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Articles by Craig Burelle
Corporate Health Outlook: Strengthening Late in the Cycle
After a year defined by rising costs and cautious optimism, our latest survey of Loomis Sayles credit analysts suggests that corporate health is regaining its footing. The results from our October CANDIs survey point to broad-based improvement across key fundamentals, including easing cost pressures, healthier balance sheets and less pressure on profit margins. While late-cycle dynamics remain visible, the data show encouraging signs of progress.
Corporate Health Outlook: Holding the Line Amid Cost Pressures
Our June 2025 survey of corporate health, quantified through Loomis Sayles’ Credit Analyst Diffusion Indices or CANDIs, reveals a corporate landscape that remains resilient, albeit under increasing pressure. Late-cycle dynamics are evident, with corporate outlooks and profit margin expectations showing modest improvement from the April survey but remaining historically subdued. While the US economy continues to expand, the pace appears to be decelerating, and uncertainty is escalating.
Cracks in the Armor of Corporate Health
After several quarters of resilience, our latest survey of Loomis Sayles’ credit analysts yielded its weakest results since it launched in 2021. Conducted amid early April’s market volatility and tariff announcements, the survey revealed a concerning shift in our credit analysts’ expectations for key corporate indicators like costs, pricing power and margins. The findings suggest a deteriorating outlook for corporate health, which has been a key underpinning of the US economic expansion.
Corporate Health: Resilience in the Face of Higher Costs
The results of our latest survey of Loomis Sayles credit analysts, known as the CANDIs, reveal a complex but encouraging backdrop for corporate health. While input costs have been rising sharply, most key corporate fundamentals remain on solid footing. In our view, this combination reflects noteworthy corporate resilience as companies grapple with late-cycle challenges and tariff uncertainty.
Macro Outlook: Sticking to the Soft Landing
To kick off 2025, Loomis Sayles will feature forward-looking views on key segments of the fixed income market. Seasoned experts with knowledge and experience in each sector will answer three questions that drill into major themes for the year ahead. Keep an eye out for each installment as the series rolls out over the next few weeks. To set the stage, we’re starting with Craig Burelle, Global Macro Strategist, Credit, and his views on the macro backdrop. We do.
Corporate Health: Stability in a Late-Stage Expansion
In our view, the corporate health outlook remains solid as we mark the third anniversary of the CANDIs survey. This quarter’s results show an improvement over last quarter’s six-month forward outlook, with corporate resilience strengthening and positive momentum broadening across more sectors. While corporate health may not be as strong as it was a year ago, we expect stability will persist, consistent with the late stage of the economic expansion.
Positive Momentum in Corporate Health Has Throttled Back
Our latest analysis of corporate health highlights a modest divergence between the positive momentum of S&P 500 Index earnings expectations and the slightly more cautious views from our team of credit analysts. Forward earnings estimates, which typically come down in the first six months of the calendar year, have held up surprisingly well for full-year 2024 and 2025 due largely to strong broad-based economic activity.
Corporate Health Restoration Remains on Track
Corporate health is looking brighter and brighter, according to Loomis Sayles’ Credit Analyst Diffusion Indices (CANDIs).[i] For the first time in several quarters, our analysts expect the aggregated corporate credit outlook to trend higher.
Macro Outlook: Rates and Profits Critical to the Path Forward
Editor’s Note: Every year, Loomis Sayles features sector outlooks across the fixed income market. We asked experts immersed in each sector three questions that drill into key themes for the year ahead. We will share their views in a series of outlooks over the next few weeks. To set the stage, we’re starting with Craig Burelle, Global Macro Strategist, Credit, and his views on the macro backdrop in 2024. 1. Financial markets seem to have priced in a soft landing for the US economy in 2024.
Macro Outlook: Rates and Profits Critical to the Path Forward
Editor’s Note: Every year, Loomis Sayles features sector outlooks across the fixed income market. We asked experts immersed in each sector three questions that drill into key themes for the year ahead. We will share their views in a series of outlooks over the next few weeks. To set the stage, we’re starting with Craig Burelle, Global Macro Strategist, Credit, and his views on the macro backdrop in 2024. Yes, we do.
Corporate Health is On the Mend, Powered by Manufacturing
We believe corporate health is on the mend. The latest results from the CANDIs,[i] proprietary diffusion indices that incorporate the views of our corporate credit analysts, indicate that aggregate corporate health is broadly improving and approaching neutral levels. Our analysts currently see positive trends in pricing power, profit margins, and their overall outlook, up from weak levels six months ago. Credit risk metrics like leverage have also improved.
Corporate Health: Signs of Improvement, but Vulnerabilities Remain Original
The results from our latest quarterly survey of Loomis Sayles’ corporate credit analysts point to some good news. In aggregate, their responses indicated leverage had moved lower, input prices continued their steady march lower, and they felt the risk of a potential crisis had leveled off. While we welcome these developments, we don’t think we have hit bottom in this credit cycle.
Corporate Health Stabilizes, but We Expect More Weakness Ahead
After falling steadily for most of the past year, our latest quarterly survey of Loomis Sayles’ credit analysts revealed that two key measures of corporate health, pricing power and margins, showed signs of stabilizing in the first quarter of 2023. Inflation ticked down as well. But we think the hints of better news should be kept in perspective. Our credit analysts, who track 28 different industries, expect further deterioration ahead in pricing power, margins and credit quality.
Corporate Health Weakens as Pricing Power Falls Sharply
A plunge in pricing power was one of the most notable developments we found in our latest quarterly survey of our credit analysts, who follow more than two dozen industries. The survey results painted a picture of a corporate sector under increasing stress but nowhere near the point of collapse. The implications of lower pricing power As we have noted in the past, when companies can’t pass rising expenses on to customers, two things tend to happen.
Why We Think Corporate Health Can Withstand an Economic Slowdown
Corporate fundamentals have been deteriorating in the US. Over the past six months we have seen meaningful erosion in profit margins, pricing power and the outlook for credit. The dropoff has been particularly steep in manufacturing industries. Our conclusion is based on work done by our analysts who closely follow the financials of more than two dozen industries as well as from our top-down macro research. The US economy has been slowing, as one might expect in the late stages of an economic cycle.
Investment Outlook
3 JANUARY 2022 Risks and uncertainty are currently on the rise. Another global wave of COVID-19 is upon us. Central banks appear to be turning hawkish in the face of persistent inflation pressure. But we still see reason to believe the global expansion will stay on track. Consumer demand remains healthy. Corporate health appears strong and we anticipate solid fundamentals and profit growth in 2022. Wage growth will likely draw participants back into the workforce, improving labor market health.
Global Growth Themes and Forecasts
Don't let increased volatility throw you off track. We believe key drivers of growth around the world remain in place. Although the pace of global acceleration has slowed a bit recently, economic indicators continue to signal levels of activity consistent with expansion. Corporate earnings estimates for the remainder of 2018 appear strong, particularly in the United States, where tax reform looks set to add to an already durable outlook. Read on for a visual snapshot of themes across the globe.
Second Quarter Investment Outlook
While the markets in the first quarter may have been roiled by a former antagonist—volatility—the outlook for the rest of the year looks solid. Global growth is projected to continue, fortified by strong corporate earnings estimates—particularly for US companies where tax cuts should boost bottom lines. But changes in US monetary policy and global trade rules are on my radar as potential risks. Here is a snapshot of my outlook.
Loomis Sayles Investment Outlook
At this point in the year, we believe developed and emerging economies should continue to drive solid global growth. Corporate earnings estimates for the remainder of 2018 look strong, particularly in the United States, where tax reform looks set to add to an already durable outlook. Potential risks we are monitoring include changes in Federal Reserve (Fed) policy as well as modifications to global trade rules.
Global Growth Themes and Forecasts
We expect a constructive global growth environment to persist into 2018. While there is potential for a temporary slowdown, a significant deviation from broadly positive trends across risk asset markets seems unlikely. How might this differ across key regions? Read on for a visual snapshot of themes across the globe.© Loomis, Sayles & Co.
Volatility Returns in a Big Way: Our Reaction
Perceived safe-haven assets that investors tend to favor during episodes of heightened volatility have not been as well bid as one might expect during such a pronounced drawdown in equities. As panic struck the US stock market, there was little evidence of a rush into less risky assets. Mixed and generally muted performance across the US dollar, gold and US Treasurys provides some evidence that systemic risk has not risen materially.
2018 Sector Teams’ Outlook: Government and Currencies
Earlier this month, the Loomis Sayles sector teams published their 2018 outlook. We will post excerpts from the outlook on LandScape over the coming weeks, beginning with government and currencies.
Global Growth Themes and Forecasts
Global growth has chugged along at a modest pace throughout 2017, and I expect more of the same heading into 2018. Read on for a visual snapshot of our key themes across the globe. This blog post is provided for informational purposes only and should not be construed as investment advice.
Investment Outlook
Long Road to Travel before Reaching “Tighter” G-3 Monetary Policy The global economy’s post-crisis economic recovery is a little over eight years old. And now, after years of monetary stimulus, the US, Europe and Japan are seeing firmer growth and inflation data, but inflation data continues to indicate price growth beneath each central bank’s target—including the Federal Reserve’s (Fed’s).
Perspectives: Fed Funds Futures vs. Wall Street
Current estimates show a significant gap between the rate expectations of Wall Street economists and the Fed funds futures markets. The spread between their estimates for December 2019 is nearly 100 basis points, the equivalent of roughly four rate hikes. Over time, this gap in expectations is going to close one way or the other.
Global Growth Themes and Forecasts
After a dip in global real economic growth last year, when a collapse in oil prices crushed the energy sector and related industries, I see global real GDP growth climbing to about 3.4% this year, leveling off through 2018. I also expect emerging market growth to outpace developed market growth this year and next, and see very few catalysts that could significantly increase the pace of global real economic growth.
Global Growth Themes and Forecasts
A synchronized pickup in global economic activity has lifted the spirits of businesses, consumers and investors worldwide. Though many equity markets are near 52-week highs and credit spreads are near multi-year lows, corporate profits are now growing again in most countries. This profit rebound, along with our expectation that global growth will continue to strengthen, could help higher-yielding credit products generate excess returns over government bonds.
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