Corporate bonds have shown resilience during a global government bond selloff, but this strength may be short-lived. Rising bond market volatility often signals trouble for corporate debt, and current pricing leaves little room for error. Analysts warn that corporate bonds could underperform government debt, widening the yield spread between corporate borrowers and Treasuries.
McDonald’s Corp. is struggling to attract cost-conscious customers who feel its menu is too expensive. Shares have dropped nearly 31% from their February high, on track for the worst annual return since 2002. The company is rolling out a multiyear plan called “Next” to boost sales through technology and restaurant upgrades.
Equity ETFs now dominate the market, accounting for roughly 80% of all ETF assets, while fixed income holds about 16%. This shift is largely due to stock outperformance rather than investor preference, as new money still flows in closer to the traditional 60/40 split.
CCC-rated debt, known for its equity-like volatility and higher default risk, may face refinancing challenges as the Federal Reserve continues tightening. Investors are likely to reduce risk, selling higher-rated bonds before CCCs, which could send shockwaves through the market.
European institutional investors largely oppose extending trading hours to 24/5 or 24/7, despite moves in that direction by some US exchanges and the London Stock Exchange. A survey found that 80% of participants do not want European markets to adopt longer trading hours.