July 2024 | Second-quarter returns were positive but uncompelling as not offering a premium to cash. Several of the economic indicators we monitor are indicating softer growth may lie ahead. Although we identify multiple positive factors for high yield, valuations are challenging. With spreads tight and the economy likely to slow, we are positioning portfolios defensively in anticipation of spread widening.
01 | Second-quarter high yield index performance was positive but lackluster as mildly wider credit spreads and higher Treasury yields offset coupon income to produce returns inline with cash.
02 | Inflation data was encouraging: Various measures of inflation resumed their slow declines after surprising to the upside during the first quarter.
03 | Global economic indicators were mixed: The US continued to expand, yet not without indications that growth may soon fade. Europe was mixed, with the periphery benefiting from strong tourism, while the manufacturing-oriented core struggled to gain momentum.
Unless otherwise stated, all information contained in this document is from Amundi Asset Management as of June 30, 2024. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the [author] and not necessarily Amundi Asset Management and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product or service. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not indicative of future results. Amundi US is the US business of Amundi Asset Management.
