Market Insights

Gain actionable market insights with whitepapers, articles and reports from our analysts.

  • Macro Strategy

    Are We There Yet?

    March 2019

    We are in the late expansion phase of the credit cycle. At present there seems to be an elevated risk of recession by market participants in the 2020-2021 timeframe. Our credit cycle model is based on eight key indicators which we’ve back-tested rigorously since the mid-1980’s: high yield spreads, 3 mo. /10 yr. Treasury curve, Senior Loan Officer Opinion Survey, CCC issuance, non-financial debt growth, profit growth, shareholder payout ratio and Fed policy. In prior down cycles (’01, ’08, ’15) our credit model flashed an average of six sell signals each time. Today our model is flashing four sell signals. We don’t expect a credit down cycle in the next 12 months despite recent market anxiety of one potentially occurring.

  • Real Estate

    Investment Opportunities in Private Commercial Mortgages

    January 2019

    Private commercial mortgages comprise a large and diverse asset class which can provide investors favorable risk-adjusted returns, low loss rates, and low correlations with other asset classes. Additionally, their flexible structures make private commercial mortgages attractive vehicles for liability driven investment strategies.

  • Macro Strategy

    Global View: 2019 Risks

    January 2019

    We expect global growth to decelerate in 2019 even as the U.S. economy is expected to remain a point of strength. In our view, the changing relationship between the U.S. and China—and a potentially weaker Chinese economy—is the single most significant risk globally. Market volatility and business confidence are key risks. The Fed hiking cycle and oil price fluctuations also remain key concerns. There is generally more downside risk than upside risk to our 2019 view.

  • Macro Strategy

    A Stable Outlook for the U.S. Housing Sector

    January 2019

    Much of the data coming from the housing sector has been lackluster and many investors are wondering if there is cause for worry. Though the general economic recovery has been rather prolonged, we find evidence to suggest that there remain bright spots in the residential real estate market and that continued, albeit moderated, growth over the medium-to-long term is still the base case scenario.

  • Real Estate

    Real Estate and Reflation: How Rising Deficits and Partisan Gridlock May Work in Real Estate’s Favor (Abstract Only)

    December 2018

    Accelerating economic growth and a small supply pipeline relative to history have left real estate fundamentals in a solid position, especially when compared to similar periods in past cycles. As a new congress takes office next month, however, the risk of government gridlock also rises, similar to the split congress that took office in 2011. For several years following 2011, legislation was slow to move, a government shutdown slowed economic growth, and U.S. Treasury debt was either put on negative watch or downgraded by the major rating agencies. Today, rising deficits and the threat of government dysfunction may leave the Federal Reserve in the unfortunate position of balancing its low inflation mandate with the economic repercussions of potential further rating downgrades. This dynamic, as well as tariffs and a tight labor market, point toward potentially higher inflation in 2019 and beyond. Portfolio managers who increase their allocation to inflation protected sectors, such as real estate, may therefore be better positioned to outperform.

  • Macro Strategy

    2019 U.S. Growth Should Exceed Expectations

    October 2018

    2019 U.S. growth should exceed expectations as a strong consumer and a rebound in productivity allow for the economic cycle to extend further. Tax cuts are supportive of both consumption and investment while government spending should also play a role. As a consequence of healthy growth we would look for the Fed to follow its forecast of another 100 bps of tightening through year-end 2019 and expect 10-year yields to end 2019 at 3.75%.

  • Macro Strategy

    Global Debt: The Good, the Bad and the Unknown

    October 2018

    • The bad news: Government debt levels are high in the U.S. and Japan. Policymakers’ hands in these countries will likely be tied in the next recession, increasing the risk of a more prolonged downturn.
    • The good news: Consumers appear to be in good shape with relatively low leverage.
    • The wildcard: Corporate sectors appear to be diverging across countries. U.S. corporate debt is currently at extremely high levels but recent profit growth mitigates that risk. Conversely, Chinese corporate debt is moving in the other direction—the Chinese government has moved from a policy of deleveraging to managing the fallout from the ongoing U.S.-China trade war. Euro area corporate sector remains highly levered but with improved resilience.
  • Agricultural Finance

    Ag Quarterly Newsletter - Fall 2018

    Fall 2018

    International trade took center stage this summer. The U.S. farm sector bore the brunt of foreign retaliatory tariffs due to its dependence on exports. Recently, tensions with some nations have eased, but retaliatory tariffs on U.S. agricultural products remain in place and the outlook for the dispute with China remains unclear. Despite all this uncertainty, the USDA's latest outlook for the farm sector points towards continued resiliency.

  • Private Fixed Income

    Private Debt Quarterly Investment Update

    3Q 2018

    MetLife Investment Management is pleased to provide you with our latest Private Debt Quarterly Investment Update, which provides our outlook on the global private placement market.

  • Macro Strategy

    U.S.–China Trade Update

    September 2018

    The ongoing U.S.–China trade war is likely to have significant negative economic consequences on the U.S. if it continues into 2019. The U.S. administration has some leeway to prolong its aggressive negotiation tactics with the Chinese government due to the current strength of the U.S. economy and its relatively low trade exposure. China has the ability to counteract some of the negative effects of the trade war, although this will require curtailment of its much-needed de-risking campaign, including corporate sector debt deleveraging.

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