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31st March 2019

(Free content) Investors thankful for Q1 riches

MARKET CLOSE:
iTraxx Main

65.1bp, -3.5bp

iTraxx X-Over

268.9bp, -11.7bp

🇩🇪 10 Yr Bund

-0.07%, unchanged

iBoxx Corp IG

B+139.7bp, -1bp

iBoxx Corp HY

B+439.3bp, -5bp

🇺🇸 10 Yr US T-Bond

2.41%, +2bp

🇬🇧 FTSE 100

7094.98, -33.20
🇩🇪 DAX

11611.51, -135.53
🇺🇸 S&P 500

2847.11, ERROR

Not for long though, methinks…

Few would disagree that it has been an excellent quarter for the fixed income markets, and all being told, an excellent one for equity markets, too. The rising risk of recession – in some quarters they’re thinking depression, as the central banks’ arsenal of firepower draws something akin to the proverbial blank when it will be called into action – is going to change the landscape for asset markets later this year. That impotency is going to make the next downturn much worse than the last. Just as well we have bagged some solid performance because some markets will start to give some of that back through the next nine months. The Dax is still up 9%, a Brexit-maligned FTSE up 8.3% and the S&P some 13% (!), while euro-denominated IG credit investors bask on returns exceeding 3% and high yield portfolios are bolstered with 5%+ gains, all for Q1 2019. But something’s not quite right when rate markets return 2.6% (Eurozone) in the same period.

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