4Q 2019 market outlook in 3 charts
Yield can still be found in a low rate, low inflation and low yield environment.
Bulls dominated bears in fixed income for the first half of the year. But in the third quarter, some economic storm clouds are gathering. Three questions could be at the forefront of investors’ minds as they seek potential fixed income opportunities.
The global fixed income market has had a good half year, as the tables show. The US Federal Reserve (the Fed) early this year decided to end monetary tightening and that took pressure off the markets. Other major central banks also turned dovish.
Fixed income sector returns for respective periods1
Moving into the third quarter, our Global Fixed Income, Currency & Commodities (GFICC) team sees some economic storm clouds gathering. We’ve identified three questions at the forefront of investors’ minds as they seek potential fixed income opportunities.
Unemployment trending lower globally3
The Fed still misses the inflation target of 2%5,6
Expansions are still vulnerable to policy shifts. The binary outcome of the trade conflict is almost impossible for markets to accurately price. We believe it’s time to be less complacent, get closer to neutral and tilt portfolios more conservatively.
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