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Feb 16
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LONG
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John (iShares)
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"We are seeing people really allocating to credit as a way to perhaps diversify their portfolios from government bonds where I do see more risk from fiscal spend... Last year we saw more than 50% of flows into bond ETFs going into European fixed income strategies." Investors are fleeing U.S. Treasuries due to fiscal profligacy/volatility and moving into Investment Grade (IG) credit and European assets. The "structural favoritism towards Europe" suggests undervalued assets relative to the U.S. LONG High Quality Corporate Credit and European fixed income/equities. Contagion from U.S. volatility or a resurgence of inflation in the Eurozone. |
Bloomberg Markets
Memory Chip Shortage is Global Crisis in the ...
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Feb 12
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LONG
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Robert Schiffman
Credit Analyst, Bloomberg Intelligence
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Big Tech is issuing record amounts of debt (e.g., Alphabet) despite having cash. Tech companies are using debt for Capex (growth) rather than buybacks. This is credit-positive because it builds future cash flow assets. Spreads are tight, but demand is overwhelming. LONG High-Grade Tech Bonds. Over-leverage if AI returns do not materialize. |
Bloomberg Markets
Old Economy Stocks Surge Again | Open Interes...
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Feb 12
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LONG
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Priya Misra
Portfolio Manager, J.P. Morgan Asset Management
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"We continue to characterize the job market as a low hire, low fire one... fragile... We're finding high quality credit... and then we like to hedge... owning some duration." The economy is not overheating, it is stalling at a high level. In this environment, you want yield (Credit) but you need protection against a sudden labor market crack (Treasuries/Duration). Long Barbell Strategy (Credit + Duration). Inflation re-accelerates, forcing yields higher and hurting both bonds and credit spreads. |
Bloomberg Markets
Stocks Climb; Nuveen to Buy Schroders; Anthro...
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