INSIGHTS

INSIGHTS

Current macroeconomic data and market trends in fixed income, equity, and real assets, to help inform your investment decisions.

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Economic & Market Outlooks

Each quarter our asset managers provide outlooks covering the bond, equity and real estate markets along with views on asset allocation. Read their perspectives on the latest economic and market trends.

Whitepapers & Commentary

Explore recent whitepapers and commentary authored by thought leaders across PGIM.

Featured Content

Value vs. Growth: The New Bubble

Cheap stocks have been underperforming for the last 18 months, while expensive stocks are overperforming. In fact, current value performance parallels the Tech Bubble and Global Financial Crisis (GFC). This comes as a surprise to many. QMA’s latest research sheds light on this extraordinary environment.

After the Storm: Next Steps for the Repo Market

One of the striking features of the recent stress in the U.S. repurchase (repo) market is the culmination of factors—including developments in monetary policy, banking regulations, Treasury issuance, and corporate tax payments—that contributed to the pressure. PGIM Fixed Income explains that while these factors may result in some continued bifurcation in short-term money market rates over the medium term, the mechanics of monetary policy will likely address and mitigate the recently emerged pressure in the near term.

Where Are the Best Growth Opportunities Today?

With slowing global economic growth, it’s becoming more difficult to find high-growth companies. Additionally, there are lower market return expectations at this point in the economic cycle. The combination makes it more challenging for investors to find attractive growth opportunities to meet long-term investment goals. Mark Baribeau, CFA, Head of Global Equity at Jennison Associates, explains why regardless of a more uncertain macro backdrop, growth equities still make sense and where he’s finding the most compelling prospects.

U.S. Rates: Low for Long and Likely Positive

The burgeoning stock of negative-yielding debt across the international markets has investors wondering: will it happen in the U.S. too? Given PGIM Fixed Income's long-standing “low for long” thesis for the global bond markets, they expect U.S. rates to fluctuate around current levels and ultimately remain positive given some key distinctions between the U.S. and the growing list of negative-yielding countries.

More Thought Leadership

The Fed Serves Up Another Incremental Cut Amid “Disparate Perspectives”

In a sign of just how divided the Fed is over the appropriate policy stance, however, three FOMC members dissented from the decision. The U.S. and global backdrops create an environment of “difficult judgments, disparate perspectives,” as Chairman Powell noted. If PGIM Fixed Income’s outlook for U.S. economic growth and inflation pans out, resistance by some Fed officials to further rate cuts going forward may increase. PGIM Fixed Income thinks the risks are heavily skewed towards an additional rate cut later this year or early next year.

Capturing the Opportunity of Constraints

Fixed income markets contain a high proportion of investors whose goal of identifying the most attractive relative value is subverted by jurisdictional or self-imposed rules, regulations, and constraints, or is superseded by other non-economic objectives, such as accounting conventions. This, in turn, creates opportunities for total return, multi-sector fixed income investors willing to consider broad investment guidelines and greater degrees of portfolio management freedom. PGIM Fixed Income explains the fixed income market segmentation they observe and the resultant high dispersion in risk-adjusted reward; principles for identifying relative value and pitfalls to avoid; and an outline of their portfolio construction approach for building multi-sector portfolios.

Challenges and Solutions to the Cost of Investing in Emerging Markets Local Debt

In an environment of expanding negative rate securities across developed markets, emerging markets local bonds (EMLBs) continue to present attractive investment opportunities. Yet, unless active measures are taken, investing in EMLBs can incur extra transaction costs that reduce alpha generation. PGIM Fixed Income explains the transaction costs associated with EMLBs and discusses possible solutions to help mitigate and, in some cases, eliminate these costs in order to maximize client portfolio returns.

Investing Against the Possibility of Regime Change

QMA CEO Andrew Dyson introduces readers to “regime change”—a secular shift in the investment or economic environment that prevents investors from extrapolating from the past as they attempt to forecast the outcomes of their investment strategies.

Growth Investing and Disruptive Innovation

In today’s markets, disruption is a key theme as technology applications and business models are transforming at an accelerating pace. Jennison provides insights into how disruption occurs quickly, and companies that have created structural shifts in their industries have historically been rewarded with strong growth for many years.

Wealth Inequality - A Tale of the Diverging Tails

PGIM Fixed Income examines the underlying drivers of the widening wealth distribution and its potential economic effects. The policy prescriptions to narrow wealth inequality include further steps to encourage home ownership across economic cohorts and additional efforts to expand middle-class participation in pension vehicles.

India - Ready to Step into China's Shoes?

The confluence of the resounding victory of Prime Minister Modi and his pro-business vision for India, with the once-again escalating trade tensions between the U.S. and China, have rekindled interest in India assuming the export-powerhouse baton from China and shifting up a gear in its long-term growth potential. This paper outlines why that task may not be as daunting as it seems at first glance, especially when it is kept in mind that India’s relative underperformance compared to China is a rather recent phenomenon. It is only the strong reforms in China just three decades ago that set the stage for its subsequent surge.

The Potential Implications of Investing in Coal Heavy Utilities

Several factors—including evolving regulations, shifting dynamics across commodity markets, declining costs of renewable electrical generation, and mounting environmental concerns—continue to affect the economics of coal-fueled electrical generation. With these factors in mind, PGIM Fixed Income addresses a primary investment-related question: Do (or will) utility bonds issued by more coal-heavy or carbon-intensive utilities trade at a discount? Or stated differently, what are the implications from the relationship between bonds issued by coal-heavy utilities and those issued by utilities with less reliance on coal?

Turkey - A Short-Term Reprieve Admist Persistent Uncertainties

Turkey’s economic crisis erupted one year ago, and PGIM Fixed Income recently returned to the country to gauge the outlook going forward. While Turkey’s large external financing requirements remain its key vulnerability, funding flows should continue normalizing. In this context, it is noteworthy that political uncertainty appears to have “troughed.” Growth apparently remains the overarching priority of economic policy, and any policy missteps risk draining the rather limited (unencumbered) official FX reserves. However, in such a scenario, the authorities could turn to the IMF as a last resort. On balance, PGIM Fixed Income remains cautiously constructive on Turkey’s outlook.