Understand emerging markets opportunities and the American Century advantage.
By Rich Taylor & Joyce Huang, CFA - March 2020
As the coronavirus outbreak originating in Wuhan, China, spread across the world, investors responded with a global flight to quality. U.S. Treasury yields fell to new lows in the risk-off climate. These events highlight the importance of professional, active management during periods of heightened volatility.
Economy. U.S. economic data, including figures on wages, personal income, employment and manufacturing, were positive and generally stronger than economic data in other developed markets. Uncertainty surrounding the virus’s impact on global growth likely will lead to a global slowdown in coming months.
Rates. The Fed remained on hold in February, but with the expanding coronavirus outbreak threatening growth, policymakers made a surprise 50 bps rate cut in early March. Other central banks also adopted stimulus measures in March.
Inflation. Rising year-over-year energy prices drove headline CPI to 2.5% in January (data released in February). But the personal consumption expenditures price index remained below the Fed’s 2% target. Inflation in the U.S. remains higher than in other developed markets. We see downside risks to global inflation in the months ahead.
Notes from the Global Fixed Income Desk
Will the global outbreak threaten prospects for emerging markets debt? Portfolio Manager Abdelak Adjriou offers his views.
March 27, 2020
Monthly analysis of the global bond market.
As the credit cycle ages and corporate bond investors grow increasingly defensive, we believe select strategies may continue to deliver value.
Sr. Client Portfolio Manager Joyce Huang explains why an unconstrained, "benchmark-agnostic" approach with a rigorous risk-management effort may offer a better solution than tracking a benchmark index.
Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.
The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.
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