Wall Street’s biggest bond dealers are telling clients to shift from most fixed-income markets into U.S. stocks as deepening concern the Federal Reserve will pare unprecedented stimulus fuels the worst debt losses since 2011.
The cost to protect against a default by U.S. banks rose and a benchmark gauge of corporate credit risk reached a 14-month high amid fear that Europe’s debt crisis will infect the global financial system and sink the economy back into recession.
MetLife Inc. , the largest U.S. life insurer, is expanding private lending to corporations as Chief Investment Officer Steven Kandarian seeks to bolster returns on the firm’s $443 billion portfolio amid near-zero interest rates.
The market for junk bonds is reviving, after at least seven companies pulled sales last week, signaling investors are gaining confidence that Europe’s sovereign debt crisis won’t infect the global economy.
The world’s largest junk-bond market, which lost 26 percent in 2008 as credit froze, is signaling Europe’s debt crisis, China’s slowdown and America’s rising jobless rate don’t add up to another U.S. recession.
A move by a soybean-growing province in northern Argentina to pay its dollar debt in pesos is raising the specter that holders of the nation’s $19 billion of local U.S. currency bonds won’t get their money back.