The Insight by Oaktree Capital
The Roundup: Top Takeaways from Oaktree’s Quarterly Letters – December 2024 Edition
Dec 12, 2024
Explore the U.S. economy's resilience amid potential inflation, with high-income assets poised for gains. Discover how China's stimulus measures respond to faltering consumer confidence and deflation. Dive into the surge of the convertible bond market, where companies leverage favorable conditions. Lastly, compare international and domestic equity markets, revealing compelling valuation disparities. These insights illuminate the complex landscape investors navigate today.
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Quick takeaways
- The strong U.S. economy, coupled with potential inflationary policies, suggests that investors should focus on high-income assets while remaining vigilant against macroeconomic unpredictability.
- The life sciences sector is experiencing increased demand for non-dilutive debt financing as companies seek alternative funding to support innovation amidst rising healthcare costs.
Deep dives
U.S. Economic Resilience and Investment Strategies
The U.S. economy is exhibiting strong resilience, with GDP growth hitting 2.8% in the third quarter and job growth exceeding expectations. These conditions, coupled with anticipated inflationary policies from the incoming administration, suggest that higher yields may persist in the near future. Investors should focus on high-income assets, such as floating rate instruments, which are particularly well-positioned to benefit from this economic backdrop. However, investors are cautioned against complacency, as macroeconomic conditions can be unpredictable, necessitating careful underwriting and downside protection when pursuing higher returns.
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