WHAT WE THINK…

 

WHAT WE THINK

“COVID-19 has shocked society to the core – not just in terms of health, but also in social, economic and financial terms. The most sinister feature of this virus is that many, perhaps the majority of carriers, are asymptomatic, resulting in a health impact that is only seen with some amount of delay, making it difficult to detect and prevent. While the social cost will not be easily measured, the disruption to all aspects of society is clearly massive. Unlike past crises, this a health crisis, that policymakers (health experts and politicians) are primarily able to combat with the most primitive of tools – quarantine – that the world has used at times throughout its history. It is far to soon to know the scale of the economic costs as the COVID-19 environment (social distancing and all that it entails together with extensive policy intervention) has emerged so rapidly and there are no trends yet to extrapolate. The markets are perhaps the only measure we can use with any kind of haste, but here too we are subject to enormous amount of volatility and the frivolity of investor sentiment.”

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Q1 2020

 

 

Lorica Focused Fixed Income

“In has been roughly two months since large parts of the global economy have been shutdown and predictably the data is painting a pretty horrid picture. High frequency data such as US jobless claims have been the quickest to show the tragic collapse of employment as many service sector jobs have disappeared to lockdowns. However, jobless claims mask the true decline of work as many employers have opted to retain employees with the aid of government subsidies, despite those employees being underemployed due to the fall-off in demand. Over time, as the economy gradually opens up, some laid-off employees will go back to work, while other’s may find themselves newly unemployed as their employer eventually reacts to stunted demand and the ending of government subsidies.”

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April 2020 Commentary

 

Lorica Focused Corporate Bond

“Credit markets rallied in April on corporate bond quantitative easing announcements by the Bank of Canada (initiation) and Federal Reserve (expansion of scope) as they signaled a clear commitment to underpin the corporate bond market. The dramatic improvement in investor sentiment, liquidity and primary issuance resulted in corporate spreads gapping in by 48 basis points over the month. Risk-on sentiment generally resulted in the outperformance of higher-beta and subordinated debt issues. However, trepidation surrounding issuers harmed most by containment measures and BBB-rated credits with negative outlooks was also evident.”

Read More →
April 2020 Commentary

  

Lorica Short Term Bond

“In has been roughly two months since large parts of the global economy have been shutdown and predictably the data is painting a pretty horrid picture. High frequency data such as US jobless claims have been the quickest to show the tragic collapse of employment as many service sector jobs have disappeared to lockdowns. However, jobless claims mask the true decline of work as many employers have opted to retain employees with the aid of government subsidies, despite those employees being underemployed due to the fall-off in demand. Over time, as the economy gradually opens up, some laid-off employees will go back to work, while other’s may find themselves newly unemployed as their employer eventually reacts to stunted demand and the ending of government subsidies.”

Read More →
April 2020 Commentary

WHAT WE THINK…
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011
 
 
FOCUSED FIXED INCOME
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011
FOCUSED CORPORATE BOND
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011

SHORT TERM

▸2019
▸2018
▸2017
▸2016
▸2015
▸2014

WHAT WE THINK…

 

WHAT WE THINK

“COVID-19 has shocked society to the core – not just in terms of health, but also in social, economic and financial terms. The most sinister feature of this virus is that many, perhaps the majority of carriers, are asymptomatic, resulting in a health impact that is only seen with some amount of delay, making it difficult to detect and prevent. While the social cost will not be easily measured, the disruption to all aspects of society is clearly massive. Unlike past crises, this a health crisis, that policymakers (health experts and politicians) are primarily able to combat with the most primitive of tools – quarantine – that the world has used at times throughout its history. It is far to soon to know the scale of the economic costs as the COVID-19 environment (social distancing and all that it entails together with extensive policy intervention) has emerged so rapidly and there are no trends yet to extrapolate. The markets are perhaps the only measure we can use with any kind of haste, but here too we are subject to enormous amount of volatility and the frivolity of investor sentiment.”

Read More→
Q1 2020

 

 

Lorica Focused Fixed Income

“In has been roughly two months since large parts of the global economy have been shutdown and predictably the data is painting a pretty horrid picture. High frequency data such as US jobless claims have been the quickest to show the tragic collapse of employment as many service sector jobs have disappeared to lockdowns. However, jobless claims mask the true decline of work as many employers have opted to retain employees with the aid of government subsidies, despite those employees being underemployed due to the fall-off in demand. Over time, as the economy gradually opens up, some laid-off employees will go back to work, while other’s may find themselves newly unemployed as their employer eventually reacts to stunted demand and the ending of government subsidies.”

Read More→
April 2020 Commentary

 

Lorica Focused Corporate Bond

“Credit markets rallied in April on corporate bond quantitative easing announcements by the Bank of Canada (initiation) and Federal Reserve (expansion of scope) as they signaled a clear commitment to underpin the corporate bond market. The dramatic improvement in investor sentiment, liquidity and primary issuance resulted in corporate spreads gapping in by 48 basis points over the month. Risk-on sentiment generally resulted in the outperformance of higher-beta and subordinated debt issues. However, trepidation surrounding issuers harmed most by containment measures and BBB-rated credits with negative outlooks was also evident.”

Read More →
April 2020 Commentary

  

Lorica Short Term Bond

“In has been roughly two months since large parts of the global economy have been shutdown and predictably the data is painting a pretty horrid picture. High frequency data such as US jobless claims have been the quickest to show the tragic collapse of employment as many service sector jobs have disappeared to lockdowns. However, jobless claims mask the true decline of work as many employers have opted to retain employees with the aid of government subsidies, despite those employees being underemployed due to the fall-off in demand. Over time, as the economy gradually opens up, some laid-off employees will go back to work, while other’s may find themselves newly unemployed as their employer eventually reacts to stunted demand and the ending of government subsidies.”

Read More →
April 2020 Commentary

WHAT WE THINK…
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011
Q4
Q3
Q2
FOCUSED FIXED INCOME
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011
FOCUSED CORPORATE BOND
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011

SHORT TERM

▸2019
▸2018
▸2017
▸2016
▸2015
▸2014