News > Financial Services

Interest Rates: Naturally Negative?
It is no longer absurd to think that the nominal yield on U.S. Treasury securities could go negative. Last week the German 30-year government bond yield dipped into negative territory for the first time ever. Around $14 trillion of outstanding bonds worldwide, or 25% of the market, now trade at negative yields, according to Bloomberg. What was once viewed as
On the Other Hand
Memo to: Oaktree Clients From: Howard Marks Re: On the Other Hand It often happens that just as I’m about to release a memo, I come across something that absolutely has to be incorporated. That was the case on June 12, the day “This Time It’s Different” was published. I was reading a first-quarter report from Ruffer, a London-based money
Rising Risk of No-Deal Brexit
With the pound sliding to two-year lows, currency markets are signaling a higher probability of a no-deal Brexit. But the fallout from no deal would hurt the rest of Europe, too, and add to downward pressure on euro-area bond yields. Much has changed since we wrote our last Brexit update in May: the UK has a new prime minister (Boris
Outlook on Europe
European equity markets have been caught in the middle of opposing forces, mainly growing tensions around global trade and increasingly dovish central banks. This has pushed European government bond yields to fresh lows and caused bond-sensitive sectors to climb higher, further stretching valuations. In this environment, it is becoming increasingly important for investors to be discerning, to focus on fundamentals
Weighing the Week Ahead: Four Risky Hurdles
The economic calendar is massive, and that is just the start. Earnings season is in full swing. US/China trade talks resume. And finally, the FOMC announces its interest rate decisions. Expect plenty of commentary on the individual news items, but the real question is: How deftly can the market leap the four hurdles? (Data, Earnings, Fed, and Trade = DEFT).
Stage is Set for a Rate Cut, while Trade Contagion Spreads to Japan and Korea
School schedules make summer an ideal time to get away. During those vacations, families often encourage loved ones to make a clean break from business, to reconnect and recharge. And so, a worker’s greatest wish is for a quiet summer news cycle. But in my own experience, that wish is rarely fulfilled. In 2008, I was in a craft barn
Europe at a Crossroads: The Time for Bolder Policy Action Is at Hand
Rick Rieder argues that anemic growth in Europe is a longstanding problem that today requires a bold solution. Institutionally, the ECB can offer potentially effective, if unconventional, help. A shorter version of this commentary appeared in the Financial Times on July 22, 2019. A specter is haunting Europe – the specter of anemic growth. Ten years have passed since the
High-Yield Credit in a Fed Easing Cycle
High-yield corporate bond spreads and bank loan discount margins typically widen when the Fed is lowering interest rates. Here are the key takeaways from our third quarter High-Yield and Bank Loan Outlook report: Investors may be tempted to go down in quality in anticipation of a Fed-induced rally in leveraged credit. History suggests this would be ill-advised. On average since
Brazil Takes Big Reform Step
Pension funding has been an issue in many parts of the world and has certainly been a hot topic in Brazil. President Jair Bolsonaro’s election ignited market optimism on promises to reform pensions to get Brazil’s fiscal house on a firmer footing. The probability of this being delivered has increased considerably after approval of a new pension reform bill in
Farewell to Data Dependence
Until recently, Fed Chair, Jerome Powell sounded a consistent theme: the Fed is data dependent and will stay that way, unswayed by noise or pressure from politicians. When the FOMC released its rate decision last month, it got as dovish as it could without actually cutting short-term rates. It downgraded its assessment of economic growth from "solid" to "moderate" while