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

Capturing Value in Lower Rated U.S. High Yield

When evaluating allocations in the current late-cycle environment, the U.S. high yield market remains vastly bifurcated with overvalued BB-rated issues and some deeply discounted weaker B and CCC-rated names. Granted, there are risks to overweighting the lower-quality portion of the market, but given PGIM Fixed Income's base case for a prolonged credit cycle, the larger risk to performance could be maintaining overweights to the BB-rated segment of the market, particularly as lower-quality credit spreads imply a far higher default rate than we expect in 2020.

With Brexit All-But Done, Now Comes the Hard Part

The Conservative party’s sweeping victory in the December 13th general election was a landmark event on several fronts. Now, barring the unforeseen, the UK will leave the European Union on January 31, 2020 based on the deal that Prime Minister Johnson previously reached with the EU. PGIM Fixed Income shares their latest outlook following the UK General Election.

Q&A with QMA: Is an X-Factor Driving Stock Returns?

Stock prices have continued to pull further and further away from fundamentals. Speculative growth firms, in particular, are priced at extreme levels, as investors have become overly optimistic about their future growth potential. In this Q&A, QMA tests for the presence of an x-factor and determines whether or not the current pricing for growth stocks is supportable. QMA's analysis shows that the median “expensive” stocks would need to grow their earnings at 25% for a full decade in order to justify their current valuations. This dislocation between prices and fundamentals increases the return potential for value investors.

Prospects for Global Potential Growth: The Next Decade

The slowing in global growth during the past two years frames a key question for investors: How is global potential growth likely to perform in the years ahead, say for example, over the next decade? In this paper, PGIM Fixed Income focuses their analysis on two clear—and they believe predictable—trends that will shape global economic performance going forward.

More Thought Leadership

High Yield Investing Throughout the Credit Cycle

With the current credit cycle now entering its 10th year, some market commentators are beginning to prognosticate the end of the cycle. Robert Cignarella, CFA, Head of PGIM Fixed Income’s U.S. High Yield Team, provides an outlook for the high yield market and why he believes the high yield market still has room to run.

Q&A with QMA: Rethinking ESG

Gavin Smith, PhD, Managing Director and Portfolio Manager on QMA’s Quantitative Equity team, discusses the difficulties with current ESG offerings, as well as the likely evolution of a viable framework for ESG investors.

When Social Contracts Fail: The Economic and Investment Implications of Social Protests

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.

Greece—Near-Term Tailwinds, Medium-Term Headwinds

With a tumultuous decade behind it, Greece’s outlook presents two distinct sides. In the near term, there are numerous developments that support a positive outlook for the Greek economy as well as for holders of Greek government bonds. The economy is finally growing at a moderate pace, and the expansion will likely accelerate somewhat in 2020 on improved investment expenditures and household consumption. PGIM Fixed Income shares their latest outlook for Greece.

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.

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.

Homebuilders as a Case Study in Late-Cycle High Yield

For some high-yield investors, the U.S. homebuilding sector may represent a crossroads for the higher-rated portions of the market. Yet, as concerns about an economic slowdown mount, investors may be facing a highly-cyclical sector that generally appears fully valued and possibly on the precipice of weakening economic conditions. In this paper, PGIM Fixed Income examines some key developments with homebuilders that have supported an overweight allocation to the sector and how this allocation has adjusted to the maturing cycle.

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.

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PGIM Fixed Income: Rates to be “low for long

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Disclaimer

Consider a fund's investment objectives, risks, charges and expenses carefully before investing. The prospectus and the summary prospectus contain this and other information about the fund. Contact your financial professional for a prospectus and the summary prospectus. Read them carefully before investing.

An investment in our money market funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the funds seek to preserve the value of your clients investment at $1.00 per share, it is possible to lose money by investing in the funds.

Mutual fund investing involves risk. Some mutual funds have more risk than others. The investment return and principal value will fluctuate and investor's shares when sold may be worth more or less than the original cost. Fixed income investments are subject to interest rate risk, and their value will decline as interest rates rise. Asset allocation and diversification do not assure a profit or protect against loss in declining markets. There is no guarantee a Fund's objectives will be achieved. The risks associated with each fund are explained more fully in each fund's respective prospectus. Consult with your attorney, accountant, and/or tax professional for advice concerning your particular situation.

This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. Clients seeking information regarding their particular investment needs should contact a financial professional.

Investment products are distributed by Prudential Investment Management Services LLC, a Prudential Financial company, member SIPC. Separately Managed Accounts are offered through our affiliates. Jennison Associates and PGIM, Inc. (PGIM) are registered investment advisors and Prudential Financial companies. QMA is the primary business name of QMA LLC, a wholly owned subsidiary of PGIM. PGIM Fixed Income and PGIM Real Estate are units of PGIM. © 2020 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM Real Estate, PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

Prudential Financial, Inc. of the United States is not affiliated with Prudential plc. which is headquartered in the United Kingdom.

Investment Products: Are not insured by the FDIC or any other federal government agency, may lose value, and are not a deposit of or guaranteed by any bank or any bank affiliate.

 

1013460-00001-00 Ed. 12/2018