Fixed Income Update & Strategy Outlooks

Fixed Income Update & Strategy Outlooks

Hello, I'm Barry Julien, Chief Investment Officer at Oakhurst Capital Management. With a great deal of recent changes in the bond market, we thought it timely to provide a market update and mention some interesting opportunities that we are finding for our clients. This morning inflation surprised on the upside, with 0.6% readings for both core and headline CPI in January, bringing the year-over-year figure to 7.5% and 6%, respectively. These figures represent a 40 year high.
“Trouble with the Curve”

“Trouble with the Curve”

Having closed out another very impressive year for risky assets, investors turn their attention to the upcoming quarters as they search for signs that will provide clarity and predictive powers. The unprecedented involvement of the Federal Reserve in our financial markets, though, has muddied the typical metrics in which many investors have historically found comfort. In the equity market, investors often focus on ratios such as price-to-earnings, price-to-book, and price-to-sales, while also employing models like the discounted cash flow approach. Interest rates have a meaningful influence on valuations of all assets, with the U.S. dollar rates always being the primary benchmark across global markets.