By Neil Shah
NEW YORK (Reuters) - Gregory Peters, chief U.S. credit strategist at Morgan Stanley, said on Monday that for the first time in his 17-year career he doesn't have any recommendations for particular bonds investors should be buying right now.
This is "the first time in my career where I don't have a list of names that I like and want to buy," Peters said at the Reuters Investment Outlook Summit in New York. "We're very cautious," he said.
Peters also said that he is wary of names in the retail sector. The "risk reward is just terrible," he said.
On the flip side, Peters advised debt investors to avoid "BBB"-rated securities, which are two steps above junk territory, and recommended "BB"-rated bonds, which are two steps below investment grade.
"You're not exposed to the same kind of event risk," he said.
Peters also said that "LBO (leveraged buyout) fears and activity is I think going to continue to weigh" on spreads. He expects "BBB"-rated bonds to widen by roughly 15 basis points over ultra-safe U.S. Treasury bonds by year-end.
(For other news from the Reuters Investment Outlook Summit, click here)
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