Latest news with #fixedincome
Yahoo
3 hours ago
- Business
- Yahoo
Investors piled out of U.S. bond funds in Q2, but long-term Treasuries may soon get relief
While bond funds make up a small portion of the $28 trillion Treasury market, recent outflows show investors have become increasingly hesitant about long-term U.S. debt. Fixed-income experts told Fortune they're optimistic, however, about how loosening capital requirements can help major lenders act as a stabilizing force. A soaring national debt has added plenty of jitters to a Treasury market already reeling from tariff chaos, but there are signs that relief is coming to long-dated fixed income. For now, however, investors have piled out of long-term U.S. bond funds at the fastest rate since the early days of the COVID-19 pandemic, according to calculations from the Financial Times. Net outflows from funds with government and corporate debt totaled nearly $11 billion in the second quarter, the FT found using EPFR data, a stark contrast from average net inflows of roughly $20 billion over the past 12 quarters. While such funds make up a small portion of the $28 trillion Treasury market, the exodus shows investors have become increasingly hesitant about long-term U.S. debt, said Miguel Laranjeiro, investment director for municipal debt at Aberdeen Investments. 'Usually, that's because of fiscal policy rather than monetary policy, especially on the long end,' he told Fortune. Still, he's optimistic about what proposed regulatory changes could do for the market. Other fixed-income experts, meanwhile, warned not to look too far into the data, which can be volatile based on the timing of redemptions by various institutional investors. 'Near-term fund flows tell us very little other than validating near-term investor sentiment,' Bill Merz, head of capital markets research at U.S. Bank Asset Management, said in a statement to Fortune. There's no doubt the mood among fixed-income traders has been rocky, though. The yield on the 30-year Treasury, which rises as the market price of the bond declines, climbed above 5.1% in late May, hitting its highest level since the spring of 2007. Concerns about America's fiscal outlook have been front and center as Republicans work to pass President Donald Trump's 'big, beautiful' tax-and-spending bill, which the nonpartisan Congressional Budget Office estimates will add $2.8 trillion to federal deficits over the next decade. The pending legislation proved the final straw for Moody's, which in May became the last of the three major credit agencies to downgrade the U.S. from its top rung of borrowers. Goldman Sachs, meanwhile, partially validated the White House's claim that higher tariff revenue and economic growth from tax cuts would slash the debt. But its path remains unsustainable, economists from the investment bank said, as America's debt-to-GDP ratio approaches its post-World War II high. Long-term rates have been on a largely slow and steady decline this past month, however. Recent inflation readings have come in relatively cool, perhaps convincing investors they don't need as much compensation for the risk of surging prices eating into their returns. But yields rose slightly Friday afternoon after the Commerce Department reported the Fed's preferred inflation metric ticked higher last month as concerns remain about how tariffs will fuel price growth. And stocks got a brief shock when Trump said he had suspended trade talks with Canada. Recent volatility has JoAnne Bianco, senior investment strategist at BondBloxx Investment Management, advising clients to avoid long-dated government debt, like 20- and 30-year Treasuries, all together. 'You're not seeing the long end—the ultra-long end—work as the safe haven that it might have in the past,' she told Fortune. Currently, insurance companies and pension funds, who have obligations to pay investors over long periods of time, are among the few 'natural investors' in these types of securities, Laranjeiro said. That may change, however, after the Federal Reserve moved this week to boost bank participation in the Treasury market by loosening capital requirements for major lenders. Industry leaders like JPMorgan Chase CEO Jamie Dimon have argued current restrictions, instituted to prevent a repeat of the Global Financial Crisis, are overly onerous and prevent banks from providing liquidity during times of market stress. Such changes would not be without precedent, as the Fed also exempted Treasuries and bank reserves from the calculation of so-called supplementary leverage ratio—which curbs the amount of borrowed funds lenders can use to make investments—during the pandemic. Laranjeiro thinks it's a prudent move that can make government borrowing less dependent on foreign investors, whose holdings of U.S. debt are declining as a share of the overall market. Thomas Urano, co-chief investment officer at Sage Advisory, agreed that boosting domestic demand for U.S. debt could offset concerns about the market's ability to absorb increased issuance from the Treasury. 'I think that's what the bond market and the investor community [are] kind of pinning their hopes on,' he told Fortune. And if this change can help make fixed income boring again, investors might come crawling back. This story was originally featured on 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
Bloomberg
14 hours ago
- Business
- Bloomberg
BlackRock Says Unpredictable US Policy a Boon for Europe Credit
BlackRock Inc. sees European fixed income benefiting from any investor shift away from the US, signaling caution around unpredictable US policy and ballooning government debt. Foreign investors are stepping back from the US and its 'special status' in financial markets could be challenged if the country's government debt is left unchecked, according to BlackRock's fixed income outlook. The largest US fixed-income allocators are risk averse and see Europe's stability as more appealing compared with Asian or emerging markets, the report said.
Zawya
19 hours ago
- Business
- Zawya
Qatar Insurance mandates banks on Tier 2 notes
Qatar Insurance Company Q.S.P.C (QIC) has mandated banks to launch a series of fixed income investor meetings commencing on Monday, June 30. A USD-denominated Reg S only perpetual non-call 6-year subordinated, unsecured Tier 2 notes may be issued, subject to market conditions. HSBC has been appointed as sole structuring adviser. ANZ, HSBC and J.P. Morgan are global coordinators and joint bookrunners and ANZ, Emirates NBD Capital, HSBC, J.P. Morgan, Mashreq and QNB Capital are joint bookrunners The notes will be potentially issued by QIC (Cayman) Limited and guaranteed on a subordinated basis by QIC. Use of proceeds include strengthening the capital position and other corporate purposes, which may include funding in whole or part redemption of its $300 million perpetual Subordinated Tier 2 notes, the investor document showed. QIC, the largest insurance company in the MENA region by total assets and total equity, is rated A- by S&P and A- by A.M. Best, both with a stable outlook. The notes are expected to be rated BBB by S&P. The notes will be listed on London Stock Exchange's International Securities Market. In 2022, the insurer refinanced a 2017 Tier 2 issue with a $400 million raise. The Qatar government and the Qatari Royal Family hold a 23% shareholding in QIC. (Writing by Brinda Darasha; editing by Seban Scaria)
Yahoo
a day ago
- Business
- Yahoo
Investors piled out of U.S. bond funds in Q2, but long-term Treasuries may soon get relief
While bond funds make up a small portion of the $28 trillion Treasury market, recent outflows show investors have become increasingly hesitant about long-term U.S. debt. Fixed-income experts told Fortune they're optimistic, however, about how loosening capital requirements can help major lenders act as a stabilizing force. A soaring national debt has added plenty of jitters to a Treasury market already reeling from tariff chaos, but there are signs that relief is coming to long-dated fixed income. For now, however, investors have piled out of long-term U.S. bond funds at the fastest rate since the early days of the COVID-19 pandemic, according to calculations from the Financial Times. Net outflows from funds with government and corporate debt totaled nearly $11 billion in the second quarter, the FT found using EPFR data, a stark contrast from average net inflows of roughly $20 billion over the past 12 quarters. While such funds make up a small portion of the $28 trillion Treasury market, the exodus shows investors have become increasingly hesitant about long-term U.S. debt, said Miguel Laranjeiro, investment director for municipal debt at Aberdeen Asset Management. 'Usually, that's because of fiscal policy rather than monetary policy, especially on the long end,' he told Fortune. Still, he's optimistic about what proposed regulatory changes could do for the market. Other fixed-income experts, meanwhile, warned not to look too far into the data, which can be volatile based on the timing of redemptions by various institutional investors. 'Near-term fund flows tell us very little other than validating near-term investor sentiment,' Bill Merz, head of capital markets research at U.S. Bank Asset Management, said in a statement to Fortune. There's no doubt the mood among fixed-income traders has been rocky, though. The yield on the 30-year Treasury, which rises as the market price of the bond declines, climbed above 5.1% in late May, hitting its highest level since the spring of 2007. Concerns about America's fiscal outlook have been front and center as Republicans work to pass President Donald Trump's 'big, beautiful' tax-and-spending bill, which the nonpartisan Congressional Budget Office estimates will add $2.8 trillion to federal deficits over the next decade. The pending legislation proved the final straw for Moody's, which in May became the last of the three major credit agencies to downgrade the U.S. from its top rung of borrowers. Goldman Sachs, meanwhile, partially validated the White House's claim that higher tariff revenue and economic growth from tax cuts would slash the debt. But its path remains unsustainable, economists from the investment bank said, as America's debt-to-GDP ratio approaches its post-World War II high. Long-term rates have been on a largely slow and steady decline this past month, however. Recent inflation readings have come in relatively cool, perhaps convincing investors they don't need as much compensation for the risk of surging prices eating into their returns. But yields rose slightly Friday afternoon after the Commerce Department reported the Fed's preferred inflation metric ticked higher last month as concerns remain about how tariffs will fuel price growth. And stocks got a brief shock when Trump said he had suspended trade talks with Canada. Recent volatility has JoAnne Bianco, senior investment strategist at BondBloxx Investment Management, advising clients to avoid long-dated government debt, like 20- and 30-year Treasuries, all together. 'You're not seeing the long end—the ultra-long end—work as the safe haven that it might have in the past,' she told Fortune. Currently, insurance companies and pension funds, who have obligations to pay investors over long periods of time, are among the few 'natural investors' in these types of securities, Laranjeiro said. That may change, however, after the Federal Reserve moved this week to boost bank participation in the Treasury market by loosening capital requirements for major lenders. Industry leaders like JPMorgan Chase CEO Jamie Dimon have argued current restrictions, instituted to prevent a repeat of the Global Financial Crisis, are overly onerous and prevent banks from providing liquidity during times of market stress. Such changes would not be without precedent, as the Fed also exempted Treasuries and bank reserves from the calculation of so-called supplementary leverage ratio—which curbs the amount of borrowed funds lenders can use to make investments—during the pandemic. Laranjeiro thinks it's a prudent move that can make government borrowing less dependent on foreign investors, whose holdings of U.S. debt are declining as a share of the overall market. Thomas Urano, co-chief investment officer at Sage Advisory, agreed that boosting domestic demand for U.S. debt could offset concerns about the market's ability to absorb increased issuance from the Treasury. 'I think that's what the bond market and the investor community [are] kind of pinning their hopes on,' he told Fortune. And if this change can help make fixed income boring again, investors might come crawling back. This story was originally featured on 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
Yahoo
3 days ago
- Business
- Yahoo
Is MarketAxess Holdings Stock Outperforming the Nasdaq?
Valued at $8.4 billion by market cap, New York-based MarketAxess Holdings Inc. (MKTX) operates an electronic trading platform for institutional investors and broker-dealer companies worldwide. It focuses on expanding liquidity opportunities, improving execution quality, and cost savings across global fixed-income markets. Companies worth between $2 billion and $10 billion are generally described as "mid-cap stocks." MarketAxess fits right into that category, reflecting its significant presence and influence in the capital markets industry. Tesla's Robotaxis Reportedly Sped and Veered Into the Wrong Lanes. Does This Crush the Bull Case for TSLA Stock? Dear Micron Stock Fans, Mark Your Calendars for June 25 Is United Health Stock a Buy, Hold or Sell for July 2025? Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. MarketAxess touched its 52-week high of $296.68 on Oct. 30, 2024, and is currently trading 24.8% below that peak. Meanwhile, the stock has gained 4.6% over the past three months, lagging behind the Nasdaq Composite's ($NASX) 9.3% surge during the same time frame. MKTX stock has dipped 1.3% on a YTD basis, lagging behind Nasdaq's 3.4% uptick in 2025. However, MKTX stock is up 15% over the past 52 weeks, slightly outperforming NASX's 12.7% surge during the same time frame. To confirm the recent downturn, MKTX stock traded below its 50-day moving average between mid-November 2024 and early March. Moreover, the stock has remained below its 200-day moving average since mid-December last year. MarketAxess Holdings' stock prices observed a marginal dip following the release of its Q1 results on May 7. While emerging markets and eurobonds' average daily volumes and revenues observed a solid growth during the quarter, US credit commission revenues for the quarter experienced a notable drop. This led to a marginal 83 bps year-over-year drop in total revenues to $208.6 million. The company's general, admin, and other operating expenses observed a notable increase, leading to a 2.6% decrease in adjusted EPS to $1.87. However, this figure surpassed the consensus estimates by 2.8%. Meanwhile, MarketAxess has significantly underperformed its peer Tradeweb Markets Inc.'s (TW) 10% gains on a YTD basis and 38.7% surge over the past 52 weeks. Among the 14 analysts covering the MKTX stock, the consensus rating is a 'Moderate Buy.' Its mean price target of $238.83 suggests a 7% upside potential from current price levels. On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
