There was not much market-moving news during the week, not surprising in that it was the last full week of the year with Christmas and the start of Hanukkah right in the middle of the week. Nonetheless, global stocks and US Treasuries stuck right to the script that has characterised much of the year – stocks were better (in spite of post-Christmas weakness in US stocks), and yields on UST bonds inched higher across the curve. With only two trading days left in the year, risk assets look certain to register another year of spectacular gains. This includes most global stock markets, as well as perhaps the “mother of all risk assets”, Bitcoin. However, for fixed income investors, it has largely been another year to forget, at least as far as intermediate and longer duration US Treasuries. Corporate bonds have fared slightly better, more notably as you move into higher risk areas likes non-investment grade (i.e. high yield) corporate bonds as credit spreads continued to grind tighter most of the year. Another surprise came in the form of gold, which is up nearly 27% YtD. The oft-mentioned use of gold as an inflation hedge lost a bit of relevancy as the world experienced disinflation throughout the year, so its rise was undoubtedly helped by investors – especially central banks – looking to diversify away from the greenback (in reserves) and into an alternative store-of-value that is less subject to U.S. interference and manipulation. Even so, this had little effect on the U.S. Dollar, which rediscovered its mojo in early October and has headed higher ever since off the back of expected relative changes in monetary policy across key economies and – let’s be real – ongoing U.S. exceptionalism.
I just penned a 2025 outlook for private credit, working with my dear friends at #Percent.com (website percent.com). You can get the update by going to their website, or I can forward a PDF copy directly to you if requested.
The weekly updated tables are below. Wishing you and your loved ones a very happy and successful 2025, and thank you for reading my gibberish from time to time.
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