Companies tap US bond market for nearly $70 billion, starting September on a busy note By Matt Tracy WASHINGTON (Reuters) -Investment-grade corporate borrowers tapped U.S. debt markets for nearly $70 billion so far this week, beating forecasts for the Labor Day-shortened first week of September as borrowing costs remain near record lows. At least 54 borrowers sold more than $67 billion worth of paper this week as of Friday’s market open, according to market participants. This well outpaced forecasts heading into the week of roughly $60 billion. Tuesday by far added the most to the week’s primary market tally, with 28 issuers selling $43.3 billion in bonds in what is historically the busiest day of the year for high-grade bond market deal-making. The Tuesday deal frenzy ranked among the busiest post-Labor Day market opens ever for the high-grade primary market, according to Blair Shwedo, head of investment-grade sales and trading at U.S. Bank in Charlotte, North Carolina. It was an expected busy day for the calendar, he noted, but surprising in the high number of smaller-sized deals compared to previous such days in recent years. "The past few (post-Labor Day holiday) days that have been that large had mega-deals," Shwedo said. "So the diversity there this Tuesday was pretty impressive." The largest deal to start the week was U.S. pharmaceutical company Merck’s $6 billion six-part senior note offering, which will help fund its $10 billion buyout of peer Verona Pharma announced on July 9. The second-biggest bond sale was health insurer Cigna’s $4 billion deal to refinance its soon-maturing term loan and for general corporate purposes. 3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. Spreads on high-grade deals this week, or the premium over U.S. Treasuries paid by U.S. companies for debt, remained near all-time tight levels that have persisted in recent weeks. They last averaged 79 basis points (bps), according to the ICE BofA Corporate Index, having risen from a record-tight 75 bp level hit on August 15. "From our perspective, deals have been coming pretty tight compared to existing paper," said Mike Sanders, head of fixed income at Madison, Wisconsin-based asset manager Madison Investments. Current cheap borrowing costs could cheapen further if the Federal Reserve begins rate cuts at the September 16-17 meeting of the Federal Open Markets Committee. The U.S. rate futures market has priced in an 88% chance of a 25-bp rate cut by the Fed this month. It has also priced in a 12% chance of a bigger 50-bp cut following data from the Bureau of Labor Statistics showing U.S. nonfarm payrolls rose by an underwhelming 22,000 jobs last month. "A Fed easing cycle is generally beneficial for corporations and could also help boost economic growth," said Natalie Trevithick, head of investment-grade credit at Los Angeles-based asset manager Payden & Rygel, in a written note. "Such an environment could enable spreads on corporate bonds to remain at their currently tight levels for some time to come or possibly even tighten further." The fastest way to find out is with our Fair Value calculator. We use a mix of 17 proven industry valuation models for maximum accuracy. Get the bottom line for MRK plus thousands of other stocks and find your next hidden gem with massive upside.

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Macquarie sees U.S. bond market bottoming by mid-September Investing.com - Macquarie analysts predict the U.S bond market is approaching a bottoming process by mid-September, according to a technical analysis report released Monday. The investment firm identifies a 40-year cycle pattern that reached a significant trough in 2020-21, shifting the long-term trend to bullish, with the upside reaching the regression mean of 5.00 in 2023. Price movements since 2023’s high have formed what Macquarie describes as a "broad congestion phase" with a major rectangle formation showing a higher-for-longer pattern, defined by support at 3.60-3.80 and resistance at 4.80-5.00. The short-term trend has developed into a diamond pattern within the 4.10-4.60 range, which Macquarie notes makes market movement "very difficult to predict," though the firm expects a rally to the upper boundary if prices remain above 4.10. Macquarie observes that current market behavior appears to mirror patterns seen in 2017, suggesting a bottoming process will likely occur by mid-September. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. 3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. Which stock should you buy in your very next trade? AI computing powers are changing the stock market. Investing.com's ProPicks AI includes dozens of winning stock portfolios chosen by our advanced AI. Year to date, 3 out of 4 global portfolios are beating their benchmark indexes, with 98% in the green. Our flagship Tech Titans strategy doubled the S&P 500 within 18 months, including notable winners like Super Micro Computer (+185%) and AppLovin (+157%). Which stock will be the next to soar?

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World stocks hit new peak, US bond prices rise as markets position for Fed rate cut - Reuters World stocks hit new peak, US bond prices rise as markets position for Fed rate cut  Reuters

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U.S. interest rates soared as inflation pressures intensified. The bond market's turmoil highlights growing economic challenges ahead. #USBondMarket #EconomicNews learn how i got $1256 grant for my business: tinyurl.com/financialhel...

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US bond manager PIMCO looks abroad as US exceptionalism fades NEW YORK (Reuters) - U.S. bond firm PIMCO said on Tuesday that waning business and consumer confidence under President Donald Trump’s policies is eroding the edge U.S. capital markets held over the rest of the world, strengthening the case for investors to diversify globally. Trump is set to unveil "reciprocal tariffs," aligning U.S. duties with those of other nations on April 2, a move that could deepen a market downturn caused by his economic policies that has already seen U.S. stocks post their most dismal three-month stretch since 2022. "With both business and consumer confidence declining, the U.S. economic and financial-market exceptionalism of recent years could be fading," PIMCO said in a report written by Tiffany Wilding, an economist, and Andrew Balls, chief investment officer for global fixed income. "With the U.S. signaling a pullback from some traditional functions ... long-held assumptions about the U.S. as a reliable international leader are being challenged," they said. "These changes may coincide with the twilight of the recent U.S. capital markets’ outperformance relative to the rest of the world." PIMCO expects U.S. protectionist policies will rekindle inflation and lead U.S. economic growth to slow this and next year, while government spending in Europe could improve those countries’ economic prospects. "There is a strong case to diversify away from highly priced U.S. equities into a broader mix of global, high-quality bonds," said the California-based fund manager, which manages nearly $2 trillion in assets. At the same time, while European fiscal expansion could boost growth, it also makes their bonds less attractive, said PIMCO, which instead favors the UK and Australia for so-called ’duration’ - or exposure to bonds that could benefit from cuts in interest rates. More broadly, PIMCO said it anticipates the beginning of a multi-year phase where fixed income assets - such as corporate and sovereign bonds - may outperform equities. "In this unusually uncertain macroeconomic environment, it’s prudent to prioritize simple, stable investments over trying to predict the unpredictable," it said.

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