Bloomberg Surveillance

Factors Driving Equity and Bond Investors amid Uncertainty

Apr 30, 2025
Amanda Lynam, Head of Macro Credit Research at BlackRock, and Sinjin Bowron, Senior Portfolio Manager at Beach Point Capital, dive into the complexities of credit markets in today’s uncertain environment. They discuss the implications of corporate credit spreads and the importance of risk assessment in volatile times. The duo also examines the influence of ETFs on investment strategies and economic indicators shaping the market landscape. Insights on adapting to bond yield changes in a weakening dollar provide valuable perspectives for investors navigating this challenging terrain.
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INSIGHT

Real Yields Reflect Growth Outlook

  • Real yields are dropping due to expectations of moderated U.S. growth.
  • Corporate earnings reveal difficulty distinguishing temporary from real demand amid trade uncertainty.
INSIGHT

Fed and Curve Dynamics

  • Expect steeper yield curves driven by budget deficits and inflation concerns.
  • Fed likely won't cut rates preemptively, waiting for clear labor market deterioration.
INSIGHT

High Yield Bonds Outperform Equities

  • Total returns in corporate bonds have recovered due to higher yields compounding.
  • Surprisingly, lowest quality high yield segments outperformed equity markets year to date.
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