Fixed Income Investment Strategy — January 2024
January 17, 2024 — Fixed Income Investment Strategy provides an overview of Sage’s market outlook and sector positioning.
- Strong economic momentum in the back half of 2023 and expectations of a Fed pivot have provided an optimistic tone to the consensus macro view, but we see a challenging backdrop ahead.
- Our base case is a “softish” landing with weak growth, as consensus predicts, but a higher probability of one or two quarters being pushed into modestly negative territory. Weaker growth should continue to moderate inflation, but we expect the deflationary pace to be less impressive in 2024, with supply-side shocks now largely normalized.
- Heading into 2024 we are focused on quality. We believe a full duration position makes sense at this point in the cycle to capture upside and hedge against macro risks. For credit, we see spreads well supported by demand for yield, but given spread levels and overall economic risks, the plan is to capture the yield of a full allocation but stay defensive and low beta, allowing security selection to provide the alpha opportunities.
As Tailwinds Fade, Excess Return Lies in Security Selection
January 17, 2024 -- Right now, the spread on corporate bonds stands at 97 basis points, which places it in the 36% percentile of spreads going back 1990 . . .
Fixed Income Perspectives — January 2024
January 11, 2024 -- This presentation provides an overview of our market outlook and key themes, and it illustrates how Sage is positioned in the current environment.
The Market Environment for Short-Term Investors
January 11, 2024 -- A significant amount of assets -- $6 trillion -- are currently parked in money market funds. With the Fed expected to cut rates in 2024 . . .