What the Bond Market Is Telling Investors

The video discusses the economic trends following Brexit, highlighting the rise in global yields and inflation expectations. It examines corporate indebtedness and the potential risks associated with artificially low rates. The impact of reflation on high yield bonds and the investment grade market is analyzed, noting the slowdown in buybacks. The video concludes with strategies for positioning in the reflation trade, emphasizing an overweight in credit due to central banks' influence on risk markets.

What was the primary economic change discussed in relation to Brexit?

• Increase in global yields

• Reduction in trade tariffs

• Decrease in corporate taxes

• Rise in unemployment rates

How have companies primarily used the low interest rates?

• Investing in new technologies

• Increasing employee wages

• Stock buybacks and mergers

• Expanding into new markets

What is a potential risk for high yield bonds in a slowing growth economy?

• Increased refinancing needs

• Higher dividend payouts

• Lower interest rates

• Reduced corporate taxes

What has been the trend in corporate credit performance compared to treasury bonds?

• Corporate credit has outperformed

• Corporate credit has underperformed

• Treasury bonds have outperformed

• Both have performed equally

What is the current investment strategy regarding credit and Treasurys?

• Overweight credit

• Avoid both markets

• Equal weight in both

• Overweight Treasurys