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Global High Yield Update – Q3 2024

Executive Summary:

  • Data releases continue to support a US soft-landing narrative where growth has been slowing, but still robust enough to avoid an earnings recession — this is supportive for credit
  • The lack of shareholder-friendly excesses and large problem sectors in this cycle, strong corporate earnings, solid fundamentals and improving credit-lending conditions are all supportive for the HY asset class to experience a longer, but shallower defaults cycle.
  • Global HY spreads can remain well-anchored at the lower ends of the range, even as the market digests rate cuts in the face of a global economy which is largely doing fine. Yields in the range of 7% are still at reasonably healthy levels, and total return-oriented investors need not position too conservatively.

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