Category: Insight

Fund Flows & Issuance:  According to a Wells Fargo report, flows week to date were -$1.9 billion and year to date flows stand at -$12.6 billion.  New issuance for the week was nil and year to date issuance is at $38.5 billion.

(Bloomberg)  High Yield Market Highlights

• The turmoil in the US regional banking industry and the near-collapse of the Swiss bank Credit Suisse Group AG caused investors to spurn risk and pull funds out of the asset class. CCCs, the riskiest segment of the US junk bond market, were headed toward the biggest weekly loss since September of last year. The week-to-date losses in CCCs stood at 1.76% as spreads moved to the distress zone and closed at +1,014bps.  The upheaval caused by fears of contagion in the banking sector and renewed concerns about Fed rate decisions in the upcoming meeting brought the primary market to a screeching halt.
• The consumer price index, excluding food and energy, increased 0.5% last month according to a report on Tuesday. That’s the most in five months, forcing the Fed to consider pressing its inflation fight even while mending the regional banking industry.
• Moody’s expects the Federal Reserve to raise the federal funds rate by 25bps at its March 22 meeting, Madhavi Bokil wrote on Wednesday.
• “Broader tightening of bank lending conditions will factor into decisions as to how high the rate should go to bring down inflation,” she wrote.
• The tumult with Credit Suisse seems to have stopped on Thursday, after the firm opened a 50 billion Swiss franc ($54 billion) credit line with the Swiss National Bank.
• But Credit Suisse came soon after the collapse of regional US lenders including Silicon Valley Bank late last week and Signature Bank this week fueling concerns about financial stability.
• Yields surged to 9% for the first time this year, and spreads breached the +500 level for the first time since October but calmed down after interventions and closed at 8.93% and +485bps, respectively.
• Junk bonds rebounded across the board on Thursday. The broader high yield index posted modest gains 0.41%. But it is headed toward second straight week of losses. The week-to-date losses are 0.28%.
• Elevated volatility, continuing uncertainty about economic growth, concerns about sticky inflation and the pace of rate hikes have kept junk bond borrowers on the sidelines.

(Bloomberg)  Dash for Cash by Banks Fuels Signs of Tension in Funding Markets

• There are some signs of increased pressure within US dollar funding markets as fears grow around the outlook for the banks and the turmoil drives lenders to shore up their own cash buffers.
• With global financial markets reeling in the wake of Silicon Valley Bank’s bank-run-fueled failure last week, worries about the future of Credit Suisse Group AG have amped up global concern. That sent short-end debt-market rates plummeting again Wednesday as investors radically shifted their outlook for central bank policy and flocked to haven assets.
• Dollars continue to flow through the pipes of the interbank lending system, but there are indications that the cost of funding is ticking up and that institutions are taking the precaution of building up their cash piles.
• Rates on overnight repurchase agreements moved higher for a period on Wednesday, pointing to stronger demand and general jitteriness. And a number of other market indicators, including the gap between forward-rate agreements and overnight index swaps, are also indicating heightened tension. Activity around the Federal Home Loan Banks system in recent days is suggestive of banks looking to ensure they have enough cash.
• Here are some of the funding-market indicators to look at for signs of pressure.
• The rate on repurchase agreements for US dollars, a key funding market, moved higher Wednesday. The general collateral overnight repo rate first traded with a bid-ask spread of 4.67%/4.66%, according to ICAP. That compares with around 4.45% at the end of Tuesday.
• “If we do start to see a broad based increase in repo rates that will get the market and perhaps the Fed more concerned about the overall health of the banking system,” BMO Capital Markets Strategist Ian Lyngen said in a phone interview.
• The gap between direct forward-rate agreements and index-tied ones — often used as a measure of the difficulty banks have in getting access to funds — has swelled. It this week moved to levels last seen around the early stages of the Covid pandemic in 2020.
• The Federal Home Loan Banks system, which provides funding to commercial banks and other members via so-called advances, has been increasing the amount of funds it has on hand, suggesting that it has seen a dramatic uptick in demand for dollars. In an unusual move, the FHLBs on Monday raised an unprecedented $88.7 billion through floating-rate notes, followed by another $19 billion on Tuesday. It has also raised some $22.87 billion via term discount notes and has overnight funding on top of that, which reached $67.55 billion on Monday.
• The total amount of advances to members, which is published quarterly, had already more than doubled to $819 billion last year as increased Fed interest rates helped put pressure on deposits and this latest episode may push them higher still.
• Another sign of the FHLBs needing to filter more money to its members is in its apparent pullback from the fed funds market. It’s the biggest player in that market, a place it tends to park its extra cash, so a pullback in fed funds activity — as has been witnessed this week — is indicative of the FHLBs channeling more money to other places.
• One area that market participants will be keeping a keen eye on is the usage of various official backstop facilities from the Fed. This past weekend saw US authorities introduce a new backstop for banks, the Bank Term Funding Program. Borrowing from the emergency bank facility will be disclosed each Thursday in the Fed’s regular balance sheet update, but individual borrowers won’t be named for two years.

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.

Fund Flows & Issuance:  According to a Wells Fargo report, flows week to date were -$2.1 billion and year to date flows stand at -$10.4 billion.  New issuance for the week was $6.9 billion and year to date issuance is at $37.9 billion.

(Bloomberg)  High Yield Market Highlights

• US junk bonds dropped heading into the end of the week, eroding earlier gains, as anxious investors pulled cash out for the third week in a row.  The losses reached across ratings after data showed a strong jobs market and manufacturing shrinking less than expected, renewing concerns about inflation and more restrictive monetary policy.
• Strong economic data led Fed officials to again reiterate that the central bank may have to raise interest rates by more than previously expected.
• Price pressures remain firm, disrupting the dis-inflationary narrative, Brad Rogoff and Dominique Toublan from Barclays wrote on Friday. The market may be capitulating toward a higher terminal rate, but elevated yields and a lack of near-term catalysts for material de-risking should keep spreads range-bound in the medium term, they wrote.
• US junk bond yields rose for the second day in a row Thursday to close 8.72%.

(Bloomberg)  Fed Officials Warn They May Need to Lift Rates to a Higher Peak

• Two Federal Reserve policymakers cautioned that recent stronger-than-expected readings on the US economy could push them to raise interest rates by more than previously expected.
• In remarks Thursday, Governor Christopher Waller said that if payroll and inflation data cool after hot prints in January, “then I would endorse raising the target range for the federal funds rate a couple more times, to a projected terminal rate between 5.1% and 5.4%.”
• “On the other hand, if those data reports continue to come in too hot, the policy target range will have to be raised this year even more to ensure that we do not lose the momentum that was in place before the data for January were released,” Waller said in remarks prepared for delivery at an event hosted by the Mid-Size Bank Coalition of America.
• Waller’s speech followed comments by Atlanta Fed President Raphael Bostic, who told reporters that he still favored raising rates by 25 basis points in March but was open to lifting borrowing costs higher than he had envisioned if the economy remained so robust.
• “I want to be completely clear: There is a case to be made that we need to go higher,” Bostic said. “Jobs have come in stronger than we expected. Inflation is remaining stubborn at elevated levels. Consumer spending is strong. Labor markets remain quite tight.”
• Officials next meet March 21-22, and by then they will have seen fresh reports on employment and inflation. Recent incoming data has been surprisingly strong: Employers added 517,000 new workers in January while inflation remains well above the central bank’s 2% target.
• Waller said the payroll report, together with a decline in the unemployment rate in January to 3.4%, showed “that, instead of loosening, the labor market was tightening.”
• Fed officials are discussing their evolving outlook, which may include holding the policy rate higher for longer than they expected when they published their last forecast in December.
• Fed Chair Jerome Powell will have a chance to update lawmakers on the outlook when he heads to Capitol Hill next week to deliver his semi-annual testimony to Congress. He appears before the Senate Banking Committee on Tuesday and the House Financial Services Committee Wednesday.

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.

Fund Flows & Issuance:  According to a Wells Fargo report, flows week to date were -$6.5 billion and year to date flows stand at -$8.3 billion.  New issuance for the week was nil and year to date issuance is at $31.0 billion.

(Bloomberg)  High Yield Market Highlights

• US junk bonds are headed toward the biggest monthly loss since September as investors pull back on renewed speculation that the Federal Reserve will hold interest rates high all year to drag down inflation. US junk bond investors pulled more than $6 billion from US high-yield funds for week, the third biggest weekly withdrawal on record and the second straight outflow. Yields are up by 51bps this month to 8.65%, the biggest jump since September.
• The moves reverse what had been a strong start to the year and were spurred as a series of Fed officials lined up day after day to reiterate that interest rates need to move higher for longer than the market was pricing in at the start of the year.
• But the market’s downturn paused on Thursday, when yields dropped the most in three weeks and the junk bond index posted the biggest one-day gains in three weeks, with returns of 0.58%.
• That came after the FOMC minutes from the February meeting signaled that central bank policy makers aren’t likely to step up the pace of its hikes.

(Bloomberg)  Fed Inclined Toward More Hikes to Curb Inflation, Minutes Show

• Federal Reserve officials continued to anticipate further increases in borrowing costs would be necessary to bring inflation down to their 2% target when they met earlier this month, though almost all supported a step down in the pace of hikes.
• “Participants observed that a restrictive policy stance would need to be maintained until the incoming data provided confidence that inflation was on a sustained downward path to 2%, which was likely to take some time,” according to the minutes of the Jan. 31-Feb. 1 gathering released in Washington on Wednesday.
• The minutes also said “almost all” officials agreed it was appropriate to raise interest rates by 25 basis points at the meeting, while “a few” favored or could have supported a bigger 50 basis-point hike.
• US central bankers raised interest rates by a quarter-point, moderating their action after a half-point hike in December and four consecutive jumbo-sized 75 basis-point increases. The move lifted the benchmark policy rate into a range of 4.5% to 4.75%. Both Chair Jerome Powell and the minutes indicated that officials are prepared to raise rates further to produce a broader slowdown in the economy that tamps down inflation.
• “Participants generally noted that upside risks to the inflation outlook remained a key factor shaping the policy outlook, and that maintaining a restrictive policy stance until inflation is clearly on a path toward 2% is appropriate from a risk-management perspective,” the minutes said. A number of officials said that an “insufficiently restrictive” policy stance could stall recent progress on moderating inflation pressures, according to the minutes.
• Following the release of the minutes, swaps traders kept steady their conviction that the Fed will keep pushing rates higher, with the market indicating that 25 basis-point hikes are likely coming at the March, May and June meetings. Investors lifted expectations for where rates will peak to around 5.36%.

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.

Fund Flows & Issuance:  According to a Wells Fargo report, flows week to date were -$3.0 billion and year to date flows stand at -$1.8 billion.  New issuance for the week was $3.5 billion and year to date issuance is at $31.0 billion.

(Bloomberg)  High Yield Market Highlights

• US junk bonds are headed toward their second consecutive week of losses after declining in nine of the last 12 sessions. The losses spanned across all high yield ratings on worries strong data – including retail sales and rising consumer prices – will keep the Federal Reserve on the path of tight monetary policy for longer than previously expected. The January gains faded after a series of Federal Reserve officials said that interest rates may need to move to a higher level than anticipated. Federal Reserve Bank of Cleveland President Loretta Mester joined the chorus on Thursday saying there was a compelling case for rolling out another 50 basis-point interest-rate hike.
• “At this juncture, the incoming data have not changed my view that we will need to bring the fed funds rate above 5% and hold it there for some time,” she said in remarks prepared for an event organized by the Global Interdependence Center and the University of South Florida Sarasota-Manatee.
• Federal Reserve Bank of St. Louis President James Bullard said he would not rule out supporting a half-percentage-point interest-rate hike at the Fed’s March meeting, rather than the quarter-point other officials have signaled may be appropriate.
• He said he wanted to bring the Fed’s policy rate up to 5.375% as soon as possible.
• Mester and Bullard follow a long line of Fed speakers this week – Thomas Barkin, Dallas Fed President Lorie Logan and Philadelphia Fed President Patrick Harker – echoing similar views.
• Junk bond yields surged to a six-week high of 8.54% and are on track to rise for the second straight week this month as investors pulled cash out of US high yield funds.
• While the broad junk bond rally has lost momentum, CCCs continue to be the best asset class in US fixed income, with year-to-date gains of 6.1% compared with investment grade returns of 1.3%.
• As the broader rally wanes, BB yields jumped to a six-week high of 7.10%.

(Bloomberg)  US Inflation Stays Elevated, Adding Pressure for More Fed Hikes

• US consumer prices rose briskly at the start of the year, a sign of persistent inflationary pressures that could push the Federal Reserve to raise interest rates even higher than previously expected.
• The overall consumer price index climbed 0.5% in January, the most in three months and bolstered by energy and shelter costs, according to data out Tuesday from the Bureau of Labor Statistics. The measure was up 6.4% from a year earlier.
• Excluding food and energy, the so-called core CPI advanced 0.4% last month and was up 5.6% from a year earlier. Economists see the gauge as a better indicator of underlying inflation than the headline measure.
• The median estimates in a Bloomberg survey of economists called for a 0.5% monthly advance in the CPI and a 0.4% gain in the core measure.
• Both annual measures came in higher than expected and showed a much slower deceleration than in recent months.
• The figures, when paired with January’s blowout jobs report and signs of enduring consumer resilience, underscore the durability of the economy — and price pressures — despite aggressive Fed policy. The data support officials’ recent assertions that they need to hike rates further and keep them elevated for some time, and possibly to a higher peak level than previously expected.
• The path to stable prices will likely be both long and bumpy. The goods disinflation that has driven the slide in overall inflation in recent months appears to be losing steam, and the strength of the labor market continues to pose upside risks to wage growth and service prices.
• The details of the report showed shelter was “by far” the largest contributor to the monthly advance, accounting for almost half of the rise. Used car prices — a key driver of disinflation in recent months — fell for a seventh month. Energy prices rose for the first time in three months.
• Shelter costs, which are the biggest services component and make up about a third of the overall CPI index, rose 0.7% last month. Owners’ equivalent rent and rent of primary residence increased by the same amount, while hotel stays also climbed.
• Because of the way the housing metrics are calculated, there’s a significant lag between real-time price changes and the government statistics.
• The January report incorporated new weights for the consumer basket to try to more accurately capture Americans’ spending habits. The shelter components are now a larger share of the overall index while used cars make up a smaller portion.
• Americans have been shifting more of their spending toward services, and the Fed — particularly Chair Jerome Powell — closely looks at those excluding energy and shelter as a sign of more durable inflation.
• So-called core services ex-housing rose 0.3%, a slight easing from the prior month, according to Bloomberg calculations. Wages are thought to be a key driver of growth in this category.
• While a strong jobs market has underpinned wage growth in recent months, inflation eroded those gains at the start of the year. A separate report Tuesday showed inflation-adjusted average hourly earnings fell 0.2% from the prior month, the biggest drop since June. Pay is down 1.8% from a year earlier.
• Economists largely expect the CPI to fall rather sharply by the end of 2023, but forecasters are split as to whether such a decline can occur without tipping the economy into recession. Much of that hinges on just how far the Fed will go. Policymakers will have February’s CPI and jobs report in hand before they meet next month.

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.

Fund Flows & Issuance:  According to a Wells Fargo report, flows week to date were $0.02 billion and year to date flows stand at $0.8 billion.  New issuance for the week was $7.0 billion and year to date issuance is at $27.5 billion.

(Bloomberg)  High Yield Market Highlights

• US junk bonds are headed toward their biggest weekly loss in more than three months following losses for five sessions in a row, the longest losing streak since August. The week-to-date losses are at 1.01%, the most since November 4th. Yields jumped 26bps week-to-date to 8.14% after rising for five straight sessions, the longest rising streak since December. The losses extended across ratings snapping the two-week gains and ending the strongest start to a year since 2019. The sudden reversal after gaining four of the last six weeks this year came after payrolls data last Friday showed a strong jobs market, quashing hopes of the Federal Reserve pausing interest-rate hikes.
• The losses accelerated this week as a series of Fed officials reiterated their concerns about steady and stubborn inflation and the economic trajectory.
• “We need to attain a sufficiently restrictive stance of policy,” New York Fed President John Williams told a Wall Street Journal live event in New York.
• Minneapolis Fed President Neel Kashkari, an FOMC voter this year, echoed similar views at the Boston Economic Club saying rates need to be higher to combat wage growth.
• Better-than- expected macro data have called into question the “peak rates” narrative, which has been a key driver of the risk asset rally, Barclays’ Bradley Rogoff and Dominique Toublan wrote on Friday.
• Aside from Fed officials implying policy could become even more restrictive, the Fed’s Senior Loan Officer Opinion Survey (SLOOS) revealed a further tightening in bank lending conditions, and similar levels in the past have corresponded to higher forward default rates, Rogoff wrote in note.
• Even as concerns about inflation, slowing growth and Fed’s restrictive stance emerged, the primary market was open for business.
• 90% of the borrowers were just refinancing debt maturing this year or next. There was no aggressive use of proceeds such as dividend payment or funding LBOs.
• CCC yields jumped 31bps week-to-date to 12.64%, the first weekly increase this year, after rising for five consecutive sessions, the longest rising stretch since early November. CCC yields will end the five-week declining streak.
• CCCs are on track to end the week with losses. The week-to-date loss is as 0.66%.
• BB yields rose to a five-week high of 6.71% after advancing for five days in a row, the longest rising streak since September.

(Bloomberg)  Powell Says Further Rate Hikes Needed and Bonds Take Heed

• Federal Reserve Chair Jerome Powell stuck to his message that interest rates need to keep rising to quash inflation and this time, the bond market listened.
• In particular, Powell floated the idea during an event in Washington on Tuesday that borrowing costs may reach a higher peak than traders and policymakers anticipate.
• The talk was Powell’s first since last Wednesday, following the Fed’s decision to raise rates by a quarter point, when markets shook off his warning that rates were headed up and rallied anyway. The chair offered similar words again but, in the aftermath of a red-hot January employment report, they hit home harder.
• “We think we are going to need to do further rate increases,” Powell told David Rubenstein during a question-and-answer session at the Economic Club of Washington. “The labor market is extraordinarily strong.”
• If the job situation remains very hot, “it may well be the case that we have to do more,” he said.
• Much stronger than expected US government data on Friday showed employers added 517,000 new workers in January while unemployment fell to 3.4%, the lowest rate since 1969. Powell said the report “shows you why we think this will be a process that takes a significant period of time.”
• Bonds sold off after an initial rally as the Fed chair opened the door to a higher peak rate in 2023 if the job market doesn’t start cooling.
• His remarks suggest that the 5.1% interest-rate peak forecast by officials in December, according to their median projection, is a soft ceiling. Powell sounded willing to follow the data and move higher if necessary.
• The Federal Open Market Committee lifted its benchmark rate by a quarter percentage point to a range of 4.5% to 4.75% last week. The smaller move followed a half-point increase in December and four jumbo-sized 75 basis-point hikes prior to that.

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.

Fund Flows & Issuance:  According to a Wells Fargo report, flows week to date were -$0.1 billion and year to date flows stand at $0.8 billion.  New issuance for the week was $5.5 billion and year to date issuance is at $20.4 billion.

(Bloomberg)  High Yield Market Highlights

• US junk bonds rallied for the third straight session Thursday, posting their biggest one-day gain in three months, with returns of 1.18%, after Federal Reserve Chair Jerome Powell said that the process of disinflation has begun. Yields plunged to a more than five-month low of 7.73%, tumbling 30bps in their largest one-day drop in 12 weeks. Spreads tightened by the most in four months to close at a nine-month low of +386bps. The gains spanned across all high yield ratings on expectations that the Federal Reserve may be nearing the end of the tightening cycle. CCCs, the riskiest segment of junk bond market, posted the biggest one-day gains in more than two years, with returns of 1.52%. Yields plummeted to an eight-month low of 12.19%.
• Risk assets rallied on a higher probability of a soft landing, Barclays’ Brad Rogoff wrote on Friday
• The junk bond market is on track for its second consecutive week of gains, with week-to- date returns of 1.5%. The week-to-date returns for CCCs are at 2.23%, making them the best performing asset class within high yield
• The rally was fueled by Powell’s signaling that the bank was open to adjusting its rate hike plans if inflation fell faster than expected, implying that the Fed is flexible and would consider stopping rate hikes altogether
• Yields tumbled across ratings, with BB yields falling to a five-month low of 6.27% and spreads at a 10-month low of +240bps
• BBs also posted the biggest one-day returns in three months, with 1.08%
• Single B yields fell 33bps to 7.88%, the lowest since mid-August of last year. The index gained 1.22%, the largest one-day return since Nov. 10
• The primary market is expected to see a steady flow of new issuance after a relatively busy January.

(Bloomberg)  Fed Slows Rate Hikes Even as Powell Says There’s More Work to Do

• Federal Reserve Chair Jerome Powell said policymakers expect to deliver a “couple” more interest-rate increases before putting their aggressive tightening campaign on hold, even as they slowed their drive to curb inflation.
• Powell and his colleagues lifted the Fed’s target for its benchmark rate by a quarter percentage point to a range of 4.5% to 4.75%. The smaller move followed a half-point increase in December and four jumbo-sized 75 basis-point hikes prior to that.
• Still, investors took heart from the chair’s remarks acknowledging that price pressures have started to ease,despite his emphasis on the Fed’s outlook for more rate hikes.
• “We think we’ve covered a lot of ground,” Powell told reporters after the meeting. “Even so, we have more work to do.”
• The vote by the Federal Open Market Committee was unanimous.
• “The committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time,” the Fed said in a statement issued after the two-day policymaking meeting, repeating language it has used in previous communications.
• In a sign that the end of the hiking cycle may be in sight, the committee said the “extent of future increases” in rates will depend on a number of factors including cumulative tightening of monetary policy. It had previously tied the “pace” of future increases to those factors.
• Powell, during his press conference, added to that sense.
• “We’ve raised rates four and a half percentage points, and we’re talking about a couple of more rate hikes to get to that level we think is appropriately restrictive,” he said.
• In another shift from its last statement, the Fed noted that inflation “has eased somewhat but remains elevated,” suggesting policymakers are growing more confident that price pressures have peaked.
• That compares with prior language where officials simply stated price growth was “elevated.”
• Investors wanted to know if Powell would push back against market expectations that the Fed will cut rates later in the year as inflation eases and economic growth slows. He did.
• “Restoring price stability will likely require maintaining a restrictive stance for some time,” he told reporters. While recent readings on price pressures were encouraging, he added that “I just don’t see us cutting rates this year,” if the economy evolves as he and his colleagues expect.

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.