AXA Sees “Glorious Chaos” in Credit Bear Market

According to AXA investment Managers, “corporate bonds have fallen so hard they’re officially in a bear market,” says an article in Bloomberg, adding that it “may not be a bad thing.” The article notes, “A string of corporate warnings and the worst returns in a decade may point to the end of the U.S. economic expansion—but AXA is eyeing a potential trough and buying opportunity in the ruins.” Chris Iggo, chief investment officer for fixed… Read More

Gundlach Warns Corporate Bond Investors

An article in Advisor Perspectives gives an overview of comments by DoubleLine Capital chief investment officer Jeffrey Gundlach regarding the corporate bond market. In a podcast last November, Gundlach reportedly argued that the corporate bond market is facing excessive debt and an oversupply of bonds, and believes that “spreads and debt levels are out of sync with one another.” As a result, the article reports, “both corporate and high-yield bonds are at or close to… Read More

Canadian Fintech Uses Machine-Learning For Bond Issuance

A financial technology start-up in Toronto wants to change the way corporate bonds are issued, according to a recent article in The Economist. The company, Overbond, uses “machine-learning algorithms powered by neural networks, a type of artificial intelligence, that predict the timing and pricing of new bond issues,” to, for example, analyze credit ratings and real-time data on secondary trading for a firm and its peers. The company’s services can provide estimates of demand for… Read More

U.S. Companies Facing $4 Trillion in Refinancing

A recent Bloomberg article reports that U.S. companies will need to refinance an estimated $4 trillion in bonds over the next five years (according to Wells Fargo Securities), a concern for investors due to the rising rate environment. “Corporate America,” it says, “partied like never before on cheap money over the past decade, and now comes the hangover,” the article states. Rising rates means that debt service costs will rise which “could push balance sheets… Read More

Gross: More Gloom — and “Enormous” Opportunities

Pimco founder Bill Gross lays out some ugly economic predictions in the latest issue of Forbes, but also offers a tip for how investors can profit from the U.S. financial woes: by buying preferred shares and senior debt of financial companies benefiting from the government’s bailout spending spree. In the past year, writes Forbes’ Bernard Condon, Gross has bought $100 billion worth of such investments. Gross thinks the government will want to ensure that it… Read More

Arnott Sees Huge Opportunities in Bonds

Add Robert Arnott to the list of well-known previously bearish investment managers who are seeing value in the market. “I like investments, if I’m getting paid to bear risk,” Arnott tells Brian Milner of Canada’s Globe and Mail. “And right now, this is one permabear who is strongly bullish on a wide array of markets.” Among those areas are a number of bond markets, including investment-grade and high-yield corporates; emerging-market debt, and inflation-protected government bonds.… Read More