Investors should look to 'good quality corporate debt and gold' in 2023, strategist says
Corporate debt and gold could be strong options for investors in 2023, according to Michael Howell, managing director at CrossBorder Capital.
LONDON — As fundamentals hold up and tight financial conditions weigh on stock markets, corporate debt and gold could be strong investment options in 2023, according to Michael Howell, managing director at CrossBorder Capital.
A slowing economy, tightening financial conditions and rising yields might typically prompt greater stress in the corporate debt markets and a higher rate of delinquencies. But corporations have so far managed to refinance with comparative ease through the current cycle.
Howell acknowledged that things may get slightly more difficult for some areas of the market, but said that many corporations, particularly high growth companies, are in “pretty decent shape.”
“Balance sheets are good, so far revenues seem to be holding up, and they [companies] can access borrowing from the banks,” Howell said Wednesday on CNBC’s “Squawk Box Europe.”
“If you go back to 2008, remember the banks’ financing tap turned off very quickly, and that was where there was a real problem. So, this time, corporate debt markets are actually in a reasonably good shape, so that is an area that I would suggest is not a bad area for 2023.”