US GDP came out this week, beating expectations.
We think it’s important to continue to monitor data as it comes out to watch for signs of weakness.
-The US stock market finished up for the fifth week in a row.
-The US high yield bond market continues on a tear.
-The high yield bond market has had its strongest start to the year since 2001.
We think that the high yield bond market appears to becoming more in favor relative to leveraged loans when it comes to financing leveraged buyouts.
A portfolio manager at Allianz Global Investors has said that right now companies would rather go to the high yield bond market than the leveraged loan market.
Have a great weekend!
Disclosures & Supplement:
The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The information provided does not take into account the specific objectives, financial situation or particular needs of any specific person. Diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income. Forecasts or projections of investment outcomes in investment plans are estimates only, based upon numerous assumptions about future capital markets returns and economic factors. As estimates, they are imprecise and hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Investing entails risk including the possible loss of principal and there is no assurance that the investment will provide positive performance over any period of time. Fourth Quarter GDP growth data was in reference to the Western Asset Management article, “4Q GDP Shows Slower Growth, but Better Than Expected” by Senior Economist Michael Bazdarich. The US stock market is in reference to the S&P 500 index and from the Bloomberg article, “Stocks Rise for Fifth Straight Week; Oil Tumbles: Markets Wrap” by By Reade Pickert and Sarah Ponczek. An index is unmanaged, does not reflect management or trading fees, and one cannot invest directly in an index. Statements regarding the high yield bond market performance was in reference to the Bloomberg article, “Biggest LBO Financing of 2019 Shows Junk Bonds Regaining Fervor” by Lisa Lee. Statements about the high yield bond market becoming more in favor relative to leveraged loans were in reference to the same Bloomberg article by Lisa Lee.