DoubleLine's Robert Cohen Shares High Yield Outlook in Pensions & Investments

Rhea-AI Summary

On February 22, 2023, Robert Cohen, Director at DoubleLine Capital, highlighted in Pensions & Investments the resilience of the high yield corporate credit market amidst recession signals. He cautioned against misinterpreting low spreads as an economic recovery signal, attributing market buoyancy to a decade-long improvement in issuer fundamentals and sector composition. Cohen analyzed credit quality evolution among high yield corporates, providing insights into this asset class's outlook. His article, titled 'Reading the macro and credit messages from high-yield corporates,' offers a comprehensive view on the fixed income sector.

Positive

• High yield corporate credit market shows resilience despite recessionary signals.
• Improvement in issuer fundamentals over the past decade supports market stability.

Negative

• None.

News Market Reaction

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LOS ANGELES, Feb. 22, 2023 /PRNewswire/ -- The high yield corporate credit market historically has acted as an early warning signal for recessions. In a guest column for Pensions & Investments, Robert Cohen, Director of the Global Developed Credit team at DoubleLine Capital, explains why high yield spreads remain low to moderate despite warning signals from a raft of leading economic indicators.

"Some might feel tempted to misread the anomalous buoyancy of the below-investment grade securities as an all-clear signal for the economy. It is not," Mr. Cohen writes. "An upgrade in issuer fundamentals and a changing of the guard in the sector's composition, a decade in the making, undergirds this market's resilience in the face of recessionary indicators."

Mr. Cohen goes on to analyze the evolution of the credit quality of high yield corporates as an asset class. Then he shares his outlook for this part of the fixed income universe and its sectors.

To access the article, titled "Reading the macro and credit messages from high-yield corporates," please click on the following link: https://doubleline.com/wp-content/uploads/Reading-Macro-and-Credit-Messages-from-HY-Corps_Cohen_021723.pdf

About DoubleLine

DoubleLine Capital is an investment adviser registered under the Investment Advisers Act of 1940. DoubleLine's offices can be reached by telephone at (213) 633-8200 or by e-mail at info@doubleline.com. Media can reach DoubleLine by e-mail at media@doubleline.com. DoubleLine^® is a registered trademark of DoubleLine Capital LP. 

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SOURCE DoubleLine

FAQ

What did Robert Cohen discuss regarding the high yield corporate credit market on February 22, 2023?

Robert Cohen discussed the resilience of the high yield corporate credit market and cautioned against misreading low spreads as economic recovery signals.

How have issuer fundamentals affected the high yield corporate credit market?

Improved issuer fundamentals over the last decade have contributed to the stability of the high yield corporate credit market despite recession indicators.

Where can I read the full article by Robert Cohen on high-yield corporates?

You can read the full article titled 'Reading the macro and credit messages from high-yield corporates' at DoubleLine's website.

What is the significance of low high yield spreads according to Robert Cohen?

Low high yield spreads shouldn't be taken as a positive economic signal; they may reflect underlying market resilience rather than recovery.