US High Yield 2024 Outlook (2024)

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US High Yield 2024 Outlook (2024)

FAQs

US High Yield 2024 Outlook? ›

High yield spreads have tightened considerably over the past several quarters. As of March 31, 2024, the BofA ICE US High Yield Index's (the “Index”) spread-to-worst was 332bps, significantly lower than the 20-year median of 454bps and at the low end of the post-GFC* general “non-panic range” of 350-550 bps.

Is there a high-yield outlook for 2024? ›

Looking at the asset class's historical performance leads us to believe that high yield is poised to produce a positive return in 2024, albeit not as robust as that experienced in 2023. We believe that the economy is not rolling over and that a recession is likely to be at least six months away.

What is the outlook for US high-yield bonds? ›

Therefore, the market feels that the real growth in the US remains in a 2% to 3% trend, and a solid economic outlook has kept high yield spreads in check. US high yield ended the month with a yield to worst of 8.20% and spread of 318. Yields are up approx. 50 bps in 2024 to date, while spreads are down about 20 bps.

What is the outlook for municipal bonds in 2024? ›

We believe the municipal market is poised for improvement in 2024. The Fed's anticipated easing this year should bolster demand for municipal bonds. If investor sentiment shifts positively, as we expect, strengthening demand could absorb secondary market supply and act as a catalyst for spread tightening.

What percentage of a portfolio should be in high-yield bonds? ›

Meketa Investment Group recommends that most diversified long-term pools consider allocating to high yield bonds, and if they do so, between five and ten percent of total assets in favorable markets, and maintaining a toehold investment even in adverse environments to permit rapid re-allocation should valuations shift.

What are the predictions for interest rates in 2024? ›

But until the Fed sees evidence of slowing economic growth, interest rates will stay higher for longer. The 30-year fixed mortgage rate is expected to fall to the mid-6% range through the end of 2024, potentially dipping into high-5% territory by the end of 2025.

Will 2024 be a bull or bear market? ›

The S&P 500 soared throughout the year and finally reached a new high in January 2024, making the new bull market official. The onset of a new bull market has historically been a very reliable stock market indicator.

Should I invest in high yield bonds now? ›

Waiting to Re-Risk May Be Risky

For those willing to accept the higher credit risk and liquidity risk of high-yield corporate bonds, we believe today's climate offers attractive opportunities. High-yield bond prices tend to gap, and outsized returns have historically occurred over short time horizons.

What is the bond yield prediction for the US? ›

The April 4-9 Reuters poll of 81 bond strategists showed the 10-year yield is expected to fall about 24 bps from 4.39% on Tuesday to 4.15% by end-June and then to 4.00% in six months, wiping out most of its year-to-date rise.

What is the US bond yield outlook? ›

After topping out at 4.98% in October 2023, 10-year Treasury yields dropped below 4%, but trended higher over the course of 2024, with modest up-and-down-movements. Source: U.S. Bank Asset Management Group, Bloomberg as of May 3, 2024.

Is it a good time to buy muni bonds? ›

Nuveen, a TIAA company, maintains yields for municipals remain attractive despite a strong rally in November 2023. The company believes demand for municipal bonds could increase in 2024 as investors gain conviction that the Fed has ended its rate hikes. Nuveen expects the Fed to cut rates by 150 basis points in 2024.

What is the long term bond rate forecast? ›

The United States 20 Years Government Bond Yield is expected to be 4.826% by the end of September 2024.

What is the bond return forecast? ›

BlackRock's models call for a 5.0% expected 10-year return from U.S. aggregate bonds versus 4.2% in 2022 and less than 2.0% in 2021.

What happens to high yield bonds in a recession? ›

The big deal with high-yield corporate bonds is that when a recession hits, the companies issuing these are the first to go. However, some companies that don't have an investment-grade rating on their bonds are recession-resistant because they boom at such times.

At what age should you get out of the stock market? ›

There are no set ages to get into or to get out of the stock market. While older clients may want to reduce their investing risk as they age, this doesn't necessarily mean they should be totally out of the stock market.

What is the 5% portfolio rule? ›

This rule is a popular investment strategy that helps investors determine how much risk they should take on based on their investment goals and risk tolerance. Essentially, the rule states that a well-diversified portfolio should never have more than 5% of its capital invested in a single stock or security.

Will interest rates go up again in 2024? ›

KPMG chief economist Brendan Rynne said he expects interest rates to remain on hold for much of 2024 before a possible cut towards the end of the year. “The biggest threat to this – and of inflation taking off again – is fiscal policy going into expansion mode in next week's Budget,” he said.

What is the market forecast for 2024? ›

Analysts project 11.5% earnings growth and 5.5% revenue growth for S&P 500 companies in 2024. Fortunately, analysts see positive earnings and revenue growth for all eleven market sectors this year.

What is the financial outlook for 2024? ›

The US economy started 2024 on a softer note than anticipated as elevated inflation and interest rates continued to weigh on the economy. While we do not forecast a recession in 2024, we do expect consumer spending growth to cool further and for overall GDP growth to slow to under 1% over the Q2 to Q3 2024 period.

Is 2024 a good year to invest? ›

With interest rates projected to remain higher for longer, the stock market has taken a breather in 2024, after a strong run the year before. This situation has made a particularly good time for lower-risk investments that can still earn a relatively attractive return such as savings accounts and CDs.

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