Entering February, the fixed income allocation strategy continued to favor risk-on leadership but did rebalance. The model remained overweight Emerging Market bonds, U.S. High Yield, U.S. Investment Grade Corporate, and U.S. Mortgage-Backed Securities. U.S. Long-Term Treasurys improved from underweight to marketweight. The model remained underweight U.S. Floating Rate Notes, U.S. Treasury Inflation-Protected Securities, and International Investment Grade.

Click the link below to read more about the strategy’s positioning.

Full strategy commentary: NDRFIAS202402051

Other posts

Home Depot & Homebuilding Earnings, May Flash PMI Coming Soon

BY TEMATICA
Fed heads are not telling the market what it wants to hear about rate cuts Read more →

NDR Dynamic Allocation Strategy December 2022 Update

BY BRIAN SANBORN
Dynamic Allocation Strategy, indicators, weightings update Read more →

Thoughts From The Divide: The Door is Wide Open

BY JON WEBB
Last week, we flagged Bill Dudley’s abrupt change of mind: he now advocates immediate rate cuts. One might be forgiven for suspecting Bill had spent the week lobbying his old colleagues because the July 31st FOMC statement, and J Powell’s subsequent presser gave rates markets quite the boost. Of course, there were the usual Powell caveats: “If we were to see, for example, inflation moving down quickly - or more or less in line with expectations - growth remains reasonably strong, and the labor market remains consistent with its current condition, then I would think that a rate cut could be on the table at the September meeting”. But judging from SOFR pricing, the market took Powell’s caveats as mere teasing. Powell’s presser comments suggested maybe 50bps of cuts by year-end, but Dec 25 SOFR pricing suggests at least 75bps. Read more →
Back to all posts →