In our view, higher frequency data such as elevated jobless claims and small business employment highlight the risk that the recovery could stall absent additional fiscal stimulus.
In our view, while economic data has been generally improving, higher frequency data such as elevated jobless claims and small business employment highlight the risk that the recovery could stall absent additional fiscal stimulus. Given tensions and political posturing entering the last stages of election season, short-term we believe risk premiums should be higher on the margin until resolution of the election. While the final stage of the election campaign is likely to garner headlines and attention, it is important to keep in mind that the election is only one of the many factors to drive intermediate term results, even if short-term it contributes to volatility. More broadly, uncertainty remains regarding risks of future outbreaks of coronavirus and its potential economic impacts. At the same time, the Fed has stated its intent to continue extraordinarily accommodative monetary policy and demand remains robust, which can be seen in the market readily absorbing record breaking corporate debt issuance. These factors suggest an appetite and support for non-governmental fixed income and the modest spread widening in September has increased the yields and attractiveness of these sectors going into the final quarter of the year.
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This is not intended to serve as a complete analysis of every material fact regarding any company, industry or security. The opinions expressed here reflect our judgment at this date and are subject to change. Information has been obtained from sources we consider to be reliable, but we cannot guarantee the accuracy. This publication is prepared for general information only. This material does not constitute investment advice and is not intended as an endorsement of any specific investment. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investment involves risk. Market conditions and trends will fluctuate. The value of an investment as well as income associated with investments may rise or fall. Accordingly, investors may receive back less than originally invested. Investments cannot be made in an index. Past performance is not necessarily a guide to future performance.