Norway: The Fed is gradually approaching rate cuts, bullish on securitized assets and preferred securities
The Federal Reserve is gradually approaching rate cuts, with Norwe Chief Investment Officer bullish on securitized assets and preferred securities. The cooling of US economic data and easing inflation pressures reflect that the Federal Reserve is gradually approaching a rate cut phase. The market expects the possibility of a rate cut to reach 100% after the September meeting. Investors may consider transferring some assets out of short-term bonds and cash, using diversified bonds as a supplement. Securitized assets and preferred securities are investment opportunities worth paying attention to. Preferred loans and high-yield corporate bonds continue to perform well. Investors should consider extending the investment duration and seek value in specific fixed income markets
According to the Zhitong Finance and Economics APP, Saira Malik, Chief Investment Officer of Nuveen, pointed out that the cooling of US economic data and easing inflation pressures reflect that the Federal Reserve is gradually approaching a rate cut phase. The firm is optimistic about securitized assets, preferred securities, senior loans, and high-yield markets.
Nuveen stated that with the Fed's rhetoric becoming more dovish and data trending moderate, the market currently expects a 100% chance of a rate cut after the September meeting. With the increasing market prediction of the Fed's imminent rate cut cycle, it may be a good time to consider extending the duration of investment portfolios. Investors can shift some assets out of short-term bonds and cash, supplementing with diversified bonds. Among various investment opportunities, securitized assets and preferred securities are the most noteworthy.
Nuveen mentioned that senior loans and high-yield corporate bonds continue to perform well. Senior loans remain one of the highest-yielding asset classes in the global fixed income market. Strong financing activities, coupled with issuers continuously extending debt maturities, indicate that the credit market fundamentals remain robust.
The firm pointed out that with the actual yield of cash close to zero, investors should consider extending the duration of their investments and seek value in specific fixed income markets. They are optimistic about non-cyclical industries and high-quality issuers with stable financial conditions. However, they also found that even in heavily adjusted industries, there are excellent companies that can provide highly attractive total investment returns