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

The Next Chapter in the U.S.-China Trade War

With President Trump and President Xi agreeing to restart trade negotiations, PGIM Fixed Income explains why their baseline remains that they both face compelling incentives to resolve the conflict. Trump needs a strong economy and a rising stock market leading up to the presidential election in November 2020. Xi has the dual of objectives of hitting his 6.0-6.5% growth target and avoiding further accumulation of debt and leverage in the economy. An escalation of the trade war, or even a continuation through early next year, would be inconsistent with these objectives.

Uncovering Alpha Opportunities in Emerging Market Corporates

In a late-cycle environment where investors’ ongoing search for yield has compressed credit spreads across a range of sectors, the nuances in emerging market corporate bonds have continued to present compelling opportunities. Yet, the characteristics of many EM companies often make the fundamental analysis process different and more challenging than the evaluation of developed market corporates. PGIM Fixed discusses the market opportunity across EM corporates and explains how global investors with in-depth knowledge of local business practices, politics, and corporate culture can take advantage of the idiosyncratic opportunities presented by EM corporate bonds.

Why Now is the Right Environment for Real Estate Securities

After three years of challenging performance, global real estate stocks have begun taking a leadership position as the market environment has become favorable for the sector. PGIM Real Estate explains why the combination of a stable interest rate environment and slow economic growth is a good backdrop for real estate and provides an attractive “Goldilocks 2” environment for REITs.

Why Midstream Infrastructure Deserves a Second Look

The seeds of transformation have been sowed for the midstream asset class as improved corporate structures and better financial foundations have recently translated into better performing stocks after a bumpy few years for investors. Jennison Associates provides insights into what it will take for stocks to continue their upward trajectory. The paper also addresses some common industry misperceptions, along with whether or not the seeds of change can sprout potential distribution/dividend growth opportunities going forward.

More Thought Leadership

The Fed Clears the Way for Cuts as the Market Seeks Even More

With its dovish tilt, the Fed created more optionality for itself, clearing the way for possible rate cuts in the second half of this year if incoming data indicate that economic growth is at risk of downshifting and prospects for a pickup of inflation towards 2% are fading. PGIM Fixed Income's base case now expects two rate cuts in the second half of 2019—more than what the median Fed projection has penciled in, but less than the three cuts the market has been pricing in. PGIM Fixed Income also looks at what may be contributing to market expectations for even deeper cuts going forward and how this could affect bond market conditions going forward.

The Great “Hollowing Out” of the U.S. Job Market

In assessing the strength of the U.S. labor market since the global financial crisis, it is important to consider the quality of the jobs that have been created. PGIM Fixed Income's research finds that the jobs created through the current expansion have a distinct “barbell” feature consisting of a remarkable “hollowing out” of jobs in the middle of the income distribution. These findings highlight some of the deep drivers of rising income inequality in the United States. Given that the forces in play seem likely to be persistent, policymakers, market participants, and individual workers are well-advised to embrace these trends and tailor strategies to harness the opportunities that they will generate.

Credit Research Round Table

PGIM Fixed Income summarizes thier credit research team's views on certain, topical industries, including those with a recent change in credit fundamentals. The credit research team consists of 108 fundamental analysts located in the U.S., Europe, and Asia, covering the universe of industries applicable to the investment grade corporate, high yield corporate, and bank loan sectors.

Securitized Credit: A Closer Look at CLO Tranche Investing

Given recent headlines regarding the weakening quality of leveraged loans, PGIM Fixed Income addresses the potential impact on Collateralized Loan Obligation (CLO) tranche investing and provides insight on these topical investments.

The U.S. Automotive Industry: Downshifting but Still Moving Forward

In addition to the mounting cyclical challenges confronting the U.S. automotive industry after years of strong growth, automakers and suppliers also face an uncertain future made up of rapid technological change and the potential full-scale realignment of the personal ownership business model. PGIM Fixed Income analyzes current auto cycle fundamentals and discusses the risks and opportunities in the nascent era of increasing electrification, autonomy, and shared mobility.

China’s Bond Market Opening – Gentle Giant or Behemoth

The opening of China’s onshore bond market marks a historic juncture. PGIM Fixed Income highlights recent key developments, relevant technical specifics, and the intertwined macroeconomic and regulatory idiosyncrasies that investors need to be cognizant of in order to fully realize the potential of this new investment opportunity.

The Economics of Global Aging

The global economy is in the midst of an accelerating demographic transition, and the implications of this shift for macroeconomic performance and financial markets are sobering. PGIM Fixed Income looks how aging demographics tend to result in softer real GDP growth, higher public debt levels, and lower inflation.

The Long and the Short of It: The Quant Shorting Advantage

Why utilize short selling? This paper examines how short selling can be a powerful tool to broaden the set of alpha opportunities, with some shorting-enabled products even lowering overall portfolio risk and helping preserve capital during market drawdowns.

Fixed Income: The Active Advantage

Despite lower costs, passive investors are giving up opportunity for alpha in exchange for relatively small savings. This paper explores performance and important idiosyncrasies of the fixed income market that investors should consider when choosing between active and passive.

Disruptive Technologies in Biopharmaceuticals and Medical Diagnostics

Jennison Associates explores how advances in scientific knowledge and technology are fueling the unprecedented flow of innovative new biopharmaceuticals and diagnostic tools that address serious unmet medical needs.