Corporate Credit Recommended for Fixed-Income Portfolios — Market Talk
1450 ET - High government bond yields, combined with resilient economic growth, calls for a fixed-income strategy that reduces duration while leaning into corporate credit, Morgan Stanley's Jim Caron says. He recommends keeping duration shorter than major benchmark indices while increasing exposure to credit, as corporate results remain robust. Caron says high-yield names with credit rating as low as BB offer stable cash flows and low default risks. "What I'm trying to reduce is the interest rate sensitivity and I'm trying to amplify the credit risk component of the portfolio," he says. Caron says tax-exempt municipal bonds are also attractive, supported by strong demand from buy-and-hold investors. ([email protected]; @ptrevisani)1420 ET - Bitcoin whales — holders of a large amount of bitcoin, usually over 1,000 BTC — are seen as increasingly buying more bitcoin, now that the market has switched to what analysts with CryptoQuant deem as "an early bull phase." The firm says that so-called whales are now holding 3.03 million BTC, which is the highest since late November 2025. Whales have been seen selling bitcoin from their holdings since September 2025, says CryptoQuant, and the switch back to buying by whales has added to an increasingly positive mood among crypto investors. Bitcoin is virtually flat in trading, at $83,045. Other major cryptocurrencies are mostly lower in afternoon trading. ([email protected])1406 ET - The average transaction price for a new vehicle in the U.S. had a small increase in September, marking the fourth consecutive month of increases and landing just below the all-time high, Kelley Blue Book says. The September average transaction price was $50,562, while the all-time record of $50,614 was set in December, the Cox Automotive brand says. The year-over-year increase in September was below 1%, while the month historically sees gains of 2% to 4%, according to Kelley Blue Book. Erin Keating, Executive Analyst, Cox Automotive, says, "Affordability pressures are pushing more buyers toward lower-priced vehicles and segments, which tempers the industrywide number even as prices for individual vehicles rise." ([email protected])1355 ET - Even as growth in Western Europe has been broadly resilient, sovereign fiscal stances and debt trajectories are diverging, Fitch Ratings says. Most sovereigns this year have experienced expenditure pressures driven primarily by energy subsidies, higher defense spending, higher interest costs and demographic-related expenditure, according to Fitch. Six euro zone sovereigns, including France, Italy and Spain, are expected to have debt ratios above 90% of GDP by the end of 2028, Fitch says, adding about half will see debt levels below 60%. Debt ratios are expected to rise in 12 euro zone sovereigns in 2026-2028, Fitch says, including in France and Germany. Debt ratios are expected to be stable or fall in nine. Fitch also says government debt-to-GDP dynamics remain the primary ratings driver. ([email protected])1344 ET - RBC Capital Markets remains on the sidelines with A&W Food Services of Canada given what it views to be a lack of obvious upside catalysts and low trading volume. The fast food chain is expected to turn in 3Q results largely in line with expectations and reiterate its guidance for the fiscal year, analyst Logan Reich says. Reich says the macro backdrop is largely consistent with the prior quarter, though there is some potential for consumer softening given prolonged high energy prices. Competition remains intense and traffic across burger chains continues to be driven by value offerings, with promotional activity likely to intensify over the next few quarters. RBC has a sector perform call and C$40 target on the stock, which is now down 0.3% at C$36. ([email protected])1343 ET - Apple's latest tech rollout is a shift from its focus on mobile products to technology that is anchored to customers' homes. Its biggest launch is the HomeView, an iPad-like product with a stand and new AI and voice features. The HomeView connects to a suite of other new home products, including smart thermostats, a video doorbell and door lock, and indoor and outdoor cameras, Apple says. The accessories are designed to work together and users can control every product with Siri voice commands. Users can also set up the devices to recognize key moments throughout the day, like someone leaving for work, and automatically adjust temperature, door locks and cameras, according to Apple. ([email protected])1326 ET [Dow Jones]--Companies and governments need to do more to ensure artificial intelligence is safe, Brad Smith, president of Microsoft, says in Dublin on Tuesday. "I do think we've reached a point where we obviously need companies in the industry to step up and do more to address AI safety issues, but more than that I think we've reached a time when we're going to need governments to do more as well," he says. His comments come after a BBC interview where he spoke about so-called safety breaks for AI systems controlling critical infrastructure or automated systems and said that washing machines are subject to more rules than AI. He also says work must be done to spread the benefits of AI more broadly. ([email protected])1327 ET - Apple's new HomeView features a new AI version of Siri that the company says is more capable and conversational. The virtual assistant has personal context understanding and onscreen awareness, Apple says. That is combined with new access to personal information, including text messages, as well as the ability to take action across apps such as messages and calendar. The conversations are synced across a users' iCloud, so they can pick up the conversation on any of their Apple devices, the company says. ([email protected])1316 ET - Google is rolling out its latest AI model, Gemini 4 Argon, as it continues to race with other frontier AI labs to develop increasingly capable models. The company announced Argon late last month, but said it was limiting early access to "trusted cyber defenders" due to the model's capabilities. Now, Argon, which Google says outperforms other frontier models on many benchmarks, is available for developers, enterprises, and some paid subscribers, priced at $2 per million input tokens and $10 per million output tokens. The release comes one day after Meta Platforms released its own set of foundation models it said were at the AI frontier. ([email protected])1205 ET - Consumer economic pressure weighed on Domino's average tickets during the third quarter, CFO Sandeep Reddy tells investors on a call. "While our ticket trend improved from the second quarter, it was impacted by a sequential decline in items per order in both our carryout and first-party delivery business," Reddy says. "We believe this was due to the challenging consumer environment." The lower average ticket weighed on same-store sales growth in the U.S., which slowed to 0.3% during the third quarter from 5.2% a year prior. Domino's now expects full-year U.S. same-store sales growth at the low end of low-single digits, assuming that macroeconomic conditions continue through the year. ([email protected])1202 ET - Domino's Pizza CEO Joe Jordan says the pizza chain is experiencing strong demand even as the macroeconomic environment puts strain on consumer budgets "Consumers remain under pressure, but they continue to choose Domino's," Jordan says on a call with investors. "Looking ahead to the remainder of 2026, we expect the macro environment to remain an overhang on the consumer through the balance of the year. However, we have a strong calendar for the fourth quarter and believe we are well-positioned to compete." Shares fall 3.4%. ([email protected])1121 ET - Jeremy Barnum, finance chief of JPMorgan Chase, says people are worried about others, while feeling fine themselves. "We run these surveys and they're always like, 'Oh, I'm worried about this. I'm worried about that,'" he says on a call with analysts. But when asked how they're feeling themselves, most people respond that they're doing great. "It's kind of an interesting dynamic there," Barnum says. Still, there's no question that higher interest rates and sticky inflation are putting pressure on middle-market clients. "We see them trying to manage that to the best of their ability, and I think it does create a little bit of caution in that space," Barnum says. "But I think balance sheets are strong, people have been through a lot over the last few years and so they're well prepared." ([email protected])