UBS On-Air: Market Moves
Fixed Income Conversation Corner with Alex Obaza (T.Rowe Price) and Leslie Falconio (UBS CIO)
Aug 7, 2024
Join Alex Obaza, Portfolio Manager at T.Rowe Price, and Leslie Falconio, Head of Taxable Fixed Income Strategy Americas at UBS, as they explore the evolving landscape for fixed income investors. They discuss the U.S. economy's resilience amid recession fears and the implications of anticipated Fed rate cuts. The pair highlight strategic opportunities in high-quality corporate bonds and agency mortgage-backed securities, advising a cautious yet proactive approach to navigating today's market challenges.
21:50
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Quick takeaways
- The U.S. economy displays resilience with reliable indicators suggesting a stronger foundation amidst fears of a potential downturn.
- The fixed income landscape is evolving towards higher-quality investments, highlighting opportunities in investment-grade corporates and securitized markets.
Deep dives
Resilient Economic Outlook
The speaker suggests that the U.S. economy is likely to be more resilient than current expectations indicate. Despite concerns surrounding pandemic savings depletion and a cooling labor market, reliable indicators such as initial jobless claims and S&P 500 operating margins have not shown signs of significant decline. Observations from the recent earnings season further reveal signs of improved consumer credit among banks and broadening earnings growth across sectors, suggesting a stronger economic foundation. This positive viewpoint challenges common investor narratives that associate inverted yield curves with imminent recessions, emphasizing a need for cautious optimism.
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