Thoughts on the Market Investors Look Beyond U.S. for Opportunities
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Mar 21, 2025 Investors are shifting focus from U.S. markets to international opportunities due to lower growth and inflation worries. The podcast dives into the nuances of high-yield bonds, comparing the U.S. landscape with emerging markets. Analysts discuss the potential of emerging market debt and positive trends in ratings amid tariff challenges. They highlight strategies for navigating risks in U.S. retail, focusing on the disparity between specialty shops and larger department stores in the context of changing policies.
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Key Metrics for EM High-Yield Bonds
- Key metrics for assessing EM high-yield bond risk include fundamentals, technicals, and valuations.
- These factors help determine if the potential return compensates for the risk.
EM vs US High-Yield Bonds
- U.S. high-yield bonds represent loans to U.S. companies.
- Emerging market (EM) high-yield bonds represent loans to countries.
EM High-Yield Fundamentals
- EM high-yield fundamentals show steady improvement since the COVID pandemic, with better debt and fiscal ratios.
- However, debt levels remain high relative to history, and expenditures still exceed revenues.