Problems could show up first in the market for leveraged loans and then move to high-yield bonds and investment-grade issues.
It’s a great time to be investing in bonds. They’re paying much higher yields than they have in a long time. For example, the yield on the 10-year Treasury note rose to 4.34% in mid-August, its highest level since November 2007. Yields could remain elevated for a while, too, as it looks like the Federal Reserve will keep interest rates high for some time.
While the credit cycle is turning down, it’s still early days. That’s an idea that Torsten Sløk, chief economist at Apollo Global Management, finds worrisome, rather than reassuring. In other words, things could get a lot worse from here for credit markets. Sløk titled one recent note to investors, “A default cycle has started and investors aren’t paying attention.”
Investment strategists who think the economy will head south next year routinely recommend that investors avoid leveraged loans. Gene Goldman, chief investment officer at Cetera Investment Management, says he doesn’t like the high-yield bond sector but still likes it better than leveraged loans. Still, there are some early signs of investor concern about loan quality. Business development companies, publicly traded companies that hold business loans, marked down the value of loans in the portfolios in the second quarter to 96% of cost, according to equity research from Oppenheimer.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
| U.S. 2 Year Treasury Note OverviewTMUBMUSD02Y | A complete U.S. 2 Year Treasury Note bond overview by MarketWatch. View the latest bond prices, bond market news and bond rates.
Read more »
| U.S. 10 Year Treasury Note OverviewTMUBMUSD10Y | A complete U.S. 10 Year Treasury Note bond overview by MarketWatch. View the latest bond prices, bond market news and bond rates.
Read more »
12th Annual James Bond Soiree12th Annual James Bond Soiree Unlock your inner 007, while supporting the National Alliance on Mental Illness. Join the 12th Annual James Bond Soiree, the internationally recognized event celebrating the luxury lifestyle of Bond. This year’s event is a unique secret agent, masquerade experience: masquerade masks and agent ID required for entry! It will also feature open bar, hors d’oeuvres, sunset fashion showcase, DJs spinning Bond-inspired remixes, casino games, declassified missions, celebrity appearances, and much more.
Read more »
Gorilla Tag Ghost Server Codes (August 2023)Beware the spooky monkeys.
Read more »
Editorial: As a slow-motion banking crisis unfolds, consumers should bewareThere's no need to panic over the state of America's banks. But here is why customers should be wary.
Read more »
Jaw-Dropping 74% of Shiba Inu (SHIB) Holders Suffer Losses Amid Shibarium OutageAlmost one million SHIB holders remain trapped in losses, while Shibarium fails to successfully launch
Read more »