The Debt Ceiling Crisis Is an Opportunity

<p>As the US government debt-ceiling standoff heats up and markets grow more volatile, veteran Loomis Sayles &amp; Co. portfolio manager <a href="bbg://screens/BIO%202318007" data-web-url="" data-cke-saved-href="bbg://screens/BIO%202318007"> Elaine Stokes</a> has some advice for investors in the corporate-bond market: Get ready to buy.</p> <p>Stokes joined the <em>What Goes Up</em> podcast to discuss the opportunities the drama in Washington may create, the potential for a credit crunch stemming from regional-bank turmoil, and how high-yield bonds may not be as risky as they seem, given recession concerns.  <br><br>“The volatility that I think we’re going to have over the next couple weeks is going to be the opportunity. So take advantage of that opportunity to buy a little further out the curve, to buy low dollar-price bonds, to build in real return for a long time,” she said on the podcast. With regard to high-yield bonds, she added: “I don’t believe that this time around it’s going to be the traditional high-yield market that’s going to see the big wave of defaults. That is going to happen in either the bank-loan market or the private market. That’s where the weaker issuance has come, the lower-quality issuance. So the traditional high-yield market is actually setting up to look pretty attractive.”</p><p>See <a href="https://omnystudio.com/listener">omnystudio.com/listener</a> for privacy information.</p>