Investment

BlackRock increases investment grade credit overweight

Published

2 years ago

November 21, 2022

NEW YORK (Reuters) -Asset manager BlackRock said on Monday it had increased its strategic overweight on investment grade credit due to attractive valuations and the income potential coming from corporate bonds’ higher yields.

“We go more overweight investment grade (IG) credit on attractive yields and healthy corporate balance sheets that can withstand the mild recession we expect,” strategists at the BlackRock Investment Institute said in a note.

The yield spread on the ICE BofA U.S. Corporate Index <.MERC0A0>, a commonly used benchmark for the investment grade bond market, has gone up by about 50 basis points this year, reflecting the premium investors demand to hold corporate debt over safer U.S. Treasuries.

Expectations of a sharp economic slowdown as the Federal Reserve increases interest rates to fight decades-high inflation have led that spread to widen to more than 170 basis points last month, its highest since early 2020, but it has come down in recent weeks and stood at 145 basis points as of the end of last week.

“We like the income we can pick up in IG at higher spreads. And we see looming recessions having more ripple effects on high yield than IG,” the BlackRock note said, with reference to debt issued by companies with lower credit ratings.

BlackRock, the world’s largest asset manager, also said it remained underweight government bonds due to expectations of persistent inflation, and that it preferred shorter-dated ones to longer-dated bonds, for which holders will likely demand added compensation.

“We are underweight long dated DM (developed markets) government bonds as we see term premium driving yields higher, yet we are neutral short-dated government bonds as we see a likely peak in pricing of policy rates,” it said.

(Reporting by Davide Barbuscia; Editing by Paul Simao)

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

3 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

4 weeks ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX composite little changed in late-morning trading, U.S. stock markets down

Published

4 weeks ago

October 10, 2024

Anne Joseph

TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.

The S&P/TSX composite index was up 0.05 of a point at 24,224.95.

In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.

The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.

The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.

The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.

This report by The Canadian Press was first published Oct. 10, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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