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The Star
5 days ago
- Business
- The Star
Bond bears return as long-term yields surge past 5%
In JPMorgan Chase & Co's latest Treasury client survey, investors' net long positioning shrank to the smallest in six weeks. — Bloomberg WASHINGTON: A bearish tone is taking hold in the Treasury market amid worries over the risk of tariff-fuelled inflation and increased government spending in some of the world's biggest economies. In JPMorgan Chase & Co's latest Treasury client survey, investors' net long positioning shrank to the smallest in six weeks. That coincides with selling pressure in US government debt, which picked up on Tuesday after June consumer price data failed to assuage concerns over the impact of trade levies. In response, investors trimmed bets the Federal Reserve will cut interest rates as soon as September. The 30-year Treasury yield climbed above 5% for the first time since early June, and there were large flows seen in options bets costing a combined premium of about US$10mil that target a jump to around 5.3% within roughly five weeks. The rate on the long bond hasn't been that high since 2007. The fresh bout of angst toward the United States 30-year bond follows a slump in Japan's longer-dated government debt this week as investors brace for the prospect of increased fiscal stimulus there in the wake of upper house elections this coming Sunday. Yields on Japanese bonds from the 10-year to the 40-year have spiked this week, echoing the surge seen in global markets in May. There are other bearish signals coming from the options market. The so-called skew on 30-year Treasuries has moved sharply over the past week toward put premiums as investors demand increased protection against higher yields and a bigger selloff in long-dated debt. That leaves long-bond options favouring puts by the most in about a month. — Bloomberg
Yahoo
15-07-2025
- Business
- Yahoo
Stock Market News for Jul 15, 2025
U.S. stocks closed higher on Monday, with the Nasdaq closing at a fresh record high, as President Donald Trump's tariff threats kept investors on edge while they waited for key economic data and the start of the earnings season. All three major indexes ended in positive territory. The Dow Jones Industrial Average (DJI) rose 0.2% or 88.14 points, to close at 44,459.65 points. The S&P 500 edged up 0.1%, or 8.81 points, to finish at 6,268.56 points. Communication services and financial stocks were the biggest gainers, while material stocks were the worst performers. The Financials Select Sector SPDR (XLF) gained 0.8%, while the Communication Services Select Sector SPDR (XLC) added 1%. The Materials Select Sector SPDR (XLB) lost 0.6%. Seven of the 11 sectors of the benchmark index ended in positive territory. The tech-heavy Nasdaq added 0.3%, or 54.80 points, to end at 20,640.33 points, hitting a fresh all-time closing high. The fear-gauge CBOE Volatility Index (VIX) was up 4.88% to 17.20. A total of 15.43 billion shares were traded on Monday, lower than the last 20-session average of 17.62 billion. Stocks ended mostly higher on Monday despite Trump's tariff threats over the weekend. Trump announced on Saturday that he would impose 30% tariffs on the European Union and Mexico starting Aug 1. Investors have been closely monitoring any developments on the tariff front after EU leaders hinted at negotiating with the Trump administration this month to reach a deal that would lower the duties. The optimism kept losses in check on Monday as investors believe that the high tariffs will ultimately be negotiated down before Aug 1. Trump's renewed tariff threats come just days ahead of the key inflation reading. The consumer price index reading, which will be released on Tuesday, will give investors a clearer picture of how Trump's tariffs, which are already in effect, are impacting the economy. The second-quarter earnings season, which kicks off later this week, and investors are eagerly waiting to assess the financial outlook of the major companies after the new tariffs go into effect. Major banks, including JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Wells Fargo & Company (WFC) are scheduled to report their quarterly results on Tuesday. Also, Bank of America Corporation (BAC) and The Goldman Sachs Group, Inc (GS) will report their quarterly results later this week. Goldman Sachs has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. No major economic data was released on Monday. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report Bank of America Corporation (BAC) : Free Stock Analysis Report Wells Fargo & Company (WFC) : Free Stock Analysis Report JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report Citigroup Inc. (C) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Malaysian Reserve
15-07-2025
- Business
- Malaysian Reserve
Alibaba to Baidu lead surge in equity-linked bond sales in Asia
ASIAN sales of bonds that can be turned into shares have soared in 2025, heading toward multiyear highs, as interest rates remain elevated and rallying stocks create the right conditions for this corner of the market to thrive. Led by Chinese companies, firms in the region have sold more than $30 billion of convertible and exchangeable bonds this year, up from over $20 billion in the same period a year earlier, according to data compiled by Bloomberg. Offerings denominated in US and Hong Kong dollars have been particularly popular. Concerns about inflation from US tariffs have kept Federal Reserve officials from cutting rates, making instruments such as convertibles that pay little, or even no interest, more attractive for borrowers. For investors, these hybrid securities offer a way to ride the recent rally in Chinese stocks — with limited downside. 'It's been an extraordinarily busy year and it will continue to be busy,' said Gautam Sareen, head of Asia Pacific equity linked and private capital markets at JPMorgan Chase & Co. 'Market conditions have never been healthier.' Demand has been so high for equity-linked securities that all of Asia's five largest issuances in this space didn't have to pay any interest. China's Baidu Inc., Alibaba Group Holding Ltd. and Ping An Insurance (Group) Co. of China Ltd. were among the biggest issuers of these hybrid instruments this year. Baidu raised $2 billion from the sale of notes exchangeable into shares of online-travel agent Group Ltd., while Alibaba sold HK$12 billion ($1.5 billion) of bonds that can be turned into shares of Alibaba Health Information Technology Ltd., following other issuers in taking advantage of the lower funding costs in the Hong Kong dollar compared to the greenback. Ping An raised almost HK$12 billion from its convertible. China's stock market 'felt quite solid right after Liberation Day and then rebounded very, very quickly,' said Brian Chau, co-head of equity-linked Asia at UBS Group AG. 'The APAC market is at a record strength.' Elsewhere, Grab Holdings Ltd. and MakeMyTrip Ltd. also had a big offerings, as did ailing carmaker Nissan Motor Co., which recently raised ¥200 billion ($1.4 billion) from one of Japan's biggest convertible bonds in years. In South Korea, LG Chem Ltd.'s $1 billion exchangeable bond in May revived a market that had dried up in the country in the wake of a 2023 short-selling ban that was only lifted few months ago. And although a flare-up of tensions on the geopolitical front or a negative shock for the global economy could shut the issuance window quickly, expectations remain high for offerings to keep flooding in. Saurabh Dinakar, head of Asia Pacific global capital markets at Morgan Stanley, said that DeepSeek's sudden emergence as an artificial-intelligence powerhouse and Chinese companies' low valuations helped kickstart the rally earlier this year, and the outlook remains bright. Investors now feel that valuations in China are 'at a bit of an inflection point and as a result they are wanting to get involved and engage in certain sectors,' Dinakar said. 'Assuming that we don't have a wobble from a geopolitical standpoint, our view is that the market will remain active for the balance of the year.' –BLOOMBERG
The Star
14-07-2025
- Business
- The Star
Xi's campaign against price wars creates a buzz
An aerial view shows Chinese-made cars parked at a port in Nanjing, in China's eastern Jiangsu province, on July 11, 2025, before being loaded onto a ship for export. (Photo by AFP) / China OUT Beijing: For strategists at JPMorgan Chase & Co and Goldman Sachs Group Inc as well as money managers in Hong Kong and Singapore, an opaque term has suddenly emerged as the catchphrase for deciphering Chinese policy intentions and navigating the stock market. The term 'anti-involution' has cropped up in government documents over the past year, but gained prominence earlier this month when President Xi Jinping chaired a high-level meeting that pledged to regulate 'disorderly' price competition. It refers to efforts to root out China's industrial malaise, marked by cut-throat price wars and overcapacity that have hurt profitability in sectors ranging from solar, electric vehicles (EVs) to steel. Investors are hopeful that a more coordinated policy response to tackle the drivers of deflation is on its way, though Beijing hasn't yet released any plan. Analyst reports on the theme have flooded the market, while solar and steel stocks have rallied in July. Morgan Stanley strategists changed their preference to onshore shares from those in Hong Kong last week. 'One of the biggest issues that investors have investing in China is that of excessive competition,' said Min Lan Tan, head of the Asia Pacific chief investment office at UBS AG. 'It's actually a very positive development that top down the government is now recognising it and directly saying that destructive competition has to stop. It's a powerful policy signal.' The Chinese term for involution, neijuan, literally means rolling inwards. In practice, it's used to describe a system of intense competition that yields little meaningful progress. Huge spending on building capacity has helped Chinese firms enhance their global standing. The nation's companies now dominate every step of the solar supply chain, while its EV makers have toppled Tesla's dominance. Yet, ending destructive competition has rarely been more important. Producer deflation is worsening, and trade tensions mean China can no longer unleash some of its overcapacity to other countries. 'With foreign markets closing off Chinese trade routes, part of the competition is forced to return to the domestic market,' said Jasmine Duan, senior investment strategist at RBC Wealth Management Asia. The campaign seems to be helping improve investor sentiment for the mainland market, where policy drivers have a stronger sway and industrial stocks have bigger weighting. The onshore CSI 300 Index has risen 2% so far in July, outperforming the Hang Seng China Enterprises Index after lagging it for most of the year. Solar stocks Xinjiang Daqo New Energy Co and Tongwei Co have advanced at least 19% this month. Liuzhou Iron & Steel Co Ltd has surged more than 50% while Angang Steel Co has gained about 16%. Glass, cement and chemicals shares have also jumped. It's still early stages but if the reforms pan out, 'there'll be consolidation in China and there'll be slightly better pricing and margins, and there'll be better valuation,' said Wendy Liu, head of China and Hong Kong equity strategist at JPMorgan. — Bloomberg
Business Times
13-07-2025
- Business
- Business Times
Xi's price-war campaign creates buzz in China's stock market
For strategists at JPMorgan Chase & Co and Goldman Sachs Group as well as money managers in Hong Kong and Singapore, an opaque term has suddenly emerged as the catchphrase for deciphering Chinese policy intentions and navigating the stock market. The term 'anti-involution' has cropped up in government documents over the past year, but gained prominence earlier this month when President Xi Jinping chaired a high-level meeting that pledged to regulate 'disorderly' price competition. It refers to efforts to root out China's industrial malaise, marked by cut-throat price wars and overcapacity that have hurt profitability in sectors ranging from solar, new energy vehicles to steel. Investors are hopeful that a more coordinated policy response to tackle the drivers of deflation is on its way, though Beijing has not yet released any plan. Analyst reports on the theme have flooded the market, while solar and steel stocks have rallied in July. Morgan Stanley strategists changed their preference to onshore shares from those in Hong Kong last week. 'One of the biggest issues that investors have investing in China is that of excessive competition,' said Tan Min Lan, head of the Asia-Pacific chief investment office at UBS. 'It's actually a very positive development that top down government is now recognising it, and directly saying that destructive competition has to stop. It's a powerful policy signal.' ' One of the biggest issues that investors have investing in China is that of excessive competition. It's actually a very positive development that top down government is now recognising it, and directly saying that destructive competition has to stop. It's a powerful policy signal. ' — Tan Min Lan, head of the Asia-Pacific chief investment office at UBS The Chinese term for involution, neijuan, literally means rolling inwards. In practice, it is used to describe a system of intense competition that yields little meaningful progress. Huge spending on building capacity has helped Chinese businesses enhance their global standing. The nation's companies now dominate every step of the solar supply chain, while its electric vehicle (EV) makers have toppled Tesla's dominance. Yet, ending destructive competition has rarely been more important. Producer deflation is worsening, and trade tensions mean China can no longer unleash some of its overcapacity to other countries. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'With foreign markets closing off Chinese trade routes, part of the competition is forced to return to the domestic market,' said Jasmine Duan, senior investment strategist at RBC Wealth Management Asia. The campaign seems to be helping improve investor sentiment for the mainland market, where policy drivers have a stronger sway and industrial stocks have bigger weighting. The onshore CSI 300 Index has risen 2 per cent so far in July, outperforming the Hang Seng China Enterprises Index after lagging it for most of the year. Solar stocks Xinjiang Daqo New Energy and Tongwei have advanced at least 19 per cent this month. Liuzhou Iron & Steel has surged more than 50 per cent while Angang Steel has gained about 16 per cent. Glass, cement and chemicals shares have also jumped. It is still early stages but if the reforms pan out, 'there'll be consolidation in China and there'll be slightly better pricing and margins, and there'll be better valuation', said Wendy Liu, head of China and Hong Kong equity strategist at JPMorgan. Sectors that are likely to benefit include cars, battery, solar, cement, steel, aluminium and chemicals, she said. To seasoned China watchers, the current rhetoric recalls the supply-side reforms of 2015-2018, when a government-led push to cut outdated capacity in sectors such as coal and steel helped drive up prices in the following years. This time, however, key differences may limit the campaign's effectiveness. A decade ago, oversupply was mostly concentrated in upstream and construction-related sectors. It has become more pervasive today, encompassing the most promising industries of solar, EV and battery to downstream consumer sectors such healthcare and food. Intensifying price war That point is illustrated by the intensifying price war among technology giants listed in Hong Kong – China's private sector leaders. Shares in Meituan, Alibaba Group Holding and have slumped more than 20 per cent from their March highs as they jostle for delivery market expansion. 'This time, the overcapacity is concentrated in industries mostly dominated by private firms, so the challenges are going to be greater than when SOEs (state-owned enterprises) ruled and could just buy up the private firms and shut them down,' said Li Shouqiang, a fund manager at Shenzhen JM Investment Management. Addressing the supply-demand imbalance will also require measures to reflate the economy by boosting consumption – a tall order the government has struggled to deliver on. For now, investors seem hopeful that a bigger supply-side reform is in the offing. Morgan Stanley strategists said sentiment has improved with the government's message, and added they now prefer A-shares over offshore ones. 'When senior policymakers change some policy tone, there should be some actionable items or something to follow through,' said Louisa Fok, China equity strategist with Bank of Singapore. It will not be a quick overnight fix, but it is 'definitely positive' that the government is aware of the problems, she added. Bloomberg
