Global equity markets are rebounding on the bullish hard data and the assumption a stream of trade deals will be announced over the next few weeks. Meanwhile, high-yield market conditions continue to improve. I like the Calamos Convertible and High Income Fund (CHY), advises Bryan Perry, editor of Cash Machine.
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Professional money has concluded that current tariff rates will be dramatically reduced, and a new world trade order will unfold by year-end. Never forget the market is a forward discounting mechanism, looking out for six-to-nine months. Buyers stepped in when the “Sell America” narrative peaked, inflation and labor data came in better-than-forecast, and first-quarter earnings showed that the AI investment theme is robust.
My view is that the US economy is highly resilient, more so than any country in the world. Given its size as the world’s largest economy, accounting for 30% of global GDP, it is nothing short of exceptional to observe and to be a part of.
As for CHY, it invests in a diversified portfolio of convertible securities and high-yield corporate bonds. It recently yielded 11.8%.
High-yield assets rely on a growing economy, similar to growth stocks, but in the form of debt instruments. The dividends generated keep the cash flow coming in. But the share prices have some formidable work to do to regain their bullish technical uptrends.
See also: Why and How to Track Sovereign Wealth Funds Amid Global Power Struggles
There is no denying that the sector was hit with panic selling and massive deleveraging, so it will take some more time and more good news to retake the high ground. Based on current events and trends, investors should be highly encouraged.
Recommended Action: Buy CHY.
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