The global economy is showing early signs of a recovery and although the outlook remains uncertain, many investors are starting to think about a world beyond COVID-19 – where the outcome of significant fiscal stimulus is the return of inflation. How would listed infrastructure fare against a backdrop of higher bond yields and rising interest-rate expectations?
The 2020 US election could lead to major changes on tax, spending, climate change and healthcare – but maybe not trade. Labor Day on the first Monday in September represents the unofficial starting line for final US presidential election campaigning, following the national conventions of both major parties. While the conventions and election discourse have focused on the character of the candidates, rather than policy, we can begin to decipher what a second Republican term under Donald Trump or the Democratic presidency of Joe Biden would look like.
Today’s headlines have been dominated by the news that Japanese prime minister Shinzo Abe has announced his resignation due to health reasons. While markets seem somewhat spooked by this, there’s reason to see this as a good entry point into Japanese assets rather than a reason to run away.
As we emerge from the immediacy of the coronavirus pandemic, the scale of the damage becomes ever more apparent. The human toll is stark, with the virus reported to have taken close to three quarters…
While investors’ knowledge about Responsible Investing has generally improved over the past few years, the increasing diversity of thought in the market has created new layers of confusion. Overall, investors are better equipped to grasp the distinctions between ESG and impact investing, but remain rather perplexed about the differences between sustainable and impact investing, often mixing one with the other. From a distance, sustainable and impact investing appear quite similar. A closer look, however, reveals meaningful differences.
The measures taken to slow the coronavirus pandemic have effectively shut down swathes of the global economy, prompting the sharpest downturn in generations.
We are currently in the throes of the sharpest and largest economic downturn the modern global economy has ever seen. However, as I wrote in March this is very different from previous recessions.
When we talk about market ‘episodes,’ we often mean periods where investors appear to give up on their own long term beliefs due to what prices are doing right now.
It is common to see correlated declines across range of apparently unrelated asset classes during these episodes, which was exactly what we saw in March. Such periods of heightened correlation can be highly revealing of the changing beliefs embedded in markets and how behavioural forces might be playing a role.
Airlines face an uphill battle. The demand shock on the back of the COVID-19 pandemic has seen the Services sector hit particularly hard in this downturn, not least the Commercial Aerospace industry. It’s difficult to read the latest headlines without encountering a story on potential airline bankruptcies, mass job losses and urgent bids for government assistance. Some governments including the US and France have been more forthcoming here, but targeted rescue funds have come with strict conditions attached.
While passive investments have grown in size and prominence in recent years, we believe there are several crucial advantages for investors in choosing active management when investing in fixed income during the current climate.
James Carville was candidate Bill Clinton’s chief strategist for the 1992 election. When asked to emphasise the single most important issue to voters, Carville responded: “It’s the economy, stupid!”
With lockdown continuing and the tone of news flow deteriorating, it can be hard to reconcile the recent bounce in equity markets with how we may feel personally.
The coronavirus pandemic and low oil prices have led to a surge in ‘fallen angels’, companies downgraded from investment grade to sub-investment grade. Ford, Kraft Heinz, Renault and Marks & Spencer are amongst the issuers that have become fallen angels so far this year.
A short note on the current investment opportunities being presented in global high yield bond markets, and the different high yield funds M&G Investments has in its armoury.
As the novel coronavirus outbreak continues to cross the globe, and while we try to adapt and manage the risk, mitigate the economic impact and heed scientific advice, questions remain.
Listen on demand to Jim Leaviss, Fund Manager of the M&G Global Macro Bond Fund, as he discusses the outlook for the global bond and currency markets, and provides an update on the fund's key positioning themes, including its duration, credit risk and currency exposures.
At M&G Investments, our main priority as we respond to COVID-19 is the safety and wellbeing of our colleagues and continuing to deliver the highest level of service to our clients and customers.
The Chinese market has held up remarkably well since this crisis began. In fact, it’s one of the best performing equity markets globally, which is perhaps surprising given that the virus originated there and, indeed, the Chinese economy has always been perceived to be a proxy for global economic growth.
Emerging markets have recently seen other impacts than the tragic ones of COVID-19 outbreaks on their societies and economies, with spreads widening considerably. Three factors have been at play. First, was a rapid sell-off in global stock markets that followed the realisation that the global economy is heading for a recession. Second, investors shifted to intense risk aversion and the demand …
A lot can change in a month. While many of us grapple with the new daily regime of lockdowns, remote working, home schooling and scouring the shops for that last fabled toilet roll, it’s worth taking a moment to review what has happened to credit markets over the past few weeks. Even in social isolation, one would be hard pressed to miss news headlines reporting the sell off in equities and…