ING

Christine Hurtsellers, CIO Fixed Income; Mike Mata, Head of Multi-Sector Fixed Income; Matt Toms, Head of U.S. Public Fixed Income

Let it not be forgotten at the start of a new year that significant downside risks to the global economy remain. We expect global growth to be modestly positive, led by emerging markets, with the greatest drag on growth coming from the highly indebted developed economies.

Christine Hurtsellers, CIO Fixed Income

We retain our constructive strategic outlook for most risk sectors. We believe market fears and the flight to Treasuries, while logical, have pushed spread sectors, such as high yield credit, to attractive spreads. Credit fundamentals remain fairly strong and current valuations are priced to anemic growth or recessionary levels. One of our favorite sectors is Emerging Markets sovereign debt. Also, fundamentals remain strong for Emerging Market sovereigns. If troubles in the Eurozone begin to subside, the sector is poised to rally.

Douglas Coté, CFA, SVP & Chief Market Strategist

Typically, the “January Effect” drives equity markets explosively up, but then they fizzle out after two weeks. January 2012 was different, as equities delivered four weeks of moderate but relentlessly positive returns as global risks eased thanks to the efforts of the ECB and Federal Reserve.

Jeff Boundy, Portfolio Manager; Toby Tolino, Portfolio Manager

Memo to the current administration: You’re sending us some mixed messages. The proposal for tax reform, which would include a reduced cap on tax-exempt interest for municipal bonds, has shown up in various forms over the past several months.

Rick Kilbride, Head of Fixed Income for Managed Accounts

F.I.R.S.T.: Fixed income had a great January as credit tightened and interest rates remained stable. But we still seek resolution to many substantial concerns.

Equity markets were mixed on the week, as investors digested slow progress toward a new Greek debt deal as well as a heavy earnings and economics calendar. The S&P 500 and tech-heavy Nasdaq extended their winning streaks, albeit barely, while the DJIA posted its first weekly loss of 2012.

Jeff Bakalar, Senior Vice President and Group Head of the ING Senior Loan Group

Loans continued to gain ground over the past seven days, aided by more of the same technical environment where primary issuance continues to lag.