SEC panel advances plan to force investor focus on rulemaker
The US Securities and Exchange Commission needs to make investor-focused oversight changes to the group that sets accounting rules for US companies, the SEC's Investor Advisory Committee voted Wednesday. The panel forwarded to the Wall Street regulator a slate of recommendations to improve how the rulemaker crafts accounting standards so new rules focus on the information investors need to make investment decisions. (Bloomberg Law | Sep 21)
Loans are cheaper than bonds for some highly rated companies
Some highly rated companies are turning to term loans instead of bonds for their financing needs, taking advantage of cheaper pricing as banks adjust more slowly to rising interest rates than the credit markets. With the Federal Reserve approving a 0.75-percentage-point interest-rate increase Wednesday, finance chiefs are doing the math as they weigh alternative instruments to pay for maturing debt, mergers and acquisitions or other transactions. (The Wall Street Journal | Sep 21)
US debt buyers brace for Fed to hike 'until something breaks'
US corporate debt markets fluctuated between losses and gains after Federal Reserve officials raised interest rates by 75 basis points for the third consecutive time and stoked expectations among debt investors for even tighter policy ahead. Credit risk gauges whipsawed as the market digested Fed Chair Jerome Powell's message, and the high-grade primary market muted as borrowers remain cautions. (Bloomberg Markets | Sep 21)
Fund managers pitch 'alts' to retail investors as institutions max out
A saturated market for institutional clients is pushing asset managers to pursue another business: selling so-called alternative investments to rich individual investors. Alternatives stray outside mainstream portfolios of stocks and bonds into such asset classes as credit, private equity and real estate. Harder to trade and often walled off by accreditation requirements, they have historically been the domain of large investors such as pension funds and endowments. (Financial Times | Sep 19)
Rising bond yields change the calculus for stocks
Bond yields are trading at their highest levels in more than a decade. That poses yet another threat to a stock market that has struggled to find its footing this year. When interest rates were at rock bottom, as they were after the 2008 financial crisis and then again after the pandemic, it was easy for investors to justify putting money in the relatively risky stock market. The returns they would get from stocks would almost always beat what they could get from government bonds yielding close to nothing — leading Wall Street to declare “there is no alternative” to stocks. (The Wall Street Journal | Sep 19)
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