Global high yield markets saw a sharp sell-off in June, taking year-to-date (YTD) returns deeper into negative territory to -16.80%. Persistent inflation through 1H, and a more front-loaded response from the Fed drove bond yields higher.
However, this has now led markets to price in the probability of a slowdown and even possibly a recession. Upside surprises on core US CPI lately, along with weaker manufacturing activity and outlook, as well as declines in consumer confidence led to fears that the past few months’ tightening in financial conditions has already led to a slowdown in activity taking hold.
Continued geopolitical risks and high energy prices have been adding another sizable layer of risk.
This information is for informational purposes only, not to be construed as investment advice or a recommendation or offer to buy or sell any security. Investors should always obtain and read an up-to-date investment services description or prospectus before deciding whether to appoint an investment manager or to invest in a fund. Any views expressed herein are those of the author(s), are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. There are no guarantees regarding the achievement of investment objectives, target returns, portfolio construction, allocations or measurements such as alpha, tracking error, stock weightings and other information ratios. The views and strategies described may not be suitable for all investors. SSGA does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. Investing entails risks and there can be no assurance that SSGA will achieve profits or avoid incurring losses.
Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted.
Images of NYSE Group, Inc. are used with permission of NYSE Group, Inc. Neither NYSE Group, Inc. nor its affiliated companies sponsor, approve of or endorse the contents of this program. Neither NYSE Group, Inc. nor its affiliated companies recommend or make any representation as to possible benefits from any securities or investments.