Fixed income portfolio managers Sri Tella and Catriona Martin are cautiously optimistic about the recent reopening news, and are watching to see whether the consumer bounces back. Moving to a reopening phase is important to continue building confidence, but while indexes have improved significantly, and we are beginning to see people go back to work, we need continued support in moving through the ongoing volatility. Sri and Catriona are looking at unemployment rates, liquidity runway for companies, and high-frequency indicators (e.g., number of people driving). Sri and Catriona note there have been opportunities among both high-quality and high-yield names, and spreads had been the tightest seen during the current business cycle prior to the crisis. Catriona used wider spreads to increase exposure to high yield.
Recorded on June 9, 2020.