Author: Rich Balestra - Portfolio Manager

(Bloomberg)  High Yield Market Highlights

• US junk bonds are headed for weekly gains as yields dropped 18 basis points week-to-date to 8.75% as of Thursday, after 5-year and 10-year US Treasury yields sank below 4.5%, falling about 19 basis points each. Yields fell below 9% and spreads below 400 basis points since the Federal Reserve signaled, after its meeting on Nov. 1, that it was likely finished with the most aggressive rate-hike campaign in decades.
• Economic data reports this month have shown a softening labor market with a rise in jobless claims, combined with cooling inflation and an unexpected decline in prices paid to US producers, which have all reinforced market consensus that interest rates were sufficiently restrictive.
• Resilient growth combined with falling yields lured more investors into the asset class for the second consecutive week as retail funds were inundated with new cash. US high-yields funds reported a cash intake of $4.55 billion for week ended Nov. 15, after an inflow of $6.26 billion in the previous week, the third biggest on record.
• The combined inflow of more than $10b in the last two weeks is the largest two-week intake for these funds since June 2020, JPMorgan wrote.
• The US junk bond rally spanned across ratings. Robust economic data and easing rate concerns fueled November gains across all high-yield ratings.
• Junk bonds are on track for weekly gains of 0.8%, driving the month-to-date returns to 2.96%, which would be the best since January.
• BB yields tumbled 17 basis points week-to-date to 7.33%. Yields were down 66 basis points month-to-date from near 8% in October. BBs are set to post gains for the week, with week-to-date returns at 0.75%. November gains are at 3%, also the best since January.
• CCC yields have plunged 40 basis points week-to-date, the most in the high yield, to close at 13.84%. Yields tumbled 91 basis points month-to-date from near 15% in October.
• The probability of a soft landing has increased with the recent macro data driving a rally in risk assets in the past two weeks, Brad Rogoff of Barclays wrote in a Friday note.
• Cash surge and a steady rally has drawn US borrowers into the market as $4.3 billion of new junk bonds has priced week-to-date, driving the month’s volume to more than $14 billion, up 53% already from the full month of October.
• Supply is led by refinancing needs. Almost 90% of the supply is to refinance outstanding debt.
• 60% of new bonds were secured notes.
• More borrowers are expected to take advantage of lower yields and chip away at a wave of 2025 maturities.

This information is intended solely to report on investment strategies identified by Cincinnati Asset Management. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. Fixed income securities may be sensitive to prevailing interest rates. When rates rise the value generally declines. Past performance is not a guarantee of future results.

(Bloomberg)  High Yield Market Highlights

• The US junk bond primary market has been inundated with new supply after a slow October, with companies selling almost $8 billion so far this week, making it the busiest since mid-September. Monthly volume has topped $9 billion, which is already about 96% of the total for all of October.
• Investors have poured new cash into the asset class since the Federal Reserve indicated last week that it was most likely finished with the most aggressive rate hike campaign in decades. US high yield funds reported a cash haul of $6.26 billion for the week ended Nov. 8, the third biggest on record. This was the first inflow into US junk bond funds in nine weeks, according to Refinitiv Lipper data.
• A rush of borrowers came to take advantage of the current risk-on mood as yields fell 54 basis points in just seven sessions this month to 8.95%. Spreads were down 43 basis points.
• More borrowers are expected to capitalize on the broad risk-on sentiment and refinance a chunk of 2025 notes as companies steadily chip away at the so-called maturity wall of near-term debt. Companies are also repaying some term loans.
• This sudden rush of supply and a change of tone and messaging from Fed officials this week caused concerns about the possibility of another 25 basis-point increase in interest rates and a potential further delay of a possible rate cut.
• Yields rose eight basis points on Thursday to 8.95%, fueled by a 13 basis-point jump in yields for CCCs, the riskiest of junk bonds.
• US junk bonds are headed toward a modest weekly loss of 0.36% after a loss of 0.26% on Thursday, the biggest one-day loss in three weeks.
• The losses came after Fed Chair Powell cautioned that the central bank won’t hesitate to tighten policy further if needed to contain inflation.
• Federal Reserve Governor Michelle Bowman repeated that while she supported the central bank’s decision to keep rates unchanged at last week’s meeting, she still expects policymakers will need to raise interest rates more to contain inflation.
• Federal Reserve Bank of Richmond President Thomas Barkin says “the job isn’t done” to get inflation back to the central bank’s 2% target, and slower demand will likely be required to achieve that goal.

This information is intended solely to report on investment strategies identified by Cincinnati Asset Management. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. Fixed income securities may be sensitive to prevailing interest rates. When rates rise the value generally declines. Past performance is not a guarantee of future results.

(Bloomberg)  High Yield Market Highlights

• US junk bonds scored the biggest one-day gains in nine months, driving yields lower across ratings a day after Federal Reserve Chair Jerome Powell hinted the central bank may now be finished with the most aggressive tightening cycle in four decades. The Fed implied that the recent run-up in long-term Treasury yields reduced the impetus to raise rates again. 10-year Treasury yields dropped by another eight basis points to 4.66%.
• The gains in the US junk bond market spanned across ratings after US labor productivity advanced by the most in three years, softening the inflationary impact of rising wages. CCCs, the riskiest tier of the high yield market, notched the biggest one-day gains since early February. Spreads ended the six-day widening streak and narrowed 50 basis points to 925, the biggest drop in three weeks.
• Bloomberg economists led by Anna Wong reiterated that the FOMC policy statement was dovish overall in the post meeting review on Thursday. Fed officials have not interpreted the strong third-quarter growth numbers as a blowout suggesting that the Federal Reserve was inclined to go on an “ extended rate pause”.
• The Fed held interest-rates steady at 5.25%-5.5% range in the face of tightening financial and credit conditions. However, Powell’s dovish pivot based on market tightening may effectively loosen financial conditions, Barclays strategists Bradley Rogoff and Dominique Toublan wrote in a Friday note.
• Average speculative-grade yields fell 31 basis points to 9.06%, the biggest one-day drop in more than four months.
• Riskiest junk bonds yields tumbled by 49 basis points to 14.21%.
• BBs rallied to record the biggest one-day returns in almost 12 months, with gains of 1.11% on Thursday. BB yields closed at 7.54%, a five-week low.

(Bloomberg)  US Jobs Data Show Broad Cooling After Run of Surprise Strength

• US job growth slowed by more than expected and the unemployment rate rose to an almost two-year high of 3.9%, indicating that employers’ strong demand for workers is beginning to cool.
• Nonfarm payrolls increased 150,000 in October following downward revisions to the prior two months, a Bureau of Labor Statistics report showed Friday. Monthly wage growth slowed.
• The latest figures suggest some cracks are beginning to form in a jobs market that has been gradually normalizing, thanks to an improvement in labor supply over the past year and a tempering in the pace of hiring.
• The rise in the unemployment rate points to a pickup in layoffs — a development employers had so far broadly avoided. The survey of households showed a more than 200,000 increase in those who lost their job or completed a temporary one.
• As investors judged it more likely the Federal Reserve is finished with its run of interest-rate hikes, traders marked down chances of a rate increase in coming months and boosted bets on an earlier cut next year.
• Health care and social assistance, as well as government, drove the payrolls gain. Other categories, however, showed tepid growth or outright declines. Manufacturing payrolls fell by 35,000 in October, largely a reflection of the United Auto Workers union strike. The hit will prove temporary though, given union members have since struck tentative deals with the nation’s largest automakers.
• Easing demand for workers is putting downward pressure on wage growth. Average hourly earnings rose 0.2% last month and were up 4.1% from a year earlier, the smallest annual advance since mid-2021. Earnings for nonsupervisory employees, who make up the majority of workers, increased 0.3% for a second month.
• The jobs report is composed of two surveys: one of households and one of businesses. While both showed signs of weakening, the households poll was particularly concerning, due to rising unemployment, declining participation and a drop in the number of employed workers.
• The smaller gain in payrolls, combined with slower wage growth and a drop in hours worked, led a broad measure of labor market health to stagnate. Moreover, a gauge of take-home pay declined by the most since the start of 2022.

This information is intended solely to report on investment strategies identified by Cincinnati Asset Management. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. Fixed income securities may be sensitive to prevailing interest rates. When rates rise the value generally declines. Past performance is not a guarantee of future results.

(Bloomberg)  High Yield Market Highlights

• US junk bond yields rose for the second day in a row and spreads widened 11 basis points to an almost four-month high of 431, driving modest losses for the second consecutive session. Losses were tempered as 10-year Treasury yields slid from near 5% last week to 4.85% on Thursday, driving modest gains for week ended Friday.
• Sliding Treasury yields in the aftermath of stronger-than-expected growth led to modest gains for the week across the high-yield market. Yields have dropped eight basis points week-to-date, while returns sit at 0.38% for the same period.
• CCC yields, the riskiest part of the junk bond market, climbed 12 basis points on Thursday to close near 14%, a seven-month high.
• Steadily climbing yields and strong growth renewed concerns about rates staying higher for longer pushing nervous investors to pull cash out of US high yield funds.
• US high-yield funds reported outflows of $942m for week ended Oct. 25, the seventh straight week of cash exits.
• Rising yields and Treasury volatility this month kept borrowers on the sidelines.
• The month-to-date volume is a little more than $8b. The week-to-date volume is a modest $2.24b.

This information is intended solely to report on investment strategies identified by Cincinnati Asset Management. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. Fixed income securities may be sensitive to prevailing interest rates. When rates rise the value generally declines. Past performance is not a guarantee of future results.

(Bloomberg)  High Yield Market Highlights

• US junk bond yields rose for the third day in a row to an almost 12-month high of 42%, driving losses for the fourth straight session on concerns over the Middle East conflict and the potential impact of “restrictive rates” on corporate balance sheets.
• Yields rose and losses extended across the US high yield market. Junk bonds are headed toward ending the week with a loss of more than 1%. The week-to-date loss stands at 1.07%. Losses were reinforced after Federal Reserve Bank of New York President John Williams said on Wednesday that interest rates will have to stay at restrictive levels “for some time,” a day after stronger-than-expected economic reports.
• BB yields soared for the fourth day in a row to a more than three-year high of 8.13%, driving week-to-date losses to 1.11%, the most since the week ended Feb 10, after steadily falling for four sessions this week.
• Single B yields jumped to a new four-month high of 9.65%.
• CCC yields surged to near 14% — closing at 13.81% driving Thursday’s loss to 0.42%, the sixth consecutive session of losses. The week-to-date losses are at 1.15%.
• Fed Chair Powell said while the US central bank was inclined to hold interest rates steady, “decisions about additional policy firming and how long to stay restrictive will be based on totality of incoming data, evolving outlook, and the balance of risks,” signaling that the Fed was open to raising rates at least one more time should the data show strong resilience.
• Economic data this week has been pretty robust. Thursday’s jobless claims data dropped to the lowest since January.
• Economic growth projections have been revised upwards and recession odds reduced materially.
• The economy probably expanded at an annualized 3.5% rate in the third quarter, the fastest in nearly two years as economists in the latest Bloomberg monthly survey marked up their estimates for gross domestic product.
• Besides raising interest rates, the Federal Reserve is also shrinking its balance sheet, sending long term rates to their highest level. This will continue for another a couple of years, pushing rates higher, wrote Bill Dudley earlier this week.
• Rising yields, renewed concerns about “restrictive rates” after robust macro data, and the eruption of tensions in the Middle East kept US borrowers away from the market. The primary market has priced a modest $6.7b month-to-date.
• Central banks have broadly been emphasizing that rates will stay higher for longer, triggering investor worries that “something will eventually break” in credit markets, Goldman Sachs strategists including Lotfi Karoui and Ben Shumway wrote in a note.
• Higher-for-longer rates would translate to a more persistent drag on growth from tighter financial conditions. The ability of corporate borrowers to adjust to this shift without a significant uptick in financial distress remains a key concern, the strategists wrote.
• Goldman analysts revised their recommendation yesterday. They suggest investors should be underweight CCCs and overweight single Bs.

This information is intended solely to report on investment strategies identified by Cincinnati Asset Management. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. Fixed income securities may be sensitive to prevailing interest rates. When rates rise the value generally declines. Past performance is not a guarantee of future results.

(Bloomberg)  High Yield Market Highlights

• US junk bonds snapped a five-day winning streak to post the biggest one-day loss in more than a week on Thursday. Yields soared for the second straight session to 9.10% after US consumer prices climbed for a second month, bolstering speculation that the Federal Reserve may keep the doors open for another interest-rate hike this year. After a run-up in US Treasury yields since the last Fed meeting in September, the path for monetary policy seems less clear, causing junk bond yields to spike.
• Losses extended across the high-yield market. CCC- bond yields, the riskiest of junk bonds, rose 15 basis points on Thursday to 13.39%, driving a loss of 0.3%, snapping the four-day gaining streak.
• Climbing yields and steady losses turned cautious investors away from the asset class. US high yield investors pulled $2.45b out of US junk bond funds for week ended Oct. 11, the third consecutive week of outflows.
• Investors withdrew almost $7.5b in just three weeks – week ended Sept. 27, Oct. 4 and Oct. 11.
• The recent rally began after the Fed officials reiterated earlier this week that the US central bank does not need to raise interest rates as the recent surge in yields did the job. Junk bonds may rebound from these losses as the market digests the recent assurance by Fed officials.
• Federal Reserve Bank of Atlanta President Raphael Bostic reiterated earlier this week that the US central bank doesn’t need to keep raising interest rates unless inflation picks up again, or remains around its current pace.
• Federal Reserve Bank of Boston President Susan Collins said the Federal Reserve was taking a more patient approach as rates are at or near their peak.  She is the fourth Fed official to ease concerns about a further hike in interest-rates.
• The minutes of the Fed meeting in September also noted that the risks for central bank are two sided, with overtightening and inflation both presenting potential problems.
• The recent macro positive data and Federal Reserve signaling patience may keep spreads from widening further, Barclays wrote in a Friday note.
• A 9% yield in the high yield market is an attractive level, and this may prevent spreads from widening materially, Barclays added.
• The broader rebound earlier in the week lured US borrowers back to the market to take advantage of risk-on sentiment.
• The primary market priced about $2b this week, driving the year-to-date supply to $136.4b.

(Bloomberg)  Bonds Fall as CPI Boosts Fed-Hike Wagers

• The so-called core consumer price index, which excludes food and energy costs, increased 0.3% last month. From a year ago, it rose 4.1%, the lowest since 2021. Economists favor the core gauge as a better indicator of underlying inflation than the overall CPI. That measure climbed 0.4%, boosted by energy costs. Forecasters had called for a 0.3% monthly advance in both the overall and core measures.
• While swap contracts continue to anticipate a Fed pivot to rate cuts next year, that outcome was assigned somewhat lower odds.
• “Bottom line: the Fed can likely pause in November, though it’s a close call, and it remains too soon to consider cuts,” said Don Rissmiller at Strategas.
• Yet some analysts and traders don’t think the report was surprising enough to move the needle, especially after a raft of Fed officials speaking this week said the rout in bond markets may suspend the need to tighten further for now.
• Fed Governor Christopher Waller noted Wednesday the US central bank can watch and see what happens before taking further action with interest rates as financial markets tighten. Vice Chair Philip Jefferson on Monday said he would “remain cognizant of the tightening in financial conditions through higher bond yields.” And Dallas Fed President Lorie Logan indicated that if risk premiums in the bond market are on the rise, that “could do some of the work of cooling the economy for us, leaving less need for additional monetary policy tightening.”

This information is intended solely to report on investment strategies identified by Cincinnati Asset Management. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. Fixed income securities may be sensitive to prevailing interest rates. When rates rise the value generally declines. Past performance is not a guarantee of future results.

(Bloomberg)  High Yield Market Highlights

• US junk-bond issuers inundated the primary market this month, driving the supply of new securities to almost $23 billion, the most since January 2022. Seven of the 19 sessions month-to-date priced more than $2 billion, resulting in some of the busiest days since June. The flurry of new issuance partly caused yields to rise closer to 9% and spreads to near 400 basis points.
• US companies rushed to the debt markets to push off maturity payments, moving now in case the Federal Reserve’s plan to keep monetary policy tight pushes rates higher.
• Amid the flood of new supply and worries the economy could slide into a recession due to the Fed’s moves, investors pulled $2.4b from US high-yield funds during the week ended Sept 27, the most since Feb. 22.
• Yields rose and spreads widened across ratings this week.
• Oil prices have been surging, fanning fresh inflation concerns. Moreover, US consumer confidence slumped to a four-month low, a report said on Tuesday, reflecting renewed worries about a recession. Federal Reserve Chair Jerome Powell signaled last week that borrowing costs will likely stay higher for longer after one more hike this year.
• However, the primary market remained busy as companies capitalized on access to debt markets before investors get more cautious and discerning.
• While total returns have been challenging across asset classes, higher yields should support the demand backdrop for credit, Brad Rogoff and Dominique Toublan of Barclays wrote in a note to clients.

This information is intended solely to report on investment strategies identified by Cincinnati Asset Management. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. Fixed income securities may be sensitive to prevailing interest rates. When rates rise the value generally declines. Past performance is not a guarantee of future results.

(Bloomberg)  High Yield Market Highlights

• US junk bonds posted a loss of 0.5% on Thursday, the biggest one-day drop since July, as yields jumped to a roughly four-week high of 8.74% amid a decline in equities.
• The losses spanned all high yield ratings after latest data showed that initial jobless claims dropped, suggesting that a resilient labor market will reinforce the Federal Reserve’s position of keeping rates higher for longer, fueling further increases in borrowing costs in the coming months.
• The US high yield market is headed for the worst weekly loss since mid-August.
• The week-to-date losses are at 0.71%, reversing last week’s gains.
• CCCs, the riskiest part of the high yield market, were the worst performers on Thursday, with negative returns of 0.56%. CCCs are headed toward a weekly loss of 0.74%, the biggest in more than a month.
• CCC yields have surged to four-week high of 13%, rising for last five sessions.
• BB yields climbed to a 10-month high of 7.50%, after one-day loss of 0.52%.
• US borrowers rush to the market amid uncertainty about the impact of rates remaining higher for longer. The week-to-date supply is almost $16b.
• The high-yield pipeline is building up as companies try to borrow before yields rise further with the Fed’s higher-for-longer policy.
• The current environment is favorable for credit, with high yields, above-trend growth, decent credit fundamentals, and positive technicals, Brad Rogoff and Dominique Toublan at Barclays wrote this morning.
• They have revised their spread forecast for 2023 to 400-425 basis points from 475-500.
• This implies that all-in yields will remain in the high 8% area for high yield, Barclays wrote.

(Bloomberg)  Fed Leaves Rates Unchanged, Signals Another Hike This Year

• The Federal Reserve left its benchmark interest rate unchanged while signaling borrowing costs will likely stay higher for longer after one more hike this year.
• The US central bank’s policy-setting Federal Open Market Committee, in a post-meeting statement published Wednesday in Washington, repeated language saying officials will determine the “extent of additional policy firming that may be appropriate.”
• Fed Chair Jerome Powell said officials are “prepared to raise rates further if appropriate, and we intend to hold policy at a restrictive level until we’re confident that inflation is moving down sustainably toward our objective.”
• The FOMC held its target range for the federal funds rate at 5.25% to 5.5%, while updated quarterly projections showed 12 of 19 officials favored another rate hike in 2023, underscoring a desire to ensure inflation continues to decelerate.
• “We are committed to achieving and sustaining a stance of monetary policy that is sufficiently restrictive to bring inflation down to our 2% goal over time,” Powell said at a press conference following the decision.
• He emphasized the Fed will “proceed carefully” as it assesses incoming data and the evolving outlook and risks, echoing remarks he made at the Fed’s annual symposium in Jackson Hole, Wyoming last month.
• “We’re fairly close, we think, to where we need to get,” Powell said.
• Fed officials also see less easing next year than they expected in June, according to the new projections, reflecting renewed strength in the economy and labor market.
• They now expect it will be appropriate to reduce the federal funds rate to 5.1% by the end of 2024, according to their median estimate, up from 4.6% when projections were last updated in June. They see the rate falling thereafter to 3.9% at the end of 2025, and 2.9% at the end of 2026.

This information is intended solely to report on investment strategies identified by Cincinnati Asset Management. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. Fixed income securities may be sensitive to prevailing interest rates. When rates rise the value generally declines. Past performance is not a guarantee of future results.

(Bloomberg)  High Yield Market Highlights

• US junk bonds are coming off the biggest one-day gains in more than two weeks despite a surge in new debt sales, pushing the market toward a modest 0.31% gain for the week after advancing in three of the last four sessions.
• The gains lured US borrowers into the market, crowding the primary calendar and pushing the week’s supply tally to almost $10b, the most since November 2021.
• The positive returns extend across all high-yield ratings groups, with CCCs, the riskiest segment, on track to be the best performing for the week after gaining for six straight sessions. The week-to-date gains are at 0.75% vs 0.16% for BBs and 0.37% for single Bs.
• US companies are rushing to take advantage of current risk-on sentiment and stable market as they look to get ahead of any further increases in cost of debt as central banks embrace a higher-for-longer regime.
• Leveraged credit companies have capitalized on the recovery in primary markets to address the wall of maturing debt, Morgan Stanley’s analysts Vishwas Patkar, Joyce Jiang and Karen Chen wrote this morning.
• 2024 maturities across high-yield bonds and loans have dropped by 50% to about $70b, while 2025 maturities have declined by 34% to about $164b, Morgan Stanley wrote.
• Across the high-yield market, the reduction in maturities has been broad-based across ratings and sectors, whereas in loans, the B3/lower cohorts have lagged, now comprising a major share of what’s due in 2024, they wrote.
• As junk bonds recovered from last week’s losses, CCC yields dropped to a two-week low of 12.69%. Yields fell across the risk spectrum. The broader high yield index yields also fell to a two-week low of 8.48%.

(Bloomberg)  US Core CPI Picks Up, Keeping Another Fed Hike in Play This Year

• Underlying US inflation ran at a faster-than-expected monthly pace in August, leaving the door open for additional interest-rate hikes from the Federal Reserve.
• The so-called core consumer price index, which excludes food and energy costs, advanced 0.3% from July, marking the first acceleration since February, Bureau of Labor Statistics data showed Wednesday. From a year ago, it increased 4.3%, in line with estimates and marking the smallest advance in nearly two years.
• Economists favor the core gauge as a better indicator of underlying inflation than the overall CPI. That measure rose 0.6% from the prior month, the most in over a year and reflecting higher energy prices. Gasoline costs accounted for over half of the advance in the overall measure in August, according to BLS.
• The report adds to concerns that the renewed momentum in the economy is reigniting price pressures. While Fed officials have been growing more optimistic they can tame inflation without a recession, a reacceleration in price growth could force them to push interest rates even higher — with the risk of sparking a downturn in the process.
• The CPI is one of the last major reports the Fed will see before its meeting next week, in which policymakers are largely expected to hold rates steady. Chair Jerome Powell said last month interest rates will stay high and could rise even further should the economy and inflation fail to cool.
• For most Americans, household budgets are still under strain. Energy costs broadly rose, especially gasoline, which rose more than 10% last month. Utility costs also increased. Grocery prices also rose, but at the slowest annual pace in two years.
• While inflation expectations have remained stable and the job market largely resilient, Americans are growing more pessimistic about the economy. Prices, especially for essentials, are still elevated, which has forced many to rely on credit cards or savings to support spending.

This information is intended solely to report on investment strategies identified by Cincinnati Asset Management. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. Fixed income securities may be sensitive to prevailing interest rates. When rates rise the value generally declines. Past performance is not a guarantee of future results.