US Treasuries did what they are supposed to do last week. Softer than expected guidance for OpenAI and Anthropic raised concerns broadly across the AI cohort. The Nasdaq 100 dropped 5.5%, and the 10-year Treasury yield fell by 17 basis points as investors bought safe-haven assets. The bond rally is significant because Treasuries have struggled to provide protection during stock market downturns in recent months.
The Australian 10-year also fell and closed yesterday at 5.21%.
AI is no longer just an equity theme, according to Benoit Anne from MFS Investment Management. He says that it is increasingly shaping high yield, credit spreads and government bond yields.
Thomas Poullaouec of T. Rowe Price is back with his popular global asset allocation summary. He delves into the AI credit ecosystem and explains their underweight stance.
There were two very good reports released this week. Amelia Gao from the RBA assessed the importance of the corporate, Australian dollar bond market. VanEck released a report showing financial advisers’ increasing investment in smart beta strategies.
CBA published an interesting article on a record month for domestic corporate bonds.
Finally, we publish the Committee for Economic Development of Australia’s (CEDA) report on the misery index, which is back up at post-pandemic highs.
Hope you’re having a great week!
