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ECB This article was authored by Salvatore Naro, CEO at Coherence Capital Partners LLC.
Understanding the macro view has rarely been as important as it is today. Several macro and geo-political events await us this spring, with the Fed, the ECB and China all taking turns with meetings and releases along with a key vote in Great Britain around "Brexit".
The Fed left rates unchanged at the March meeting, setting the table for one to two rate hikes in 2016. The ECB has drastically expanded the scope of its bond buying program which contributed to a significant rally in spreads beginning in the second week of February.
Energy prices were a major driver of markets in 2015 and will continue to be in 2016. Over the course of March, oil seems to have found a floor in the 30s which has led to drastically higher bond prices in the energy sector and contributed to positive fund inflows.
After being bearish for the last seven months, we have turned positive on the credit markets. Our favored sectors include autos/auto parts and auto retailers. We like healthcare, home improvement, high yield (HY) media and investment grade (IG) technology.
In addition, we believe that financial AT1s offer significant opportunity for returns based on two factors. First, the ECB has softened its position around dividend suspension, a major change in stance. Second, banks have made significant strides toward improving their balance sheets and reducing their costs in re...................... To view our full article Click here
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