Session recording

Dwight Scott: Fear and reality: separating the fact from the fiction in credit markets

Fear and reality: separating the fact from the fiction in credit markets

Many find the relative strength of publicly traded markets, including credit, incongruous given the scale of contraction in the real economy. Has global fiscal and monetary policy changed the expected market behaviour temporarily or structurally? What are the implications for the credit cycle and approaches to credit investing?

Speaker:
Dwight Scott, senior managing director and global head, GSO-Blackstone
Moderator: Alex Proimos, head of institutional content, Investment Magazine

Key Takeaways

  • In March we saw significant volatility and dislocation across most, if not all, the public markets, including credit, but the actions of the Federal Reserve and other central banks alongside global fiscal stimulus, resulted in a massive rally in public markets.
  • It is hard to bemoan the actions of the Fed and the amount of liquidity that they injected vis-a-vis the lost investment opportunities because the alternative would have been very unnerving and worse than the GFC.
  • Investors to be aware of the structure decline likely to play out in energy, retail and travel related industries. Preference should be to look at technology-based businesses more likely to overcome the disruption to the workplace as a result of COVID.