46 Mins Ago
A play for income investors who want to take a little risk, per Allspring’s George Bory
An opportunity for fixed income investors has emerged in the high yield bond space, according to George Bory, chief investment strategist for fixed income at Allspring Global Investments.
“The short maturity part of the high yield market looks very attractive,” he told CNBC in a phone interview Tuesday. “We call it the B’s, but the higher yielding, shorter duration part of the market generates income of 7.5% and as high as 8%.”
In particular, Bory has been looking at the investment grade BBB-rated issues, as well as the BB and B cohort of the high yield bond market. He aims for an average maturity between 1 ½ and 2 years.
Longer-dated bonds have greater duration, which means their prices are more sensitive to changes in interest rates. He avoids CCC-rated bonds, which carry greater default risk.
“You’ve isolated the bond market to the most amount of income you can generate without taking a lot of duration risk,” said Bory. “This isn’t a risk-free investment, but you generate 8% income … That’s one of the biggest opportunities in the market.”
An Hour Ago
Japan’s economy shrinks much faster than expected
Japan’s economy shrank in the July-September period for the first time in four quarters, provisional government data showed Wednesday, amid slowing global demand and rising domestic inflation.
Provisional gross domestic product fell 2.1% in the third quarter compared to a year ago, while also recording a 0.5% decline from the previous quarter.
Economist surveyed by Reuters had expected the world’s third-largest economy to post an annualized 0.6% decline and a quarter-on-quarter 0.1% contraction in the July-September quarter.
Read the full story here.
— Clement Tan
An Hour Ago
SEC’s crypto enforcement reaps nearly $5 billion in financial remedies
The Securities and Exchange Commission’s cryptocurrency crackdown yielded close to $5 billion in financial remedies, including penalties, for the fiscal year 2023.
The roughly $4.95 billion in remedies includes about $3.37 billion in disgorgement and prejudgment interest, plus $1.58 billion in civil penalties, according to a Tuesday announcement from the SEC.
The federal regulator said it filed 784 enforcement actions during the year, up 3% from the 2022 fiscal year.
The SEC’s enforcements addressed an array of activities in the crypto space: The agency filed charges against crypto exchanges Celsius and Kraken. Regulators also slapped charges on influencers who allegedly touted crypto assets without disclosing that they were paid to do so.
An Hour Ago
Market implications of a potential government shutdown
Washington may be able to avoid a government shutdown by the upcoming Friday deadline, but that doesn’t mean Congress — or the markets — are quite in the clear.
With several contentious issues still on the table, such as border security and aid for Israel — economists and policy analysts on Wall Street believe the two-tier continuing resolution will just lengthen the process of reaching longer-term fiscal deals.
“If Congress avoids a shutdown, it will likely be through yet another temporary extension. As we wrote recently, the longer the government operates under short-term extensions, the less likely it will be that Congress will reach a deal on full-year spending bills,” Goldman Sachs chief economist Jan Hatzius wrote in an Oct. 25 note.
The full story can be found here.
— Hakyung Kim
An Hour Ago
House of Representatives passes bill to avert government shutdown
The House passed a funding measure late Tuesday, sending the bill to the Senate to stave off of a government shutdown.
The bill is a “laddered” continuing resolution. That means it will fund some parts of the government until Jan. 19 and others until Feb. 2. From here, the bill goes to the Senate, which is expected to pass the bill and send it to President Joe Biden for signing.
Lawmakers voted 336 in favor of the bill, with 95 against it.
Without this funding measure in place, the federal government is set to shut down at 11:59 p.m. ET on Friday.
Read more about the continuing resolution and its details here.
–Darla Mercado, Chelsey Cox
2 Hours Ago
Investor’s may be ‘overreacting’ to Tuesday’s soft inflation numbers, says JPMorgan CEO Jamie Dimon
Tuesday’s muted inflation numbers instilled fresh optimism into the stock market, but JPMorgan Chase CEO Jamie Dimon believes that investors may be getting ahead of themselves.
“Personally, I think people are overreacting to short-term numbers — and they should stop doing that ,” he told Bloomberg. “I think inflation is probably a little stickier than that [data] shows.”
Dimon added that while the Federal Reserve is pausing its rate-hiking cycle for now, that doesn’t necessarily mean that there won’t be any more hikes in the future.
“But I still think you should prepare that they might have to do a little more…just as a risk management tool. And I’m afraid inflation may not go away that quickly,” he said.
— Lisa Kailai Han