According to a recently released report by New York City - based research firm Real Capital Analytics (RCA), «Into the second half of 2015, the price of commercial real estate debt increased in line with turmoil
in the corporate bond markets.
Credit spreads are at record highs in the money markets and
in the corporate bond markets.
This helps state and local government issuers potentially issue bonds that are more attractive to investors which would normally be interested
in the corporate bond markets.
an increase in credit risk
in corporate bond markets, exposing investors to additional risk of loss;
The new - issue bond market is expanding (Shin (2013)-RRB- and assets under the management of investment funds that promise daily liquidity are growing rapidly - as suggested by the increasing presence of exchange - traded funds
in corporate bond markets in recent years (see also Box 2).
By contrast, in Australia there has been no noticeable widening of risk spreads
in the corporate bond market over the past year, and credit has been easily available from intermediaries, with no reports of significant changes in banks» lending attitudes.
But a further decline of less than 2 %
in the corporate bond market would represent a fresh breakdown.
This is particularly true
in the corporate bond market where credit spreads (the gap between treasury and corporate borrowing costs) have remained close to all - time lows.
We all know that the massive reduction in dealer inventories and the cost of capital has had a huge negative impact on liquidity
in the corporate bond market.
Interviews earlier this year with nearly 60 global bond investors found that more than expected - 29 % - either currently make prices
in the corporate bond market or plan ton do so in the next 12 months.
Throughout 2016, the topic that gained momentum
in the corporate bond market was the need for the buy - side to embrace price making as a strategy.
In their October 2014 paper entitled «Factor Investing
in the Corporate Bond Market», Patrick Houweling and Jeroen van Zundert develop and test a four - factor (size, low - risk, value and momentum) model of future corporate bond returns.
Two changes have taken place
in the corporate bond market in recent years.
In the corporate bond market, new deals come frequently.
Follow the credit cycle
in the corporate bond market, and you will have a good idea of where stocks are likely to go.
This can result in secondary market liquidity being significantly less for municipal bonds than bonds
in the corporate bond market.
As a value investor Sparinvest has built an investment process to capture opportunities
in the corporate bond market by value screening.
Perhaps it seems to hint that investors are now ready for the further expansion
in corporate bond market...
Driven by the deregulation of the financial system and removal of capital control, a solid growth
in corporate bond market, particularly bank bond issuance, was observed.
In the corporate bond market we have the technical term «cheap.»
The emerging markets and commodity - related sectors
in the corporate bond market should also benefit from a reflationary world.
Call risk — Some (mostly larger) BAB issues have conformed to the convention
in the corporate bond market of either requiring what is called a make - whole call premium or not having an option of being redeemable.
«Rising Oil Prices Support Modest Rally
in Corporate Bond Market,» Morningstar, 14 May 2018, http://www.morningstar.com/articles/865617/rising-oil-prices-support-modest-rally-in-corporat.html
I experienced things like
this in the corporate bond market in 2001 - 2003.
But tonight I want to take a slightly different approach than last year, daisy - chaining the overvaluations
in the corporate bond market.
Further, though spreads for GM and GMAC are not at historically tight levels, spreads
in the corporate bond market are at levels not seen since 1997.
The demand for incremental yield has started to outweigh the traditional risk / return model
in the corporate bond market, as investors have begun taking on a relatively high amount of risk for a relatively low amount of incremental yield.
«Corporate climbers» (see table below) lists a handful of bond funds that are well positioned to take advantage of a turnaround
in the corporate bond market.
Not exact matches
This is due to the fact that the reduction
in private sector held government
bond supply has been reduced which has shifted demand onto the
corporate and muni
markets.
In the short - term, however, this increased leverage may actually be bullish for junk
bonds,
corporate bonds, emerging
market debt and mortgage - backed securities as it brings higher prices and lower yields, he said.
Although it is fair to say that the recent uptick
in volatility has
in part reduced earlier concerns about prolonged low volatility and associated reach - for - yield behavior, it has placed added focus on the resilience of liquidity, particularly
in markets, such as the
market for
corporate bonds, that may be prone to gapping between liquidity demand and supply
in stressed conditions.
History shows when the benchmark rate for everything
in the economy from
corporate bond yields to mortgage rates moves by this much, this fast, the stock
market struggles
in the following months.
It used the FSR to report that traders and investors
in Canada say that it is taking longer to complete trades
in fixed - income
markets and that larger trades that used to go through easily now must be broken up into smaller bites, especially when moving
corporate bonds.
Further, a widening of U.S.
corporate bond spreads
in the last couple of months has been an impending warning for equity
markets.
Read...
Corporate Bond Market in Worst Denial since 2007
All
markets will continue to focus on the volatility
in the equity and
bond markets, geopolitical events, developments with the Trump Administration,
corporate earnings, oil prices, and will turn to this afternoon's FOMC Meeting Statement followed by reports tomorrow on UK PMI, Eurozone PPI, CPI, US Challenger Job Cuts, Productivity, Unit Labor Costs, Jobless Claims, Trade Balance, Markit Services PMI, ISM Services, Durable Goods and Factory Orders for near term direction.
Invest
in high - yield
bonds and dividend - yielding stocks, says the BofA - Merrill team, which is overweight high - grade and high - yield
corporate bonds, including financial sector names that are especially sensitive to the housing
market.
This leaves us roughly
in the same position that we started the year, slightly overweight to spread product, i.e., investment - grade and high - yield
corporate bonds and emerging
markets (more recently, we also went back to a slight overweight on commercial mortgage - backed securities).
In most other countries with which we normally like to compare our financial
markets, the
corporate sector makes greater use of
bond funding.
FLIA will invest
in fixed - and floating - rate
bonds from the full range of governmental and
corporate issuers representing developed
markets other than the U.S..
In the credit markets, both investment - grade and high - yield corporate bonds had negative returns for the first time in eight quarters, with down - in - quality subsectors in each unconventionally outperforming higher quality one
In the credit
markets, both investment - grade and high - yield
corporate bonds had negative returns for the first time
in eight quarters, with down - in - quality subsectors in each unconventionally outperforming higher quality one
in eight quarters, with down -
in - quality subsectors in each unconventionally outperforming higher quality one
in - quality subsectors
in each unconventionally outperforming higher quality one
in each unconventionally outperforming higher quality ones.
Putting all this together, the Australian
corporate bond market is relatively small
in size and is less well developed than
corporate bond markets in a number of other countries.
For example, the Vanguard Total
Bond Market ETF (ticker BND) is comprised of roughly 47 %
in government
bonds, 27 %
in corporate bonds and 26 %
in mortgage
bonds.
All
markets will continue to focus on the volatility
in the equity and
bond markets, geopolitical events, developments with the Trump Administration,
corporate earnings, oil prices, and will turn to reports tomorrow on Japanese PMI, UK PMI, US Vehicle Sales, Markit Manufacturing PMI, Construction Spending and ISM Manufacturing for near term guidance.
All
markets will continue to focus on the volatility
in the equity and
bond markets, geopolitical events, developments with the Trump Administration,
corporate earnings, oil prices, and will turn to reports tomorrow on Japan's Leading Index and Machine Tool Orders, German IFO, US Case - Shiller Home Price Index, New Home Sales, Richmond Fed and Consumer Confidence for near term guidance.
More generally, development of the
corporate bond market is simply a reflection of the ongoing process of financial innovation and development, following, with a lag, trends that have been evident
in the US for some time.
«Liquidity,»
in fact, is THE watchword now
in bond trading — ironic, considering that the U.S. central bank's primary intention has been to boost the flow of cash through financial
markets, drive a push toward riskier assets like stocks and
corporate credit, and thus generate a wealth effect that would spread through the economy.
I still think there will be a flight to safety
in sovereign
bonds when stocks have a bear
market but other areas such as high yield and
corporate debt could run into some problems.
The fund focuses on US
corporate bonds, convertible securities, foreign debt instruments (including those
in emerging
markets) and US government securities
Eisuke joined the firm
in 2006 as an analyst and has spent most of his tenure
in the Fixed Income
Markets group, raising debt and convertible
bonds for Japanese
corporate clients.