Investors surveyed by JPMorgan Chase & Co. are the most bullish on investment-grade bonds in more than nine years as they demand the least relative yields since the start of the financial crisis. Arch Coal Inc. plans to raise $300 million in a private offering of secured notes.
GFI Group Inc. , which matches securities and derivatives trades between banks, may sell notes as the lowest interest rates on investment-grade debt in at least 23 years allow companies to pare debt payments.
Strategists at JPMorgan Chase & Co. lowered their recommendation on U.S. investment-grade corporate bonds to neutral from overweight, saying that uncertainty about Europe’s fiscal crisis will limit returns for the debt.
Wall Street’s biggest firms are predicting intensifying bond losses in emerging markets, where borrowing costs have already soared to the highest in more than four years versus U.S. corporate debt, as the Federal Reserve considers curtailing record stimulus.
Bond managers from Pacific Investment Management Co. to Neuberger Berman Management LLC are sticking with bets that U.S. banks will withstand a European crisis that’s triggered the biggest losses since early 2009.
Bill Gross, Jeffrey Gundlach and Dan Fuss, whose firms collectively oversee about $1.5 trillion, expect the Federal Reserve to conduct a third round of bond purchases as signs of strength in the U.S. economy fade and Europe’s sovereign-debt crisis returns.
The most relentless surge in borrowing costs for U.S. corporate debt in four years is threatening to derail this year’s record pace of sales as concern deepens the Federal Reserve will curtail unprecedented stimulus.