LOS ANGELES, Feb. 22, 2023 - The high yield corporate credit market historically has acted as an early warning signal for recessions. In a guest column for Pensions & Investments, Robert Cohen, Director of the Global Developed Credit team at DoubleLine Capital, explains why high yield spreads remain low to moderate despite warning signals from a raft of leading economic indicators.
"Some might feel tempted to misread the anomalous buoyancy of the below-investment grade securities as an all-clear signal for the economy. It is not," Mr. Cohen writes. "An upgrade in issuer fundamentals and a changing of the guard in the sector's composition, a decade in the making, undergirds this market's resilience in the face of recessionary indicators."
Mr. Cohen goes on to analyze the evolution of the credit quality of high yield corporates as an asset class. Then he shares his outlook for this part of the fixed income universe and its sectors.
To access the article, titled "Reading the macro and credit messages from high-yield corporates," please click on the following link: https://doubleline.com/wp-content/uploads/Reading-Macro-and-Credit-Messages-from-HY-Corps_Cohen_021723.pdf
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SOURCE DoubleLine
