Is the Cycle Over? What You Should Know
Matt Eagan, Co-Head and Portfolio Manager, Multisector Full Discretion: So, I think what investors really want to know is, are we at the end of this cycle.
Brian Kennedy, Portfolio Manager, Multisector Full Discretion: Are we going into a recession in 2019.
Elaine Stokes, Co-Head and Portfolio Manager, Multisector Full Discretion: The US is really in a soft patch.
Kennedy: We’re emphatically saying no, that’s not the case.
Eagan: I think the US economy is quite healthy, with a solid job situation, unemployment is low, wages are rising. So we don’t have a lot of concerns about the US economy by itself.
Stokes: You have a bigger hiccup in China than we had thought was happening last year.
Kennedy: But we are seeing the Chinese government stimulate the economy on a number of different fronts, and we think that that’s a positive sign.
Eagan: So this year is going to be interesting.
Kennedy: I think the Fed is likely on hold during first half of this year.
Eagan: They might not have the confidence that that data is solid enough until maybe the second half of 2019.
Stokes: There’s a lot of debt that needs to come to this market, so we really need to watch the rate picture pretty closely.
Kennedy: The markets are very much looking at the political landscape right now, and that’s really dominating I think, in a lot of cases.
Eagan: They’re worried about geopolitical events, like the US/China tariff spat.
Stokes: We still have a level of unpredictability in the US government, beyond anything I’ve seen in my lifetime.
Stokes: I don’t think we can underestimate the move towards nationalism, populism, protectionism.
Kennedy: I do believe that people are concerned about the paths that the politicians are taking and how it affects not only their jobs, but also their investments.
Stokes: I live in this economy too – and I feel it, and I talk to people who are concerned.
Eagan: For fixed income investors I think the good news is that it gets a bit easier from here.
Stokes: So what we’re going to do, is just with each bout of volatility, we’re going to add those long-term positions that we have conviction in, so that we are positioned for what we think is a late cycle environment, but one that’s going to last a little bit longer.
More to explore:
This video is provided for informational purposes only and should not be construed as investment advice. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the speakers only and do not necessarily reflect the views of Loomis, Sayles & Company, L.P. Investment recommendations may be inconsistent with these opinions. There can be no assurance that developments will transpire as forecasted and actual results will be different. Data and analysis does not represent the actual or expected future performance of any investment product. We believe the information, including that obtained from outside sources, to be correct, but we cannot guarantee its accuracy. The information is subject to change at any time without notice.
Investing involves risk including possible loss of principal.
Past market experience is no guarantee of future results.
Natixis Distribution, L.P. (fund distributor, member FINRA|SIPC) and Loomis, Sayles & Company, L.P. are affiliated.
Natixis Distribution, L.P. is a limited purpose broker-dealer and the distributor of various registered investment companies for which advisory services are provided by affiliates of Natixis Investment Managers.