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The current endless array of contradictory economic data releases, particularly in the US, in addition to other factors such as political and trade war rhetoric are making it difficult to decipher what is truly happening in the markets and the economies. John Pattullo, Co-Head of Strategic Fixed Income, discusses the major trends in the markets and provides an insight into the Strategic Fixed Income Team’s current thinking.
While conscious of the current inflationary impulse running through the markets, the team are not convinced that the trend will last more than a few months and that a real breakout into a sustainable higher growth and higher inflation is on its way. However, they remain open-minded and continue to look out for signs that could confirm whether there will be a soft or a hard landing in the US economy in the coming months.
In the video, John Pattullo mentions returns of the S&P 500 Index, the ICE BofAML CCC and Lower US High Yield Index and, ICE BofAML BB US High Yield Index, total returns in local currency, year-to-date to 31 October 2019. Past performance is not a guide to future performance.
Correction: ICE BofAML BB US High Yield Index is up 13.7% year-to-date and not 12% as mentioned in the video.