Tim Price, Partner and Director of PFP Wealth Management, joined Nick Batsford on the Tip TV Finance Show to discuss the tough times ahead for the bond market, the tipping point in the credit market and the impact oil is having at low price levels.
Tough times ahead for 60/40
Price outlined that the future returns for the 60/40 balance are likely to be stretched. He continued that bond market valuations have never been higher, with some at negative yields, and so investors in some cases are actually paying money to lend to solvent governments. Price highlighted the GMO which recently provided a 7-yr asset class forecast, with this leading him to the conclusion that there are disastrous times ahead for bond market investors.
The impacts of lower oil
Price commented that the lower the oil price goes, the more US high yield spread – Energy Sector is under pressure, and therefore he believed there is worse to come within energy and high yield areas. He continued onto Anglo American, which he noted as a possible turning point for the oil sector, with 85000 job losses, 2/3rds of mines being sold off and oil not being bid for at the moment. Price expressed that Russia, stock markets in the Middle East, MSCI Energy Indices and high yield indices are all feeling the effects of lower oil prices. However, the MSCI world is the outlier, and be believed this will be the next shoe to drop and has only survived on its weight on the US economy which has shown some resistance.
For further analysis on the bond and credit markets, as well as the US economy – Watch the video below.
We are not authorised by the Financial Conduct Authority of England and Wales. The information and/or data on this website is provided by us and any data providers which may be used by us for your general information and use only and is not intended for trading purposes or to address your particular financial or other requirements. In particular, the information and/or data on the website:
(1) does not constitute any form of advice (financial, investment, tax, medical, legal, spread -betting or otherwise); and (2) does not constitute any inducement, invitation or recommendation relating to any of the products listed or referred to; and (3) is not intended to be relied upon by you in making (or refraining to make) any specific investment, placing any bet or making any other decision; and (4) has not been issued or approved by Tip TV for the purposes of section 21 of the Financial Services and Markets Act 2000 (as amended from time to time).
Opinions expressed by speakers in the videos, writers of the blogs are only opinions and not expert advice. These opinions do not necessarily agree with those held by Tip TV, its directors, agents or employees who disclaim any intent to make betting, securities or securities markets recommendations. The value of investments and the income derived from them may fall as well as rise. APPROPRIATE EXPERT INDEPENDENT ADVICE SHOULD BE OBTAINED BEFORE MAKING ANY INVESTMENT, PLACING ANY BET OR MAKING ANY OTHER DECISIONS.
Recommended Content
Editors’ Picks
EUR/USD stays weak near 1.0650 ahead of Eurozone PMI data
EUR/USD remains on the back foot near 1.0650 in European trading on Tuesday. Resurgent US Dollar demand amid a cautious risk tone weighs on the pair. Investors stay wary ahead of the preliminary Eurozone and US business PMI data.
GBP/USD eases below 1.2350, UK PMIs eyed
GBP/USD is dropping below 1.2350 in the European session, as the US Dollar sees fresh buying interest on tepid risk sentiment. The further downside in the pair could remain capped, as traders await the UK PMI reports for fresh trading impetus.
Gold could see a rebound before resuming the correction
Gold price sees a fresh leg down in Asia on Tuesday even as risk flows dissipate. Receding fears over Middle East escalation offset subdued US Dollar and Treasury bond yields. Gold remains heavily oversold on the 4H chart, rebound appears in the offing.
PENDLE price soars 10% after Arthur Hayes’ optimism on Pendle derivative exchange
Pendle is among the top performers in the cryptocurrency market today, posting double-digit gains. Its peers in the altcoin space are not as forthcoming even as the market enjoys bullish sentiment inspired by Bitcoin price.
Focus on April PMIs today
In the euro area, focus today will be on the euro area PMIs for April. The previous months' PMIs have shown a return of the two-speed economy with the service sector in expansionary territory and manufacturing sector stuck in contraction.