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VIEWS FROM Loomis, Sayles & Company

Credit Compass

Mapping the Markets as Conditions Evolve

The disinflation trend has continued, and a shift to easier monetary policy appears to be underway. Geopolitical risks and other variables loom ahead. Where will the economy and markets go from here?

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LOOMIS SAYLES INVESTORS
Surprises from the First Half of 2024 


Several of our fixed income portfolio managers share unexpected developments that have shaped their view of the credit markets.

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The Macroeconomic Backdrop

By the LOOMIS SAYLES macro strategies group
What is the Credit Cycle Telling Us?  


At Loomis Sayles, our views are informed by the credit cycle, a framework that links the macroeconomic landscape and investor behavior. Our analysis suggests the mid-expansion could continue through the second half of 2024.

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WE ASKED OUR EXPERTS

Are you convinced that the US disinflation trend will remain intact? 

We believe inflation will be one of the most critical financial market drivers through 2024 and into 2025. Our investors weighed in on the forward path for price levels.

Data sourced from a survey of 12 Loomis Sayles investors and traders, as of 15 July 2024.

Charts are shown for illustrative purposes only. Some or all of the information on these charts may be dated, and, therefore, should not be the basis to purchase or sell any securities. Information obtained from outside sources is believed to be correct, but Loomis Sayles cannot guarantee its accuracy.

Any opinions or forecasts contained herein reflect the current subjective judgments and assumptions of the 12 investors surveyed, and do not necessarily reflect the views of Loomis, Sayles & Company, L.P. This information is subject to change at any time without notice.

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Taking Stock of the Credit Markets

Our investors examine the market dynamics that could influence risk assets over the next few months.

 

The Budget, Balance Sheets & Treasury Market Volatility

Senior Fixed Income Trader Patrick Savery, CFA, explains what he think is the US’s financing needs and market functioning could mean for the Treasury market.

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Anticipating Volatility & Potential Opportunity in the IG Market

Senior Fixed Income Trader Karin Loring shares the themes and risks that she thinks could shape the investment grade credit market in the second half of 2024.

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Will High Yield Remain on Firm Footing?

High yield has held steady so far in 2024, but Senior Fixed Income Trader Jack Celata is watching to see if geopolitics create risks or opportunities in the second half of the year.

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Is the European Credit Market Headed Toward Record Inflows?

Director of European Credit Trading Valerie Miles, CFA, thinks recent developments in Europe could support strong inflows into European credit in 2024.

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WE ASKED OUR EXPERTS

What is your view of risk assets in 2H24 compared to 1H24?

Expectations for Fed rate cuts have changed significantly since January, but our investors’ view of risk assets has generally held up.

 

Data sourced from a survey of 12 Loomis Sayles investors and traders, as of 15 July 2024.

Charts are shown for illustrative purposes only. Some or all of the information on these charts may be dated, and, therefore, should not be the basis to purchase or sell any securities. Information obtained from outside sources is believed to be correct, but Loomis Sayles cannot guarantee its accuracy.

Any opinions or forecasts contained herein reflect the current subjective judgments and assumptions of the 12 investors surveyed, and do not necessarily reflect the views of Loomis, Sayles & Company, L.P. This information is subject to change at any time without notice.

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 Loomis sayles investors

What is the Market Mispricing?

Markets sometimes move away from fundamentals. Our investors key in on areas that may be overemphasized or underappreciated.

 

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Investing with Eyes Wide Open

A sanguine outlook does not mean our experts are complacent. Our investors share the indicators and risks they’re watching.

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 LOOMIS SAYLES INVESTORS

Four Signals on our Radar 

Our investors are watching how monetary policy, consumer health, earnings and profits will come together to drive the cycle and asset markets.

 

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WE ASKED OUR EXPERTS

What’s your favorite economic indicator to monitor?

Market participants have to sift through mountains of data for clues about the economy. But not all data is equally useful. Inflation and labor market data ranked highest among our investors, but the preferred metric varied within each category.

Data sourced from a survey of 12 Loomis Sayles investors and traders, as of 15 July 2024.

Charts are shown for illustrative purposes only. Some or all of the information on these charts may be dated, and, therefore, should not be the basis to purchase or sell any securities. Information obtained from outside sources is believed to be correct, but Loomis Sayles cannot guarantee its accuracy.

Any opinions or forecasts contained herein reflect the current subjective judgments and assumptions of the 12 investors surveyed, and do not necessarily reflect the views of Loomis, Sayles & Company, L.P. This information is subject to change at any time without notice.

WE ASKED OUR EXPERTS

What do you think will be the biggest risk to markets in the second half of 2024?

Not surprisingly, the majority of investors surveyed think elections are the biggest risk to markets in the months ahead. How would your answer stack up?

Data sourced from a survey of 12 Loomis Sayles investors and traders, as of 15 July 2024.

Charts are shown for illustrative purposes only. Some or all of the information on these charts may be dated, and, therefore, should not be the basis to purchase or sell any securities. Information obtained from outside sources is believed to be correct, but Loomis Sayles cannot guarantee its accuracy.

Any opinions or forecasts contained herein reflect the current subjective judgments and assumptions of the 12 investors surveyed, and do not necessarily reflect the views of Loomis, Sayles & Company, L.P. This information is subject to change at any time without notice.

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The Tools Driving Our Insights

Get a glimpse into the proprietary tools that inform our views on credit.

A Big-Picture Understanding of Corporate Health 

The Loomis Sayles Corporate Health Index (CHIN) provides a view of credit markets, integrating the fundamental with the macro to help identify factors that others might be missing or ignoring. 

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Enabling Early Detection in the Credit Markets 

The Loomis Sayles Credit Analyst Diffusion Indices, or CANDIs, open up channels of communication to help us detect outliers and trends in the credit markets just as they emerge.


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Disclosure

Andrea DiCenso, Jennifer Thomas, Scott Service, Christopher Romanelli, Elisabeth Colleran, Devon McKenna, Karin Loring, Patrick Savery and Jack Celata filmed their comments on 26 June 2024. Luuk Cummins filmed on 1 July 2024. Valerie Miles filmed on 2 July 2024.

All survey results are as of 15 July 2024 and are subject to change at any time without notice. Other industry analysts and investment personnel may have different views and opinions.

This marketing communication is provided for informational purposes only and should not be construed as investment advice. Any opinions or forecasts contained herein, reflect the subjective judgments and assumptions of the authors only, and do not necessarily reflect the views of Loomis, Sayles & Company, L.P. Investment recommendations may be inconsistent with these opinions.

There is no assurance that developments will transpire as forecasted and actual results will be different. Data and analysis does not represent the actual, or expected future performance of any investment product. Information, including that obtained from outside sources, is believed to be correct, but we cannot guarantee its accuracy. This information is subject to change at any time without notice.

Commodity, interest and derivative trading involves substantial risk of loss. This is not an offer of, or a solicitation of an offer for, any investment strategy or product.

Any investment that has the possibility for profits also has the possibility of losses, including the loss of principal.

Markets are extremely fluid and change frequently.

Past market experience is no guarantee of future results.

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