Wells Fargo Securities' Michael Schumacher sees year-end bond market volume dropping off earlier than usual.
According to the firm's global head of rate strategy, the slide will likely occur around Thanksgiving instead of mid-December. Not only is Wall Street still thinking about last year's painful historic stock market drop, Schumacher blames the geopolitical backdrop. He contends it's putting bond investors on edge.
"This week it's Brexit. Probably Brexit again next week. Trade after that. Hong Kong. Iran. You could go on and on and on," he told CNBC's "Schumacher said it has been a solid year for investors, so they are hesitant to push their luck with the"A lot of people, at least the ones I talk to, are saying it's been a good year," he said.
Schumacher recommends high-yield investments as a way to play the atypical backdrop and keep exposure to bonds. He'd also avoid long-duration bonds, particularly the"The best place to go is in fairly short duration credit," he said. "Maybe not the very, very front end of the curve, but call it the three-year part out to the five- to seven-year area. Decent yield. Decent carry. Not a ton of downside.