Core Viewpoint - The company emphasizes providing actionable and clear investment ideas through independent research, aiming to help members outperform the S&P 500 and mitigate significant losses during market volatility [1] Group 1 - The service offers at least one in-depth article per week focused on investment ideas [1] - Members have reportedly achieved better performance than the S&P 500 while avoiding substantial drawdowns in both equity and bond markets [1]

JPMorgan In the $30 trillion US Treasury market, some investors see a budding buying opportunity with longer-maturity yields approaching levels rarely seen in the past two decades. The strategy, from money managers including Columbia Threadneedle Investment and Wellington Management, runs counter to the consensus wager, which is that lengthier tenors will suffer in 2026, especially compared to shorter counterparts, steepening the yield curve. Most Read from Bloomberg The contrarian approach is gaining ...

Core Insights - The article discusses three key issues in the fixed income market: yields returning to historically normal levels, the fleeting nature of chasing duration, and the expectation of a steepening yield curve in 2026 [2][8] Fixed Income Market Dynamics - Yields are expected to return to historically normal levels, impacting investment strategies [2] - Chasing duration has proven to be a temporary strategy, suggesting a need for caution in long-duration bonds [2][8] - The yield curve is anticipated to steepen, which may influence investment decisions [2][9] Horizon Analysis - A horizon analysis was conducted to assess the impact of interest rate changes on a fixed income portfolio, showing that while short-term maturities yield positive returns, longer maturities may underperform [3][7] - The analysis kept T-bill and short-term UST yields unchanged while increasing yields for longer maturities, resulting in a visibly steepening yield curve [7] Investment Recommendations - The analysis suggests avoiding extending duration and favoring ultra-short options like Treasury Floating Rates, which may provide better returns in a steepening yield curve environment [8] - Investors are encouraged to consider ultra-short to intermediate-term maturities for potential positive returns, while being cautious of longer-dated bonds due to rising back-end yields [8][9]

Market Overview - Bitcoin has shown early signs of stabilization in 2026, consolidating between $85,000 and $94,000, with a gain of over 3% in initial trading sessions as equities softened [1] - The cryptocurrency experienced a decline of 6.44% in 2025, while the S&P 500 achieved a 16.33% annual gain, indicating a divergence in performance [1] Liquidity and ETF Impact - Analysts expect liquidity conditions to improve in early 2026, making upcoming ETF flow data critical for assessing the return of institutional capital to digital assets [2] Macro Economic Conditions - The US Treasury yield curve has shifted from an inverted state to a steeper configuration, influenced by expectations of policy easing and elevated long-dated yields due to inflation uncertainty and fiscal concerns [3] - The spread between two-year and 30-year Treasuries has widened to approximately 140 basis points, while the two-to-ten-year curve has reached around 70 basis points [3] Currency Dynamics - The US dollar has weakened by roughly 9% year-to-date from January 2025 levels, reflecting policy preferences for improved trade competitiveness and a reassessment of US policy credibility [4] - Despite the dollar's depreciation, its structural foundations remain intact, supported by deep capital markets and sustained demand for Treasuries [5] Corporate Crypto Adoption - Corporate treasury-led accumulation of Bitcoin has been a dominant theme, with Strategy Inc. increasing its holdings to 673,783 BTC through an early-January purchase [6]

Market Overview - The market is experiencing a rotation away from high-flying technology stocks, with cyclical sectors such as financials, industrials, and discretionary goods benefiting from this shift [2][4][5] - The S&P 500 is down slightly over 1% month-to-date, while equal-weighted indices show positive performance, indicating a divergence in market dynamics [11] Bond Market Insights - The bond market is relatively quiet, but the steepening yield curve is a dominant trend, with expectations of potential Fed rate cuts continuing into 2026 [7][8] - Rising global yields and increasing supply due to deficits are contributing to the steepening yield curve, particularly as Japan approaches a 2% yield for the first time in decades [8] Economic Indicators - Recent labor market data indicates a softening trend, with wage growth easing, which may influence the Fed's decision on rate cuts [15][16] - Inflation remains sticky near the 3% mark, complicating the outlook for long-term yields and the potential for rapid Fed rate cuts [17][18] Technical Analysis - Current market technicals show a lack of strong trend strength, with the market consolidating around the 50-day moving average [13][14] - The volatility of bond yields is seen as a key factor that could provide a favorable backdrop for equities, potentially allowing for a rotation back into technology stocks if conditions stabilize [14]

Fund manager Devlin Capital is getting ready for further steepening in the yield curve in North America’s two largest economies as governments run large budget deficits to pay for tax cuts, military projects and other priorities https://t.co/AT84loPA9X ...

Market Overview - The concentration risk in the market, particularly among the largest stocks in the S&P 500, is raising caution among investors, indicating a potential for outsized movements in indexes due to a few mega-cap stocks driving performance [2][4] - The recent gains in mega-cap stocks are seen as justified due to strong earnings and capital expenditure numbers, but there are concerns that these gains may mask weaknesses in other market segments [4] Bond Market Insights - Expectations are set for a 25 basis point rate cut, with a low likelihood of a larger cut being signaled by the Federal Reserve [5] - The bond market is anticipated to react with yield curve steepening, reflecting a complex relationship between short and long-term rates amid inflation concerns [6][7] Housing Market Dynamics - A drop in mortgage rates is expected to positively impact housing demand, which has been sluggish due to high prices and low mobility among homeowners with favorable mortgage rates [9][12] - Housing data indicates a contraction in building permits for five consecutive months, suggesting a trendless state in housing starts and existing home sales remaining near recession levels [11][12]

Market Overview - Stocks are mostly seeing gains with the Dow roughly flat, S&P 500 up about 0.4%, and NASDAQ up about 0.7% [2][3] - The 10-year Treasury yield is down two basis points to 4.04%, while the 30-year yield is down to 4.66% [4] Sector Performance - Mega-cap stocks are leading the rally, particularly in communication services (Alphabet), consumer discretionary (Tesla), and technology (chip stocks) [5][6] - Defensive sectors are underperforming, with consumer staples down about 1% and healthcare off about 0.8% [6] Federal Reserve Insights - The Fed is widely expected to cut its benchmark interest rate by 25 basis points, with discussions on the potential for additional cuts later in the year [9][10] - Inflation is currently about 3% while job growth has weakened, raising concerns about the Fed's dual mandate [10][11] Company-Specific News - Texas Instruments shares are down about 3% due to an anti-dumping investigation launched by China targeting American semiconductor companies [49][51] - CoreWeave shares are up 8% after closing a $6.3 billion order with Nvidia, highlighting strong demand for AI infrastructure [55][56] - Union Pacific's stock is up modestly after Citigroup upgraded it to buy, citing improved clarity on its merger with Norfolk Southern [58][61] Investment Strategies - Analysts suggest that the stock market does not necessarily need a rate cut to move higher, as earnings growth remains strong [23] - There is a focus on yield curve steepeners as a favorable risk-reward trade amid expectations of further rate cuts [32]

Financial Data and Key Metrics Changes - GAAP net income for the quarter was $283.9 million, or $0.53 per diluted share, with a return on equity of 17% [18] - Earnings available for distribution were $291.1 million, or $0.54 per diluted share, reflecting an 18% return on equity [18] - Book value increased to $6.7 billion, or $12.71 per share, up from $12.39 in the prior quarter [19] - The company ended the quarter with a record cash and liquidity amount of $2.1 billion [19] Business Line Data and Key Metrics Changes - Genesis Capital achieved a record quarter of production, with origination more than doubling since its acquisition in 2022 [6][10] - NewRez, the mortgage company, reported a 38% increase in funded volume, reaching $16 billion [36] - The servicing portfolio for NewRez is now $864 billion, with a 19% return on equity for the quarter [36][25] - Rhythm Asset Management saw an increase of $3.5 billion in assets under management (AUM), totaling $36 billion [24] Market Data and Key Metrics Changes - The company noted a robust pipeline for mergers and acquisitions, focusing on scaling up credit and origination business lines [10] - The asset-based finance (ABF) market is highlighted as a key area of growth, with the company controlling both origination and servicing [7][8] Company Strategy and Development Direction - The company aims to grow its asset management platform and differentiate itself through performance and trust with investors [8][10] - There is a focus on opportunistic acquisitions and scaling up the credit business, with a desire to enter the insurance market [51][52] - The company is exploring the potential for a separate listing for NewRez but is currently focused on growing the business [45][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the macroeconomic environment, anticipating one or two rate cuts this year [26] - There is a belief that policy uncertainty is declining, which could benefit investment products [27] - The company is cautious about credit markets but sees opportunities in the non-QM space and direct lending [90] Other Important Information - The company has paid out over $6 billion in dividends since inception, implying a stock price of about $25 based on historical payouts [12] - The company is focused on maintaining a balance between funding through its balance sheet and third-party capital [95][96] Q&A Session Summary Question: Any updated thoughts on Nuurez and unlocking value? - Management indicated that they are focused on growing Nuurez and enhancing earnings before considering a separate listing [45][46] Question: How will changes in the mortgage market impact NewRez's strategy? - Management noted significant growth in the non-QM business and plans to continue expanding origination channels [60][61] Question: What are the most logical ways to optimize Rhythm's corporate structure? - Management is evaluating the merits of a C Corp structure and the need for scale in the REIT business [66][67] Question: How does the partnership at Genesis support capital allocation? - Management stated that capital can be allocated flexibly across segments to generate the best returns for shareholders [73][74] Question: What type of insurance acquisitions are being considered? - Management is looking at broader insurance opportunities, including P&C and life insurance, to complement their asset management capabilities [88][89]

Financial Data and Key Metrics Changes - In Q1 2025, the company generated distributable earnings of $25.5 million or $0.20 per share, achieving a return on equity of 6.6% with adjusted leverage of 1.4 times [4][14] - As of March 31, 2025, the company had $1.3 billion in liquidity, with 83% of its asset base unencumbered and 72% of its debt comprised of unsecured corporate bonds [6][7] - The carrying value of the securities portfolio increased by 37% from year-end to $1.5 billion, with a weighted average yield of 5.67% [19] Business Line Data and Key Metrics Changes - The loan portfolio stood at $1.7 billion, representing 38% of total assets, with a weighted average yield of 8.7% [8] - New loan originations in Q1 totaled $329 million, with 74% backed by multifamily or industrial assets [9][24] - The real estate portfolio generated $12.2 million of net operating income during the first quarter, primarily consisting of net leased properties [11][20] Market Data and Key Metrics Changes - The company noted that the current macroeconomic environment is characterized by persistent interest rate volatility and geopolitical uncertainty, impacting commercial real estate demand [12][13] - The company expects to see more attractive lending opportunities as acquisitions become more common and newly built multifamily units come off construction loans [22][23] Company Strategy and Development Direction - The company is focused on redeploying liquidity generated from loan payoffs into new loans at lower reset basis, reflecting current market conditions [5] - The strategy includes a shift towards unsecured debt as the primary funding source, aiming for potential investment-grade ratings [8][17] - The company plans to maintain a disciplined approach to capital deployment, prioritizing higher-yielding loans over securities [25][75] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating market volatility due to substantial liquidity and a robust balance sheet [6][13] - The company anticipates an increase in loan originations for the remainder of 2025, despite potential slowdowns in certain areas [39][44] - Management highlighted the importance of being well-capitalized to capitalize on opportunities that arise from market fluctuations [13][81] Other Important Information - The company repurchased $20 million in principal value of unsecured bonds during the first quarter and declared a $0.23 per share dividend [16][18] - The CECL reserve remained at $52 million, which management believes is sufficient to cover potential losses [10][19] Q&A Session Summary Question: What was the origination activity in the quarter? - The company noted that the blended spread was wide, with opportunities arising from market volatility and special situations [30][31] Question: Do you expect originations to maintain or exceed the pace generated in the first quarter? - Management expects originations to exceed the first quarter pace [39] Question: How are you thinking about the net lease portfolio longer term? - The company is open to selling properties but is not actively managing to sell; they are prepared to hold assets [45][49] Question: What is the outlook for the ten-year treasury yield? - Management anticipates the ten-year yield will rise due to the U.S. deficit, projecting it could reach around 4.75% in six months [57] Question: How do you protect against interest rate risk when adding CMBS? - The company hedges with swaps and focuses on floating rate instruments to mitigate volatility [63]