PIMCO

Today marks the launch of The Credit Market Lens – a new weekly newsletter from PIMCO. Credit markets are shaped by more than headlines. Macro forces, market structure, and investor behavior all play a role. Each Monday, Lotfi Karoui will share a data-fueled perspective on what’s driving public and private credit, and what it could mean for investors. In this week’s column: • AI-driven spending is benefiting stocks more than bonds: Equity investors are leaning into AI growth, while credit markets demand more compensation for rising leverage and uncertainty. • Not all credit is equal: Software and private-equity-backed borrowers are under more pressure, highlighting the need for careful issuer selection. • Senior structured credit remains resilient: High-quality exposures like AAA CLOs are holding up but would be tested in the unlikely event of a severe downturn. Subscribe on LinkedIn or sign up on PIMCO.com to receive it directly in your inbox.

A home is usually a person or family’s largest asset, and a mortgage is often their largest liability. That’s why the mortgage market can tell you so much about household balance sheets, and why it’s foundational to consumer credit underwriting. Group CIO Dan Ivascyn and portfolio manager Jason Steiner explain.

As equity exposure sits near historic highs and fixed income near historic lows, investors may want to reconsider where resilience comes from. High quality bonds can offer income, diversification, and downside protection—especially as global dispersion creates opportunities for active management. Learn more: https://pim.co/defbcb

We hosted our inaugural Asset-Based Finance (ABF) Symposium for a deep dive into how ABF is reshaping private credit – from macro forces to investment execution. A few themes that stood out:   -         The credit playbook is evolving: ABF spans residential mortgage, consumer finance, and real and financial assets – offering opportunities with structural downside protection and proper illiquidity compensation.   -         ABF requires a distinct approach: Unlike direct lending, ABF is collateral-first and demands significant infrastructure to underwrite the collateral and design structural protections. The opportunity set is also significantly larger at ~4x the size of the non-IG corporate credit market.   -         Origination is the moat, relative value is the edge: Broad sourcing across banks and specialty lenders enables repeatable partnerships. Excess return is driven by relationships, disciplined underwriting, and active asset management.   -         Macro and policy forces are critical underwriting inputs: Policy risk informs selectivity – particularly in consumer credit – while energy prices, as a key input to inflation, influence borrower behavior and collateral performance across ABF verticals.   We appreciate everyone who joined and for the thoughtful engagement. We look forward to continuing the momentum as we believe ABF is a compelling opportunity.

Why do bonds still look attractive despite all the uncertainty? High-quality bonds help manage risk, generate income, and diversify portfolios. Explore the full perspective: https://pim.co/3ca72a

In private credit, more frequent pricing does not always mean better pricing. Lotfi Karoui examines why limited market-based price discovery is the real challenge, and why investors should prioritize the reliability of valuations. Read Now. https://pim.co/c34154

Divergence in rate paths, yield curves, and policy frameworks creates selective opportunities across markets globally. See where we’re finding opportunities amid uncertainty at: https://pim.co/defbcb

How should investors think about liquidity and yield across public and private markets today? In uncertain markets, liquidity, transparency, and flexibility matter more than ever. Explore the full perspective: https://pim.co/3ca72a

On the latest episode of the Meb Faber Show, Marc Seidner, CIO non-traditional strategies, breaks down why fixed income may offer one of the most compelling opportunities we’ve seen in years. Here’s what stood out: · Starting yields matter: A high quality, intermediate duration fixed income portfolio can yield 7% today · Diversification beyond equities and cash looks increasingly attractive · Global opportunities, including emerging markets, are expanding the investable set Interested in how portfolios can adapt as geopolitics drives markets? Read PIMCO Perspectives: https://pim.co/12fdde

Not all inflation measures are saying the same thing right now. While CPI has softened, PCE has picked up again – and that divergence is complicating the Fed’s path forward. Economist Tiffany Wilding unpacks what’s behind it in her latest Macro Signposts. Read Now. https://pim.co/c76f4c