Market Matters: June 2020
Risk assets broadly rallied in second quarter, sharply reversing course after experiencing extraordinary market turmoil in February and March.
Credit/Fixed Income
Research Digest: Public Debt
Capital Markets Research (CMR) is pleased to announce Research Digest, a new and improved version of Investment Publications Highlights (IPH). The inaugural edition explores the costs and benefits of public debt. The debate surrounding public debt is not a new economic or policy issue, but it has garnered increased attention following the rapid increase in public debt since the 2007–09 global financial crisis and the massive increase in fiscal spending in 2020 to address the COVID-19 crisis.
Room to Run for Muni Bonds
Despite the recent volatility, in our view, munis continue to be an attractive alternative to both Treasuries and high-quality corporates for long-term taxable investors. Even tax-exempt investors that typically don’t hold munis may want to consider them in the current environment given relative valuations and credit fundamentals.
Market Matters: May 2020
Risk assets advanced again in May, building on April’s strong price momentum.
Finding Credit Opportunities Amid the Coronavirus Crisis
COVID-19 plunged the global economy into a deep recession triggering concern over a surge in corporate defaults. Recent monetary and fiscal stimulus has allowed a rebound in credit assets ranging from high-yield bonds to highly rated asset-backed securities, but other markets remain dislocated.
US Manager Universe Statistics: First Quarter 2020
This publication presents manager performance for 37 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.
Market Matters: April 2020
Most risk assets surged in April, partially recovering from steep losses during first quarter’s volatile market environment. Global equities bounced back with double-digit gains, driven largely by US shares.
Life After Zero: Reassessing the Role of Sovereign Bonds with Negative Nominal Yields
In recent weeks, as the COVID-19 pandemic spreads across the globe, nominal high-quality sovereign bond yields throughout developed markets have plummeted toward zero, increasing the likelihood that most developed markets may soon need to contend with negative yields, and leading investors to question whether high-quality sovereign bonds are still the best form of insurance. In light of these developments, we examine the historical safe-haven characteristics of high-quality sovereign bonds and assesses whether they remain a viable safe-haven asset when nominal yields are negative.
Credit Spreads Take Pensions for a Wild Ride
As the COVID-19 outbreak has escalated in the United States, sponsors of single employer–defined benefit pension plans have experienced a roller coaster ride. Avoiding, or at least cushioning, another wild ride requires a well-designed hedging strategy that accounts for credit spreads. We provide context for this rapidly evolving spread environment and potential responses.
Market Matters: March 2020
Global risk assets suffered major drawdowns comparable to the global financial crisis in first quarter.