The Insight by Oaktree Capital

Armen Panossian, Danielle Poli, and Wayne Dahl discuss macroeconomic tailwinds turning into headwinds, Goldilocks thinking in the market, opportunities in asset backed finance, risk in the US housing market, market normalization, and the challenge of reading the economy.

Head of Performing Credit and Assistant Portfolio Manager discuss the risks and opportunities of 'Goldilocks thinking' prevalent in today's markets. Topics covered include the caution towards prevailing market narratives, impact of declining interest rates, populism and economic protectionism, credit card debt and future economic scenarios, risks and opportunities in commercial real estate and high-yield bonds, European bond issuance and CLO performance.

Howard Marks, David Rosenberg, and Aman Kumar discuss the challenge of resetting one's idea of normal in financial markets. They explore the drivers behind the recent market rally and the potential pivot of the Fed. The speakers also highlight the risks and trends for 2024, including consumer spending and an exciting trade opportunity. They delve into the shifts in the life sciences public equity market, exploring volatile valuations and non-dilutive financing opportunities.

Experts discuss the market outlook and the concept of 'normal' in terms of interest rates and inflation, analyzing the impact of reducing inflation rates and the possibility of a recession. They explore opportunities in alternative financing and the revival of the biotech M&A market. The volatility and opportunities in emerging market debt are also analyzed. Important insights from Oaktree Capital's quarterly letters are highlighted.

Annie Duke, former professional poker player and best-selling author, joins Howard Marks to discuss decision-making under uncertainty, separating outcomes from decision quality, improving decision-making through diverse perspectives, the significance of intellectual humility and risk management, quantifying subjective judgments, and exploring risk and the diversity of outcomes.

Howard Marks (Co-Chairman) and Armen Panossian (Head of Performing Credit) discuss the implications of a potential sea change in the investment environment, tail risks in today's markets, and the concept of a full return world. They also explore the risks of higher interest rates, opportunities for opportunistic investors, and share their biggest surprises in the economy and stock market.

In the latest Performing Credit Quarterly, Oaktree argues that investors analyzing today’s leveraged credit markets should focus less on average risk and more on tail risk, as this segment of the market is currently much more vulnerable than usual. Armen Panossian (Head of Performing Credit) and Danielle Poli (Assistant Portfolio Manager, Global Credit) explore the risks and opportunities for credit investors if this tail risk becomes a tail reality.You can read the 3Q2023 PCQ here (https://www.oaktreecapital.com/docs/default-source/default-document-library/performing-credit-quarterly-3q2023.pdf?sfvrsn=6bf05166_3).

Wayne Dahl, Robert O’Leary, and Mark Jacobs discuss credit investor strategies in a volatile interest rate environment, attractive sectors for opportunistic credit investors, misconceptions about the commercial real estate market, and the opportunity to buy high-quality assets at discounted prices.

Portfolio managers discuss the challenges of predicting interest rate moves and their impact on speculative grade credit. They also explore the effects of government spending on energy and infrastructure investments and the potential for attractive investments in Chinese equity markets. Plus, the importance of observing actions of governments and companies in emerging markets.

Learn about the changes in European credit, challenges of the post-easy money era, risks of geopolitics and AI, and the quality advantage in European markets. Explore the role of banks, syndicated loans, CLOs, high yield bonds, investment grade bonds, and private credit. Discuss the dilemma of buying opportunities, jurisdiction differences, mispriced risks, labor force shortage, risks of higher interest rates, and the impact of AI. Navigate uncertainty in the market and discover potential opportunities.