The Performance of “Deflation Assets” vs. “Inflation Assets” Interesting chart showing the performance of “Deflation Asset” vs. “Inflation Assets” since 1960. “Deflation Assets”: Government Bonds, US Investment Grade, S&P 500, US Consumer Discretionary, Growth and US High Yield “Inflation Assets”: TIPS, EAFE, US Banks, Value and Cash Image: BofA Merrill Lynch
The U.S. Corporate Bond Debt Rated ‘BBB’ Exceeds $3 trillion The U.S. corporate bond debt rated ‘BBB’ exceeds $3 trillion. That’s 53% of investment-grade bonds in the United States. Any drop in the credit ratings could amplify the next recession: many investment grade investors own BBB-rated bonds, but are not allowed to hold junk-rated bonds.…
Share of Market Value in Bloomberg Barclays USD IG Since 1990, the amount of BBB-rated bonds has doubled. This is only one step away from junk bonds. Keep in mind that many investment grade investors own BBB-rated bonds, but they are not allowed to hold junk-rated bonds. So, any drop in the credit ratings could…
Leveraged loans pose risks as corporate debt increases A leveraged loan is debt issued by a company that has below investment grade credit ratings and a considerable amount of debt with high interest rates. In this video, Brian Cheung of Yahoo Finance, explains why leveraged loans pose risks as corporate debt increases.
Median Annual S&P 500 Total Return Based on Nominal 10-Year U.S. Treasury Yield There is no fixed relationship between bond yields and equity returns. Their correlation changes over time, driven by inflation dynamics, rate expectations, and shifts in credit risk. Image: Goldman Sachs Global Investment Research
Factset S&P 500 Annual Bottom Up EPS Actual and Estimates Forecast upgrades for 2026 and 2027 keep rolling in, giving the S&P 500 another reason to push higher. The bulls still have the wind at their backs, and momentum isn’t showing any signs of slowing. Image: Carson Investment Research
IG Bond Flows Investment-grade corporate bond funds continue to attract investors, resulting in the biggest 5-week inflow. Image: BofA Global Investment Strategy
China GDP Growth Consensus Estimates GDP upgrades are likely to spur interest in China’s markets, encouraging asset allocation towards sectors that align with the country’s economic transformation. Image: BofA Global Investment Strategy
Cumulative Bond Flows Government bonds and investment-grade (IG) corporate bonds have experienced substantial inflows over the last 12 months. Image: Deutsche Bank Asset Allocation
Cumulative Annual Flows to IG Bond Funds Investment-Grade (IG) corporate bond funds have experienced a surge in investor interest and confidence this year, resulting in robust inflows into this asset class. Image: BofA Global Investment Strategy
IG and HY Bond Fund Flows It is common for investors to prefer investment-grade (IG) bonds over high-yield (HY) bonds when seeking lower-risk investments. Image: BofA Global Investment Strategy