Global Scale. Time-Tested Strategy.

Recent Thought Leadership

Globalization 2.0—A New Synthesis

Nathan Sheets, PhD, Chief Economist, Head of Global Macroeconomic Research

The prospects for globalization have shifted appreciably. The shrinking of “effective distances” has slowed and, in some dimensions, even reversed. Globalization is now criticized in many quarters as having failed to deliver on its promises—in terms of both the pace of growth and the distribution of gains across society. The economic expansion in the aftermath of the global financial crisis, although distinguished by its longevity, brought growth rates that were more muted than those following other downturns.

Current EU Crisis to Boost Solidarity, Not Fragmentation

Mehill Marku, Senior Investment Strategist

Given the formidable list of crises faced by the EU, it is understandable why the fragmentation narrative still holds sway among some market participants. However, EU governments and institutions have acted determinedly to stave off the negative consequences of each crisis. In the process, they have ultimately restored market confidence in Europe’s ability to repeatedly rally around a common goal of strengthening the Union’s institutions and their ability to respond to future crises. 

Mounting U.S. Public Debt: How Worried Should We Be?

Nathan Sheets, PhD, Chief Economist, Head of Global Macroeconomic Research, and George Jiranek, Associate, Global Macroeconomic Research

As U.S. fiscal spending ramps up to counter the coronavirus shock, we believe that higher U.S. debt levels can be safely absorbed. The demand for Treasuries is substantial. But the capacity to issue Treasuries cannot be unlimited, and it’s not prudent to find out where the limits might be.  While the use of fiscal tools in the current situation is altogether appropriate, in the aftermath of the crisis, policymakers should focus on putting U.S. fiscal performance on firmer footing.

Market Updates

White Paper The Fed Quickly Surpasses Its Financial Crisis Efforts

Nathan Sheets, PhD, Chief Economist, Head of Global Macroeconomic Research

Over the past week, the Federal Reserve has rolled out an extraordinary phalanx of measures, which already exceed the force and scope of the interventions put in place during the global financial crisis. The Fed is signaling that it will do whatever it takes to restore liquidity and smooth functioning to financial markets, and we expect that the markets should feel the broad effects of the Fed’s measures over the next 10 days, and we expect that these actions will help soothe the extraordinary volatility that has erupted. A question that arises, however, is why the Fed’s actions have not calmed the markets more rapidly? And why have interventions at such massive scale proved necessary?

Market Outlook Second Quarter Market Outlook

In the span of less than three months, the novel coronavirus has shuttered much of the global economy, bringing an 11-year economic expansion to an abrupt end.

The crisis may become a seminal point for global interest rates and credit spreads. After falling for years, U.S. rates have entered the low realm of their developed market counterparts and may be poised to drift only slightly higher going forward. However, credit spreads across securitized credit, investment grade, high yield, and emerging markets offer historically compelling value, and active management will be more critical than ever in both generating alpha and avoiding losses

White Paper The Fed’s Further Action to Combat the Virus Fallout

Nathan Sheets, PhD, Chief Economist, Head of Global Macroeconomic Research

The Fed continues to follow its playbook from the global financial crisis—announcing on Sunday a broad-based package of monetary-easing measures. By any historical standard, the scale and scope of these actions was extraordinary. Even so, markets were expecting extraordinary action and have fallen since the Fed’s announcement. Notwithstanding today’s drop in asset prices, we believe the Fed’s moves are significant and will, over time, provide important support to the economy and markets.

Webinar Webinar: From the Good, Straight to the Ugly

21 Apr 2020

In this webinar, Greg Peters, Head of Multi-Sector and Strategy at PGIM Fixed Income, provides an overview of global economic and market themes before delving into the current opportunity sets he sees across a number of different fixed income sectors. Learn why he believes we are entering a 'golden age of credit' in this webinar, which can be viewed now!

Webinar Market Update: Oil Market

21 Apr 2020

With supply/demand imbalances reaching severe levels, the oil market is 'passing a kidney stone,' according to Dave Winans, Principal and U.S. Investment Grade Credit Analyst at PGIM Fixed Income. Mr. Winans explains what he means by this and shares which sectors of the oil market we favor given the current market environment.

Webinar Market Update: Opportunities in Emerging Markets Debt

17 Apr 2020

After providing a brief backdrop of the current market environment, Cathy Hepworth, CFA, Head of Emerging Markets Debt, outlines where her team is finding the most compelling opportunities across the EM sectors and the rationale behind their current convictions. The webinar was recorded on April 17, 2020.

Webinar Market Update: Considerations for LDI Plan Sponsors

14 Apr 2020

In this webinar Tom McCartan, Principal of Liability-Driven Strategies, outlines how LDI investors can work to take advantage of attractive credit spreads and what plan sponsors can do now given the ongoing economic volatility stemming from COVID-19. The webinar was recorded on April 14, 2020.

PGIM Fixed Income's Podcast Series: All The Credit

Episode 3 Available Now!

In Episode 3 of All The Credit, host and Senior Portfolio Manager Mike Collins welcomes Nathan Sheets, PGIM Fixed Income's Chief Economist and Head of Global Macroeconomic Research, for a discussion about the current market crisis. Nathan draws on his prior experience at the Federal Reserve to compare the fiscal and monetary policy response to the recent economic volatility with that of the recession of 2008 while providing potential scenarios on what a recovery and return to normal could look like. The two also discuss the potential path forward for global interest rates, where risks and opportunities for active investors are emerging, and more. This episode was recorded on April 9, 2020. 

Subscribe and listen now on the platforms below by clicking on the icons, or search for "PGIM Fixed Income All the Credit" wherever you listen to podcasts.

                                  

Footnotes

For Professional Investors only. All investments involve risk, including possible loss of capital.

1 Any discussion of risk management is intended to describe PGIM Fixed Income's efforts to monitor and manage risk but does not imply low risk. All investing involves risk, including the risk of loss.

It is for informational and educational purposes only and should not be construed as investment advice or an offer or solicitation in respect of any products or services to any persons who are prohibited from receiving such information under the laws applicable to their place of citizenship, domicile or residence. The views and opinions expressed herein are those of PGIM Fixed Income and are subject to change without notice. PGIM, Inc. is the principal asset management business of Prudential Financial, Inc. (PFI) and is a registered investment adviser with the United States Securities and Exchange Commission.  PGIM is a trading name of PGIM, Inc. and its global subsidiaries. In the United Kingdom, and in various European Economic Area (EEA) jurisdictions, information is issued by PGIM Limited, an indirect subsidiary of PGIM, Inc.   PGIM Limited registered office: Grand Buildings, 1-3 Strand, Trafalgar Square, London, WC2N 5HR is authorised and regulated by the Financial Conduct Authority of the United Kingdom (registration number 193418) and duly passported in various jurisdictions in the EEA.  These materials are issued to persons who are professional clients or eligible counterparties for the purposes of the Financial Conduct Authority’s Conduct of Business Sourcebook. In Japan, investment management services are made available by PGIM Japan Co., Ltd. (PGIM Japan), a registered Financial Instruments Business Operator with the Financial Services Agency of Japan.  In Hong Kong, information is presented by representatives of PGIM (Hong Kong) Limited, a regulated entity with the Securities and Futures Commission in Hong Kong to professional investors as defined in Part 1 of Schedule 1 of the Securities and Futures Ordinance.  In Singapore, information is issued by PGIM (Singapore) Pte. Ltd. (PGIM Singapore), a Singapore investment manager that is licensed as a capital markets service license holder by the Monetary Authority of Singapore and an exempt financial adviser. These materials are issued by PGIM Singapore for the general information of “institutional investors” pursuant to Section 304 of the Securities and Futures Act, Chapter 289 of Singapore (the SFA) and “accredited investors” and other relevant persons in accordance with the conditions specified in Sections 305 of the SFA.  In South Korea, information is issued by PGIM, Inc., which is licensed to provide discretionary investment management services directly to South Korean qualified institutional investors.

The information on this website is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. In making the information available on this website, PGIM, Inc. and its affiliates are not acting as your fiduciary under ERISA, any Department of Labor regulations or any other statutes or regulations.

Any discussion of risk management is intended to describe PGIM Fixed Income’s efforts to monitor and manage risk but does not imply low risk.  All investing involves risk, including the risk of loss.  Fixed Income securities are subject to certain risks, including credit, interest rate, issuer, market and inflation risk.  Foreign and emerging market securities are subject to currency, political, economic and market risks, which may be enhanced in emerging market countries.  High Yield securities are lower rated securities that may have a higher degree of credit and liquidity risk.  Mortgage and asset-backed securities are sensitive to early prepayment risk, a higher risk of default and may be hard to value and difficult to sell.  U.S. government securities may not be backed by the full faith and credit of the U.S.; thus, these issuers may not be able to meet their future payment obligations.  With sovereign debt securities, the issuer or governmental authority that controls the repayment of the debt may not be willing or able to repay the principal and/or pay the interest when it becomes due, in accordance with the terms of such obligations.  Collateralized mortgage obligations may have unpredictable cash flows that can increase the risk of loss.  Public bank loans are subject to liquidity risks of lower rated securities.  The use of derivative instruments may disproportionately increase losses and have a significant impact on performance. They also may be subject to counterparty, liquidity, valuation, correlation and market risks.

There is no guarantee that any investment strategy will achieve its objective under all market conditions or be suitable for all investors.  Each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market.  

The views and opinions expressed herein are those of PGIM Fixed Income and are subject to change without notice.

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