International Financing Review reported a new S&P Global Ratings study has found that the amount of U.S. corporate debt that matures by 2024 now totals $5.2 trillion, though “lower interest rates should make refinancing the debt pile manageable despite an expected slump in economic conditions.”
Voya Investment Management Chief Investment Officer Matt Toms was on CNBC’s Squawk Box discussing recent volatility and where markets are headed. Toms said that Voya believes “U.S. markets are not forecasting a recession. We think that we’re seeing a flight to quality into the dollar and into the U.S. bond market, which still has higher yields than foreign country alternatives.”
CNN Business reports the yield on benchmark 10-year U.S. Treasury bonds fell to 1.75 percent on Monday, the lowest level since October 2016, as investors sought out safe havens. Equity markets were hammered on concerns about the global economy as the U.S./China trade war intensifies and China’s currency fell.
CNBC reports global markets have begun responding to the Federal Reserve’s first interest rate cut since 2008, with U.S. indices down one percent following the news. Voya Investment Management Chief Investment Officer of Fixed Income Matt Toms believes the moves may have been an overreaction, saying, “We would look to the Fed to come out and talk more about the lack of inflation. That should help weaken the dollar, steepen the yield curve.”
Voya Investment Management CEO Christine Hurtsellers was on Bloomberg discussing U.S. equity and bond markets. Hurtsellers notes that clients “have the need to stay invested” but fear that “equities look overvalued, fixed income has BBBs getting downgraded, so we have a very natural pivot asking ‘what do we do?’” Hurtsellers believes equity markets have gotten ahead of fixed income, which helps explain “the dichotomy between what markets are telling us.”
Voya Investment Management Head of Securitized Credit Dave Goodson recently spoke with Pensions & Investments about how securitized credit can help investors enhance their fixed-income portfolio, as “an evolving macro environment coupled with positive market fundamentals make securitized credit investments an attractive option.”
Voya Investment Management Asset Allocation Strategist Timothy Kearney was on CNBC offering insights to June payroll numbers, which could impact the Federal Reserve interest rate decision later this month. Kearney said he was not anticipating a 50 basis point cut, as “the market was well ahead of itself.”
Voya Investment Management Head of Asset Allocation Barbara Reinhard spoke with U.S. News & World Report about retirees increasing the amount of risk in their portfolio, as they seek to “maintain purchasing power for 30-plus years while not taking so much risk” that they leave themselves exposed. According to Reinhard, “The riskiest day in your entire financial life is the day you retire. The day you retire you need to have the single longest longevity on your assets to be able to sustain you.”
CNN reports that investors have begun to look beyond long-term government bonds for yield as speculation grows that the Federal Reserve will reduce interest rates later this month. Voya Financial Chief Investment Officer of Fixed Income Matt Toms believes investors looking for good opportunities should consider some high yield or junk bonds, especially those with B or BB ratings which have outperformed their peers in recent weeks. “These bonds satisfy both a need for yield as well as mitigate any investor apprehension about increasing credit risk,” Toms said.