All three major ratings firms provide equity credit for hybrid bond issuances, largely treating them as if they were made up of 50% equity—a boon to the issuer’s credit ratios and ratings. What makes the bonds equity-like is the option for companies to defer coupon payments, as well as the bonds’ ability to absorb losses in the event of a bankruptcy.
Investors poured $62.5 billion into U.S. equity mutual and exchange-traded funds in December, the highest monthly inflow on record.
The equity risk premium, defined as the gap between the S&P 500’s earnings yield and that of 10-year Treasurys, turned negative in late December for the first time since 2002 and sat last week at negative 0.15 percentage point.
Public pension plans, university endowments and charitable foundations have about doubled their investments in private-equity funds since 2018. North American private-equity funds now manage some $4 trillion in assets.
The top 20 hedge-fund managers oversee about 20% of industry assets but are responsible for an estimated 32% of industrywide net gains.
Meeting minutes from the Fed’s December policy meeting showed officials bracing for the possibility that the coming administration could usher in another spell of higher-than-expected inflation.
CBRE announced Tuesday that it has agreed to purchase the 60% stake that it didn’t already own in Industrious, a deal that values the co-working company at about $800 million. Industrious has more than 200 locations in over 65 cities globally that make office space available to businesses on flexible terms.
Job gains averaged 186,000 a month in 2024. But 76% of the job growth in the past year has been in healthcare and education, leisure and hospitality, and government. In fields such as finance, information, and professional and business services, job growth has been far weaker.
The spread between current coupon benchmark mortgage bonds and the yield of relevant Treasurys is currently between 1.3 to 1.4 percentage points. That gap has been unusually wide for a few years now, well above the sub-1 point gap seen back in 2019.
