WIth political conventions taking center stage, this week's entry looks at the candidates views on the economy. BlackRock also weighs in on potential strategic adjustments given a post-Covid world. The industries most affected by COVID have not recovered to pre-crisis levels, which may cause an increase in corporate defaults--it also may create opportunity in high yield bonds.
Here's what I'm reading this week:
The Covid-19 pandemic has transformed the investment landscape in a matter of months, prompting a rethink of strategic asset allocation views.
Negotiations over a new U.S. fiscal package looked to have stalled. We still expect a sizable package, but risks of a no-deal outcome are growing.
Markets will focus on the annual Jackson Hole meeting for what potential policy framework changes might imply for the medium-term inflation outlook.
Summary of candidates views on economy, trade, & big tech -- Meeder Investments
Corporate Defaults Have Jumped -- Capital Group
- Corporate defaults have jumped, but the default rate has been low for a very long time
- The market for lower rated companies is much less efficient, so there’s more opportunity to differentiate and find value
- Especially over the long term, returns on high-yield bonds (BB/Ba and lower) can provide investors who are willing to take a little higher risk of loss a significant income boost