Céline Deroux, Fixed Income Strategist, and Nicolas Forest, Global Head of Fixed Income at Candriam, see opportunities in fixed income, especially in the Investment Grade segment, recovering from a bad 2022
After a difficult 2022, the repricing of bonds offers numerous opportunities, and with a yield of 3.75%, credit Investment Grade it looks very interesting. Companies are challenged by rising financing costs, an unfavorable economic environment, and an overheating labor market, not to mention the energy, social, and digitization. Coming off an unprecedented negative performance, Investment Grade credit today offers 3.75%, auspicious for the future, and appears to be priced correctly, especially with the recession seemingly averted and interest rate volatility once again under control.
SLOWDOWN BUT NOT SEVERE RECESSION
They are the indications of a comment on corporate bonds e sustainabilityedited by Celine DerouxFixed Income Strategist e Nicolas ForestGlobal Head of Fixed Income, di Candriam, which foresee a scenario of a slowing economy but without a serious recession. Corporate margins and cash flow generation are expected to decline, but balance sheets are overall healthy, which should help weather the slowdown. The most cyclical and most leveraged companies are expected to be hit the hardest, but the default rate is expected to remain moderate at between 3% and 4% at the end of 2023, compared to 2% at the end of 2022…
** This article was written by FinanciaLounge