Howard Simons @simonsresearch
Take my December 2016 article on risky bonds and crude oil, completed at the end of July. I could say the analytic framework proved correct in the three-month trading horizon illustrated. Eurozone high-yield bonds, emerging market bonds and U.S. high-yield bonds returned 0.09%, 1.39% and 3.21% in USD terms, respectively.
The original article was written on July 28, 2016, with a three-month implied forecast horizon extending to October 25, 2016 (orange vertical line). The December issue would have been received by readers somewhere in the following two weeks, a period encompassing a global bond market selloff and a strong dollar rally affecting the USD returns of both Eurozone high-yield and emerging market bonds. U.S. high-yield returns remained positive throughout and both Eurozone and emerging market bond returns have turned higher.
Howard Simons is a long-time contributor to Futures and president of Rosewood Trading Inc.