across most asset classes. Funds flows diverted away from growth and momentum strategies, and yield curves flattened with the ten-year/two-year yield curve becoming inverted in most developed markets, signaling economic uncertainty ahead.
Market Matters: January 31, 2023
Risk assets broadly advanced in January, continuing their fourth quarter rally after a difficult 2022.
Market Matters: December 31, 2022
Risk assets closed a tumultuous year on a positive note in fourth quarter.
Will Monetary Policy Become Less of a Headwind for Markets in 2023?
Yes. Markets will be less vulnerable to rising rate risk next year, as the aggressive tightening that has weighed on markets for much of 2022 has moderated more recently since inflation has slowed.
2023 Outlook: Credits
We expect most liquid credits will generate higher returns in 2023 relative to 2022, given the better yields on offer. We also see private credit as offering opportunities, particularly in secondary trading.
2023 Outlook: Interest Rates
We expect interest rates will increase in many developed markets, as implied by market pricing. But we think the Fed will hold rates in restrictive territory for longer than expected. We don’t believe any increases will prompt another European sovereign debt crisis.
Market Matters: November 30, 2022
Asset markets broadly advanced in November. The global equity rally continued as surging Chinese shares helped broader emerging markets outpace developed peers.
Should Credit Investors Expect More Negative Headlines in the Months Ahead?
Yes. The combination of rising interest rates and a deteriorating earnings outlook is likely to generate ample negative headlines about credit in the months ahead.