Insight – Cincinnati Asset Management

13 Nov 2026

Insight, Investment Grade Weekly Josh Adams - Portfolio Manager 0 comment

CAM Investment Grade Weekly Insights

Credit spreads moved meaningfully tighter this week, while Treasury yields increased substantially over the course of the past 5 trading days. The OAS on the Corporate Index closed at 86 on Thursday November 12^th after closing the week prior at 91. The 10yr Treasury ended last week at 4.86% and it closed at 5.13% on Thursday evening. Through Thursday, the Corporate Bond Index year-to-date total return was -1.78% and the yield to maturity for the index was 5.98%, an extremely compelling level of compensation, in our view.

Bond Market Weekly

Investment grade issuance was solid this week, with $42bln of new supply relative to the $40bln estimate. This was a fairly impressive tally considering the bond market was closed on Wednesday in observance of Veteran’s Day. Next week presents one last opportunity to raise capital before the seasonal slowdown during the week of Thanksgiving –syndicate desks are looking for $35bln of new issuance. YTD issuance now stands at $1.915trln and is on pace to exceed the $2trln mark in early December, if not before then.

The Treasury market was for sale this week on the back of a hot CPI release on Tuesday morning. There were also several public speeches by FOMC members during the week with a common theme that they are cognizant of the fact that inflation is heading in the wrong direction. Certain members of the FOMC also are becoming more public with their comments about the Fed’s ability to control supply-driven inflation. An increase in the policy rate is not going to do anything for the scarcity of diesel or alleviate oil prices. The best chance for relief on the inflation front is a credible agreement with Iran and relative calm in the straight of Hormuz. The Fed’s preferred inflation gauge looms large, with a CPE release on 11/25. As we go to print, interest rate futures are pricing a 109% chance of a 25bp hike at the next FOMC rate decision on December 9^th. A figure >100% indicates that traders are speculating on the possibility of a 50bp hike.

Flows

According to LSEG Lipper, for the week ended November 11^th, short and intermediate investment-grade bond funds reported a modest net outflow of -0.694bln. This was the fourth consecutive week of outflows, but 2026 year-to-date net flows are still soundly positive at +$104bln and remain well ahead (57%) of 2025’s pace.

This information is intended solely to report on investment strategies identified by Cincinnati Asset Management. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. Fixed income securities may be sensitive to prevailing interest rates. When rates rise the value generally declines. Past performance is not a guarantee of future results.

13 Nov 2026

High Yield Weekly, Insight Rich Balestra - Portfolio Manager 0 comment

CAM High Yield Weekly Insights

(Bloomberg) High Yield Market Highlights

US junk bonds stalled for a second straight session Thursday as resilient jobless-claims data overshadowed pockets of AI-related job cuts, fueling bets that the Federal Reserve will raise interest rates in December. Sharply rising Treasury yields added to the pressure, pushing junk-bond yields higher across ratings and driving negative returns.
The selloff gathered pace as the Treasury rout reignited inflation fears and New York Fed President John Williams joined a growing chorus of officials calling for further policy action, warning that inflation remains “far too high” even after the latest data.
New York Fed President’s call for action came after Fed Governor Christopher Waller said a December hike would be appropriate, a view since echoed by Governor Michelle Bowman and Dallas Fed President Lorie Logan. Logan went further, calling for at least two quarter-point increases and signaling they may need to come at a faster pace
The 5- and 10-year Treasury yields rose by 15 and 13 basis points, respectively, to close at 4.97% and 5.13%. BB yields closed at 6.99% and single-B yields at 8.22%
The risk-off tone deepened as the leadership crisis at Nvidia Corp. revived concerns about the vulnerability of the broader artificial intelligence industry and the durability of AI-fueled growth.
The mounting risk aversion froze the primary market, with no new bond sales launched or priced. The primary market may remain cautious ahead of the weekend.

(Bloomberg) US Core CPI Rises by More Than Forecast, Supporting Fed Hike

A key gauge of US consumer prices posted another firm advance in October, keeping the Federal Reserve on track to raise interest rates next month.
The consumer price index, excluding food and energy, rose 0.3% from a month earlier, according to Bureau of Labor Statistics data out Tuesday, topping estimates for a third straight month. Overall prices jumped 0.4% as the cost of essentials climbed across the board.
The report suggests price pressures continued to build just ahead of this month’s midterm elections, when Democrats retook both chambers of Congress following campaigns largely focused on the cost of living. The Iran war, tariffs and the data center boom have all helped fan inflation this year.
It’s the last CPI report Fed officials will see before their Dec. 8-9 policy meeting. Investors expect them to raise interest rates at that gathering to counter inflation, following a quarter-point increase in September and a decision to leave rates unchanged in October.
The BLS didn’t publish year-over-year changes because data collection was interrupted last October during the government shutdown.
The report showed broad-based increases across a range of everyday goods and services. Grocery prices rose by the most since April, including a record 5.1% surge in baby food and formula prices.
Owners’ equivalent rent, a gauge of housing costs that is the largest component of the CPI, rose 0.3%. Electricity prices jumped 0.9%, and motor vehicle insurance prices advanced by the most in more than a year.
Gasoline rose 1% in October, though oil prices have plummeted over the last week amid rising optimism around diplomatic efforts to end the war in the Middle East. Other categories suggested the energy shock continues to filter through the economy: Airfares rose 0.4%, while delivery services prices also increased.
Broader services prices excluding energy and rents climbed 0.4%, according to data compiled by Bloomberg. Health insurance prices fell by the most in more than three years after the BLS incorporated in October a semi-annual update using industry data on premiums and benefits, though a wide range of other medical care services showed the biggest increases in several months.
Recreation services prices rose last month by the most this year.
Core goods prices rose 0.2%, even as used-car prices declined. Categories particularly exposed to tariffs — including household furnishings, appliances and toys — saw material price increases.

06 Nov 2026

High Yield Weekly, Insight Rich Balestra - Portfolio Manager 0 comment

CAM High Yield Weekly Insights

(Bloomberg) High Yield Market Highlights

US junk bonds tumbled Thursday, a day after posting their biggest gains in six months, as renewed fears over the AI trade routed equities and drove investors away from risk. Yields jumped and spreads widened to 340 basis points, matching a 17-month high reached last week, while the S&P 500 plunged the most since the April 2025 tariff shock.
The selloff affected all ratings, as Democratic control of Congress stoked fears of tighter regulation that could restrain the rapid expansion of data centers, challenge lofty valuations and curb the AI-driven investment boom.
BB spreads widened 14 basis points to 209, a seven-month high, and yields rose to 6.93%, fueling the biggest one-day loss in three weeks.
However, the primary market defied the broader selloff, with three deals pricing for more than $2b and lifting the week’s issuance tally to nearly $10b
US junk bonds may stage a modest rebound from Thursday’s selloff as steady oil prices and firmer US equity futures offer some support to risk-on sentiment.

(Bloomberg) US Adds 165,000 Jobs, Topping All Forecasts in Broad Advance

US job growth surged in October and the unemployment rate edged lower, a sign of labor-market strength in an expanding economy.
Nonfarm payrolls increased 165,000 last month, topping all forecasts, after an upward revision to the prior two months, according to Bureau of Labor Statistics data out Friday. The unemployment rate fell to 4.1%.
Employers across a broad range of sectors added jobs, including in professional and business services, healthcare and manufacturing. Overall private-sector payroll growth was the strongest since March.
Resilient consumer spending and strong business investment have supported demand and boosted corporate profits this year, encouraging companies to add more workers. Job growth has been uneven from month to month, but overall hiring has been strong enough to keep the unemployment rate low.
Federal Reserve officials will see one more jobs report and a full slate of inflation data before their next meeting in December. Investors expect them to raise interest rates at that gathering to counter inflation, following an increase in September and a subsequent decision to leave rates unchanged in October.
Fed Chairman Kevin Warsh last week described employment conditions as “quite positive” and said the central bank was focused on prices. The yield on 2-year Treasury notes rose and S&P 500 futures remained higher following the release.
Healthcare and social assistance employers added about 55,000 workers to payrolls in October, the most in six months. That sector has been the biggest driver of job growth in recent years.
Spending on data centers and demand for AI-related infrastructure has supported construction and manufacturing employment this year. Friday’s report showed that nonresidential construction firms continued to add jobs, even as broader construction payrolls were weighed down by losses in residential building.
Factory headcount also saw solid gains, with computer and electronic product manufacturing firms in particular adding the most jobs in four years.
Employment in the information and financial activities sectors, which have seen some of the fastest rates of job loss and AI adoption this year, showed tentative signs of stabilization in October.
Goldman Sachs Group Inc. economists, in a note published this week, said “AI’s labor market impact has become increasingly visible in recent months,” with “higher adoption associated with weaker job growth and higher unemployment” across nonmanufacturing industries.
The report also suggested the labor market is generating little wage pressure. Average hourly earnings advanced 3.1% from a year earlier, matching the slowest pace since 2021. On a monthly basis, however, they rose 0.4%, topping forecasts.
The wage figures highlight a key source of voter frustration in this week’s midterm elections. While the unemployment rate has been low, pay hasn’t kept up with inflation throughout most of 2026.
The participation rate — the share of the population that is working or actively looking for work — edged up to 61.9% in October, the highest since March. A broad measure of unemployment also rose as the ranks of those working part-time for economic reasons jumped to a six-month high.
Measures of long-term unemployment worsened, with the median duration of a jobless spell reaching 11.9 weeks, the longest since 2021. Labor-market turnover has been historically low for much of the last few years, which has made it difficult to find new jobs and led many to feel either locked out or stuck in place.

06 Nov 2026

Insight, Investment Grade Weekly Josh Adams - Portfolio Manager 0 comment

CAM Investment Grade Weekly Insights

Credit spreads have been drifting wider for most of the past month and the trend continued this week, while Treasury yields have moved the opposite direction and are now meaningfully lower from recent highs. The OAS on the Corporate Index closed at 91 on Thursday November 5^th after closing the week prior at 90. For context, the index was at 80 at the beginning of October. The 10yr Treasury ended last week at 4.93% and it closed at 4.83% on Thursday evening after trading as high as 5.30% in early October. Through Thursday, the Corporate Bond Index year-to-date total return was -0.53% and the yield to maturity for the index was 5.73%.

Bond Market Weekly

Investment grade issuance was robust this week, to say the least. Oracle, Meta and Apple led the way as dozens of companies priced $74.4bln of new debt. This smashed the forecast of $45bln. The month is off to a strong start relative to the $150bln dealer supply estimate for the entirety of November.[i] The latter part of the month has historically been very quiet in the bond market due to the Thanksgiving holiday.

[i] Bloomberg, November 6^th 2026, “US IG OPEN: Bond Sales Pause After Tech Titans Boost Volume”

The US midterm election was at the forefront followed by a strong payroll report on Friday. Our takeaway from the election is more regulation on Artificial Intelligence and a more measured pace of the build-out in the years to come. In some ways, more regulatory scrutiny may well save some of these companies from themselves by throttling back their capital expenditures. Equities staged a rally on Wednesday before collapsing on Thursday, led by a sell-off in technology shares. The US added 165,000 jobs in the month of October across a broad range of sectors and the unemployment rate ticked lower to 4.1%.

The FOMC does not meet during the month of November, with the next decision scheduled for December 9^th. If the next payroll report (12/4) is similar to this one, then the Fed will likely have no choice but to hike. Inflation data is also an important piece of the puzzle –CPI is next week (11/10) and the next PCE report comes at the end of this month (11/25). As we go to print, interest rate futures are pricing a 78% chance of a hike at the Fed’s next meeting.

Flows

According to LSEG Lipper, for the week ended November 4^th, short and intermediate investment-grade bond funds reported a modest net outflow of -0.707bln. This was the third consecutive week of outflows, but 2026 year-to-date net flows are still soundly positive at +$105bln.

30 Oct 2026

High Yield Weekly, Insight Rich Balestra - Portfolio Manager 0 comment

CAM High Yield Weekly Insights

(Bloomberg) High Yield Market Highlights

On Thursday, US junk bonds stalled after a three-day rally as strong economic data and a renewed tech selloff pushed yields higher and spreads A day after the Federal Reserve held rates steady, data showed the US economy grew at its fastest pace in a year in the third quarter, while the Fed’s preferred inflation gauge rose the most in six months.
Strong growth data revived inflation fears, while lingering skepticism over the AI trade and returns on massive investments added to the risk-off tone.
BB spreads climbed to 192 basis points and yields rose to 6.92% on Thursday, reversing three days of declines
CCC spreads widened 19 basis points to 1,096 and yields rose 13 basis points to 15.71%
The risk-off backdrop brought new issuance to a crawl, as elevated yields, wider spreads, rising oil prices and persistent doubts over returns on AI investments kept borrowers on the sidelines
October volume limped to about $15b, making it the second-slowest month of the year after the August lull. Issuance averaged just $3.5b a week over the final four weeks.

(Bloomberg) Fed Holds Fire as Warsh Telegraphs More Hikes Without Saying It

Federal Reserve Chairman Kevin Warsh on Wednesday left the central bank on track to raise interest rates again this year, even as he stuck to his refusal to offer any explicit guidance on the future path of policy.
Operating within his self-imposed communication boundaries, Warsh used his assessment of a strong economy and warnings over persistent inflation to signal the Fed’s job is not yet done. The message reinforced expectations that officials will raise borrowing costs in December — after holding them steady Wednesday — with the potential for another increase in early 2027. Still, Warsh was careful to leave his options open.
Warsh opened his Wednesday press conference by cataloging the economy’s strengths: first-half GDP revised up to 2.4%, third-quarter growth tracking north of 3%, double-digit gains in business investment and near-historic lows in jobless claims. That underlying resilience, Warsh argued, gives the Federal Open Market Committee the room it needs to train its focus squarely on an inflation rate that has lingered above the Fed’s 2% target for nearly six years.
He also underlined the Fed’s willingness to take action, pointing as evidence to their unanimous decision in September to hike for the first time in three years. And he emphasized that the Fed would benefit from the “information-rich interval” between now and its December meeting.
“It’s our responsibility to get inflation down,” Warsh said following the central bank’s 10-2 vote to hold the benchmark federal funds rate in a range of 3.75% to 4%. “That’s the reason the FOMC’s discussion over the last couple of days focused mainly on the price stability side of our remit.”
Several economists said they expect the Fed to hike a total of two more times, effectively reversing the cuts they made in late 2025 to shore up a wobbly labor market. As of Wednesday afternoon, investors were expecting rate hikes in December and March, according to pricing in futures contracts.
The decision to hold rates yielded dissents from Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack, who would have preferred to hike. Some policymakers who have been warning about high inflation, including Dallas Fed President Lorie Logan and Minneapolis Fed President Neel Kashkari, voted with the majority, but Nationwide Chief Economist Kathy Bostjancic said they likely supported the decision because they expect the Fed to raise rates again in December.
Even with a December hike on the table, Warsh made clear he’s not trying to choke off growth, suggesting he wants to curb inflation without slowing down business investment or hiring.
Asked how much inflation is being driven by demand from the artificial intelligence build-out, Warsh pivoted, pointing instead to unmeasured gains in underlying worker and technological efficiency.
“Is the economy running too hot? Is the economy running too strong? That isn’t the judgment of most of my colleagues,” Warsh said. “Economic growth is higher, but that doesn’t tell me that economic growth is somehow causing inflation, making our job harder.”
The Fed’s goal “isn’t to throw sand in the gears of the economy and throw people out of work,” he added.
Where Warsh sounded more cautious — acknowledging that credit conditions had tightened since the Fed raised rates in September — he stopped short of declaring that market conditions are tight enough to slow growth on their own.
“While overall financial conditions are tighter, I’m unwilling and unable to call them tight,” Warsh said.

This information is intended solely to report on investment strategies identified by Cincinnati Asset Management. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. Fixed income securities may be sensitive to prevailing interest rates. When rates rise the value generally declines. Past performance is not a guarantee of future results.

23 Oct 2026

High Yield Weekly, Insight Rich Balestra - Portfolio Manager 0 comment

CAM High Yield Weekly Insights

(Bloomberg) High Yield Market Highlights

US junk bonds showed resilience amid a broad move to shed risk, eking out small gains as yields fell for a second straight session on Thursday despite plunging equities, surging oil prices and escalating Middle East tensions. The market also looked past concerns over an AI-fueled debt wave, with yields lower across ratings except CCCs.
CCC yields surged to close at 15.85%, the highest since the pandemic. CCC spreads widened 33 basis points to close at 1,111, a new four-year high.
Risk premiums jumped to a 17-month high on expectation of a supply boom fueled by AI expansion. “We remain cautious on spreads,” Barclays strategists Brad Rogoff and Dominique Toublan wrote on Friday. AI-driven supply is expected to keep a lid on short-term spread tightening, Barclays wrote.
The primary market continued to be cautious amid persisting uncertainty over the stability of the artificial intelligence industry and issuance overhang fueled by AI buildup.
The market priced just one deal on Thursday, driving the week’s volume to $3.4b amid broad risk-off sentiment during the week.

(Bloomberg) US Consumer Sentiment Slips to Five-Month Low on Inflation

US consumer sentiment edged down to a five-month low in October as high prices and rising interest rates depressed morale.
The University of Michigan’s final sentiment index eased to 48 from 48.1 in September, according to the survey released Friday. Even so, that was an improvement from the preliminary reading and topped all estimates in a Bloomberg survey of economists.
Consumers expect prices to rise 4.7% over the next year, up from 4.6% in the previous month. They also saw costs climbing at an annual rate of 3.5% over the next five to 10 years. Both were the highest since May.
“After five years of above-target inflation, both short- and long-term inflation expectations have ticked up in recent months, exposing risks that elevated inflation expectations could become entrenched,” Joanne Hsu, director of the survey, said in a statement.
Consumer sentiment continued to deteriorate in October amid persistent inflation, tepid hiring and elevated mortgage rates. Prices at the pump remain well above $4 a gallon, compounding longstanding frustrations with the cost of living.
In recent months, price increases have outpaced pay gains, further pressuring household budgets. Data out last week showed consumer prices rose in September at the fastest pace in five months.
Economic issues like the cost of living remain front and center for Americans in the final stretch of midterm campaigns.
“Consumers of all political persuasions agree that inflation is overwhelmingly the greater risk to the economy in the year ahead than unemployment,” Hsu said.
Sentiment among Democrats and Republicans improved somewhat in October, while sentiment among independents fell for a third straight month.

A gauge of buying conditions for durable goods fell to a record low in October, with the report citing higher interest rates and rising affordability concerns. Nearly 70% of consumers expect interest rates to rise in the year ahead, the highest in more than three years.
The current conditions gauge sank to the second lowest on record, while an index of consumer expectations improved for the first time since July.
The survey period includes responses from Sept. 22 to Oct. 19.

(Bloomberg) US Housing Headwinds Build as Mortgage Rates Climb

Housing construction – one of the economic sectors most sensitive to interest rates – is facing intensifying headwinds as mortgage rates have moved significantly higher. Housing starts fell sharply in September, with declines in both single and multifamily construction. Building permits, a leading indicator of future construction, also remained weak, particularly for single-family homes. Higher financing costs are compounding an already severe affordability squeeze from elevated home prices, property taxes and insurance costs.
Housing starts declined 5.2% in September to an annualized pace of 1.221 million, below the consensus forecast of 1.305 million

21 Oct 2026

Insight, Investment Grade Quarterly CAM Team 0 comment

Comentarios y perspectivas sobre el tercer trimestre

Comentarios y perspectivas sobre el tercer trimestre
Octubre de 2026

El mercado de bonos de grado de inversión atravesó un entorno difícil durante el tercer trimestre del año. La ampliación de los diferenciales de crédito y el aumento significativo de las tasas de interés provocaron rendimientos negativos para esta clase de activos.

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Resumen del tercer trimestre
El tercer trimestre presentó una volatilidad creciente día tras día, especialmente en las últimas semanas del período. Aunque la ampliación de los diferenciales fue moderada, se negociaron dentro de un rango notablemente estrecho y se mantuvieron bastante estables hasta el final del trimestre. El diferencial ajustado por opciones (OAS) del Índice de Bonos Corporativos Bloomberg US (el Índice) inició el período en 74 y se desplazó a un OAS de 80 al cierre del trimestre.

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Los tipos de interés fueron los responsables de la mayoría de los obstáculos durante el trimestre, ya que los rendimientos del Tesoro aumentaron gradualmente a lo largo de septiembre. Al cierre del trimestre, los rendimientos de los bonos del Tesoro a 2, 5 y 10 años habían aumentado 72, 86 y 82 puntos básicos, respectivamente. Los bonos del Tesoro a 10 años cerraron al 5.29 % el último día del trimestre, lo que marcó su nivel más alto desde 2002.

Nuevo Orden Mundial
Los mayores rendimientos no son un fenómeno exclusivamente estadounidense. Varias economías globales desarrolladas también fueron testigos de cómo los rendimientos alcanzaron sus máximos en varios años. En Japón, los rendimientos han alcanzado un máximo generacional. Existen numerosos factores que favorecen el aumento de los rendimientos globales; en algunos casos, se trata de cuestiones idiosincrásicas relacionadas con economías individuales, pero el repunte de los precios del petróleo ha sido un factor importante en el alza de las tasas en todo el mundo.

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Si observamos específicamente el crédito de grado de inversión, la rentabilidad al vencimiento del Índice cerró el trimestre por encima del 6 %.

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El Índice solo ha cerrado por encima del 6 % en 41 ocasiones (1.61 %) durante la última década. En los últimos 20 años, el Índice ha cerrado por encima del 6 % en 372 ocasiones de un total de 5054 días de negociación posibles (el 7.36 % de las veces). El período de 20 años abarca la Gran Crisis Financiera de 2007-2009. El Índice cerró en un máximo de 9.09 % durante el peor momento de la Gran Crisis Financiera.

Si bien los recientes episodios de volatilidad en las tasas de interés presentan desafíos para el desempeño a corto plazo, el nivel de rendimiento disponible sin necesidad de asumir mucho riesgo crediticio ni riesgo de duración nos hace ser optimistas respecto a los rendimientos en plazos más largos.

No hay bonos malos, solo precios malos
A lo largo del año hemos analizado extensamente el volumen de emisiones en el mercado primario de grado de inversión y sigue manteniéndose a un ritmo récord. Las nuevas emisiones presentan oportunidades para los inversores que puedan evaluar de manera adecuada la relación riesgo-recompensa. Las empresas a menudo tienen que ofrecer una “concesión” en la nueva emisión para incentivar a los inversores a comprar sus nuevos bonos. Esto se presenta en la forma de precios con descuento por diferencial en los bonos respecto a la deuda existente de la empresa, o de empresas similares adecuadas, si el emisor no tiene bonos en circulación.

Para una refinanciación directa de la deuda existente de una empresa sólida de grado de inversión, la concesión de la nueva emisión podría ser apenas de 3 a 5 puntos básicos, lo que podría ser una compensación suficiente por el riesgo. Para una emisión de deuda de gran envergadura destinada a financiar fusiones y adquisiciones, con algunas dudas sobre la credibilidad del plan de desapalancamiento o la probabilidad de que se materialicen las sinergias proyectadas, la concesión probablemente será mucho mayor. El trimestre pasado analizamos la emisión inaugural de deuda de SpaceX por 25,000 millones de dólares y su lamentable desempeño. Este trimestre, fue Paramount Skydance la que vio cómo sus bonos recién emitidos se desplomaron. En los últimos días del tercer trimestre, la empresa vendió 30,000 millones de dólares en deuda de grado de inversión, 12,400 millones de dólares en bonos basura y 9,460 millones de dólares en préstamos.ⁱ

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Según datos recopilados por Bloomberg, los inversores perdieron más de 100 millones de dólares en cuestión de horas tras completarse la operación de bonos.ⁱⁱ Desde entonces, los bonos han recuperado parte de su valor, pero la mayoría de los vencimientos sigue estando por debajo del precio al que se tasaron inicialmente. Gran parte del problema con esta operación en particular se debió a que contenía un componente de alto rendimiento y un componente de préstamo apalancado. En nuestra opinión, la parte de la operación de calificación basura y mayor riesgo no estuvo correctamente valorada, lo que provocó que la parte de grado de inversión tuviera un rendimiento inferior en consecuencia. Como gestores activos de bonos con estrategias de crédito corporativo en todo el espectro de calificaciones, estamos en una posición única para evaluar situaciones como estas. Los bancos de inversión que sindican emisiones de deuda trabajan para la empresa emisora, no para los inversores. Es responsabilidad de los inversores y fiduciarios determinar si la compensación compensa de manera adecuada el riesgo de cualquier emisión particular de bonos.

Enfoque del FOMC
Durante el trimestre, se tomaron dos decisiones del FOMC. La Reserva Federal mantuvo los tipos de interés sin cambios el 29 de julio antes de realizar una “subida de credibilidad” el 16 de septiembre. La inflación ha estado por encima del objetivo durante demasiado tiempo y Warsh anunció con anticipación la fuerte posibilidad de una subida en las semanas previas a la reunión de septiembre, lo que convirtió la decisión en una conclusión inevitable. Todavía tenemos dudas sobre la eficacia de lo que esperamos que sea un ciclo de ajuste abreviado, y nos resulta difícil imaginar un escenario en el que la Reserva Federal realice más de una o dos subidas adicionales. Si termina siendo un ciclo de tres subidas, eso eliminaría efectivamente los tres “recortes de seguridad” que la Reserva Federal implementó a finales de 2025.

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Seguimos siendo escépticos respecto a la eficacia de endurecer las condiciones financieras, ya que las tasas de política más altas afectan la demanda al aumentar el costo de obtener fondos; sin embargo, las presiones inflacionarias actuales están relacionadas con la oferta. El nivel de la tasa de política del FOMC no tiene efecto sobre la inestabilidad geopolítica ni sobre las repercusiones resultantes en los costos energéticos. Al final del tercer trimestre, el petróleo crudo West Texas había subido casi un 60 % en lo que va del año y el petróleo crudo Brent había aumentado casi un 70 %. Los precios del diésel en Estados Unidos están cerca de máximos históricos. Estos factores están completamente fuera del control de la Reserva Federal. Si Estados Unidos e Irán pueden llegar a un acuerdo, las presiones inflacionarias podrían aliviarse rápidamente. A principios de octubre, los futuros de los fondos federales indicaban una probabilidad del +19.4 % de una subida en la reunión del 28 de octubre y una probabilidad del +83.6 % en la reunión del 9 de diciembre.ⁱⁱⁱ

Se avecinan tiempos mejores
No fue un trimestre agradable desde la perspectiva del rendimiento total, pero creemos que será un pequeño contratiempo a largo plazo. La rentabilidad actualmente ofrecida por los bonos corporativos de grado de inversión y vencimiento intermedio es extremadamente atractiva en comparación con cualquier periodo reciente. Es importante destacar que estos rendimientos están disponibles sin que los inversores tengan que asumir un riesgo excesivo de duración o crédito. El mercado de crédito de grado de inversión está sano y funciona a un nivel alto. Estos factores permiten que los bonos funcionen como una herramienta eficaz en la asignación global de activos de cualquier inversor.

Agradecemos su interés y la confianza que ha depositado en nuestro equipo para gestionar sus inversiones de renta fija.

Esta información solo tiene el propósito de dar a conocer las estrategias de inversión identificadas por Cincinnati Asset Management. Las opiniones y estimaciones ofrecidas están basadas en nuestro criterio y están sujetas a cambios sin previo aviso, al igual que las declaraciones sobre las tendencias del mercado financiero, que dependen de las condiciones actuales del mercado. Este material no tiene como objetivo ser una oferta ni una solicitud para comprar, mantener ni vender instrumentos financieros. El rendimiento pasado no es garantía de resultados futuros. El rendimiento presentado antes de deducir los honorarios de asesoramiento no refleja la deducción de dichos honorarios. Nuestras tarifas de asesoramiento se detallan en el Formulario ADV Parte 2A. En general, las cuentas administradas a través de programas de firmas de corretaje incluyen tarifas adicionales. Los rendimientos se calculan mensualmente en dólares estadounidenses e incluyen la reinversión de dividendos e intereses. El Índice no es administrado y no tiene en cuenta honorarios, gastos ni costos de transacción. Los rendimientos de los índices y los datos relacionados, como los rendimientos y los diferenciales, se presentan con fines comparativos y se basan en información generalmente disponible para el público, proveniente de fuentes que se consideran confiables. No se ofrece garantía alguna respecto de su exactitud o integridad.

La información suministrada en este informe no debe considerarse una recomendación para comprar o vender ningún valor en particular. Los distintos tipos de inversiones implican distintos grados de riesgo y no puede garantizarse que cualquier inversión específica sea adecuada o rentable para la cartera de un cliente. Las inversiones de renta fija tienen distintos grados de riesgo crediticio, riesgo de tasa de interés, riesgo de incumplimiento y riesgo de prepago y extensión. En general, los precios de los bonos suben cuando las tasas de interés bajan, y viceversa. Este efecto suele ser más pronunciado en el caso de los valores a largo plazo. No existe garantía de que los valores mencionados en este informe hayan formado o formen parte de una cartera de una cuenta en el momento en que reciba este informe o que los valores vendidos no se hayan vuelto a comprar. Los valores analizados no representan la cartera completa de una cuenta y, en conjunto, pueden representar únicamente un pequeño porcentaje de las tenencias de dicha cartera. No debe suponerse que las transacciones de valores o participaciones analizadas hayan sido o resulten rentables, o que las decisiones de inversión que tomemos en el futuro serán rentables o igualarán el rendimiento de la inversión de los valores examinados en este documento. Si se lo solicita, Cincinnati Asset Management proporcionará una lista de todas las recomendaciones de inversión realizadas durante el último año.

En nuestro sitio web se encuentran disponibles las divulgaciones adicionales sobre los riesgos materiales y los posibles beneficios de invertir en bonos corporativos: https://www.cambonds.com/disclosure-statements/

ⁱ Bloomberg, 30 de septiembre de 2026, “Paramount concluye la venta de deuda por 52,000 millones de dólares para financiar la adquisición de Warner”
ⁱⁱ Bloomberg, 1 de octubre de 2026, “Los operadores de bonos arremeten contra BofA y Citi mientras la deuda de Paramount se desploma”
ⁱⁱⁱ Bloomberg, 6 de octubre de 2026, 14:42 EST, “Probabilidad mundial de la tasa de interés”

16 Oct 2026

Insight, Investment Grade Weekly Josh Adams - Portfolio Manager 0 comment

CAM Investment Grade Weekly Insights

Credit spreads were slightly wider this week while Treasury yields moved meaningfully lower. The OAS on the Corporate Index closed at 83 on Thursday October 15^th after closing the week prior at 81. The 10yr Treasury ended last week at 5.24% and it closed at 5.06% on Thursday evening. Through Thursday, the Corporate Bond Index year-to-date total return was -1.82% and the yield to maturity for the index was 5.89%.

Bond Market Weekly

Investment grade supply was just north of $20bln after Thursday’s close with a benchmark size deal pending from Bank of America on Friday morning. No official size has been announced for BAC’s 4-tranche deal; the bank printed a Friday deal in April of this year for $10bln of new bonds across four maturities. Friday deals are bit of a rare bird, and this is just the 5^th Friday investment grade deal of 2026 according to Bloomberg. Through Thursday, YTD issuance was $1.708trln. Next week, desks are looking for $20bln of issuance.

It was a week of contrast in the markets. Interest rates were volatile with multiple days of 10+ basis point swings across the Treasury curve. Equities were crushed out of the gate on Wednesday before clawing back some momentum on Thursday afternoon. High yield credit that is exposed to AI was bludgeoned while other pockets of high yield were resilient. Investment grade performed very well especially considering the move lower in Treasuries during the week. As we have written before, it has become more of a credit pickers market where bond investors are being well compensated for staying diversified across a core set of names but they will be especially well rewarded for avoiding problematic companies.

This week also saw hot readings for both CPI and PPI, which initially caused investors to price a higher probability of a policy rate hike at the FOMC’s next meeting on October 28^th. However, those views evolved throughout the week and especially on Friday morning. Federal Reserve Chairman Kevin Warsh participated in a moderated discussion Friday morning in Bangkok at the IMF’s annual meetings.[i] His comments were relatively dovish, leading investors back into the “pause” camp for the October meeting. As we go to print on Friday, interest rate futures were pricing less than a 15% probability of a hike in 12 days, but more than an 85% chance at the December 9^th meeting.

Flows

Investor demand for stable income has been consistently strong this year, even amid heightened volatility. According to LSEG Lipper, for the week ended October 14^th, short and intermediate investment-grade bond funds reported a net inflow of +1.1bln. 2026 year-to-date net flows are +$107.3bln. This is nearly double versus 2025 year-to-date.

[1] Bloomberg, October 16^th 2026, “Warsh Boosts Market Expectations of Fed Rate Hold in October”

09 Oct 2026

Insight, Investment Grade Weekly Josh Adams - Portfolio Manager 0 comment

CAM Investment Grade Weekly Insights

Credit spreads were slightly tighter this week while Treasury yields were mostly unchanged. The OAS on the Corporate Index closed at 81 on Thursday October 8^th after closing the week prior at 82. The 10yr Treasury ended last week at 5.27% and it closed at 5.23% on Thursday evening. Through Thursday, the Corporate Bond Index year-to-date total return was -2.60% and the yield to maturity for the index was 5.97%.

Bond Market Weekly

Investment grade supply finished the week at $11bln relative to dealer estimates of $25-$30bln. Interest rate volatility kept potential issuers on the sidelines in a cautious frame of mind. Syndicate desks are looking for $30bln of supply during the holiday-shortened week ahead; led by financials, as bank earnings season kicks off on Tuesday. YTD issuance now stands at $1.688 trillion.

It was a fairly light week of economic data with no market-moving releases. Interest rates were volatile again but were more subdued than the previous two weeks. The average 30-year fixed-rate mortgage rose to 7.4 percent, its highest level in three years which presents further headwinds for an already beleaguered housing market.[i] The credit markets continued to function at a high level and the spreads of most companies were tighter during the week.

Next week has much more data to parse, with CPI, retail sales, continuing claims and PPI among other releases.

Flows

According to LSEG Lipper, for the week ended October 7^th, short and intermediate investment-grade bond funds reported a net inflow of +4.96bln. 2026 year-to-date net flows are +$106.3bln.

[i] The New York Times, October 8^th 2026, “Highest Mortgage Rates in 3 Years Chill the Housing Market”

09 Oct 2026

High Yield Weekly, Insight CAM_RIA 0 comment

CAM High Yield Weekly Insights

(Bloomberg) High Yield Market Highlights

US junk bonds extended their losses for a second straight session on Thursday as yields climbed and risk premiums increased on renewed doubts over the durability and costs of AI-fueled growth. Persistent inflation concerns, stoked by elevated energy costs, added to the risk-off tone.
Yields surged to within nine basis points of their 17-month high of 8.35%, while spreads closed within striking distance of their six-month peak of 318.
The weakness cut across ratings, with CCCs bearing the brunt of the selloff. Yields on the riskiest part of the market surged to a fresh four-year high of 15.07%, while spreads widened to a distressed 1,014 basis points, the highest since March 2023
Credit has found some stability at wider levels, but rates remain the key driver for sentiment, Barclays strategists Brad Rogoff and Dominique Toublan wrote on Friday. Supply-demand technicals should improve as rates rise, and with fundamentals remaining solid for the majority of issuers, rates volatility should keep spreads in a slightly higher range, they added
A resilient economy, tight spreads and attractive yields continue to support issuance, although the pace has slowed after $14b was priced last week, and $18b the week before that
Five borrowers launched debt sales this week. Four priced for a modest $3.4b taking the month’s tally to just $4b.

(Bloomberg) US Consumer Sentiment Falls to Five-Month Low in October

- US consumer sentiment fell in early October and views of current economic conditions hit an all-time low as inflation weighed on households.
- The University of Michigan’s preliminary sentiment index decreased to 46.3, the lowest reading since May, according to the survey released Friday. That was below the median estimate of 47.6 in a Bloomberg survey of economists.
- The current conditions gauge sank to 44.7, the lowest on record, from 50.9 in the previous month. The expectations index rose to 47.3 from 46.3, the first increase since July.
- Consumer sentiment continued to worsen as gasoline prices remained elevated, borrowing costs rose and hiring slowed.
- Consumers expect prices to rise 4.7% over the next year, up slightly from 4.6% in the previous month. They also saw costs rising at an annual rate of 3.5% over the next five to 10 years, slightly more than what consumers estimated in September.
- Higher fuel prices are weighing on consumers already frustrated with persistent inflation and the rising cost of living. In recent months, overall price increases have been outpacing pay gains, further pressuring household budgets.
- Sentiment of lower-income consumers and those with smaller stock portfolios dropped steeply this month, Joanne Hsu, director of the survey, said in a statement. And increases in sentiment among Democrats and Republicans were offset by a decline among independents.
- “Despite their differences, consumers of all political identifications agree that the outlook for the economy has softened since the beginning of the year prior to the Iran conflict,’’ Hsu said.
- While consumer sentiment has been historically weak much of this year, spending has remained healthy. A stable labor market and buoyant stock market are supporting outlays on a wide range of goods and services.
- Consumers’ perception of their current financial situation held steady this month, though their view of buying conditions for durable goods fell to a record low due to concerns over higher interest rates.
- The survey period includes responses from Sept. 22 to Oct. 5.
- A special report on consumers’ response to higher gasoline prices released Friday found only about 31% expect to spend as usual over the coming year. Just over half said they would cut back spending on items such as household goods, cars, dining out and vacations.

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