Weekly Market Insight

Latest Economic & Market Update 11th September 2020

11th September 2020

Good afternoon, it is September 11th 2020 and here is your economic and market update from BlackBee. 

Today’s focus:

  • Graph of the Week: Corporate Debt Issuance Spurred by Low Interest Rate Environment

Graph of the Week: Corporate Debt Issuance Spurred by Low Interest Rate Environment

Source: Bloomberg

The value of corporate debt issued globally in 2020 has already surpassed levels seen in 2019, despite another 3 and a half months of the year remaining. Although companies issued debt to raise funds to weather the economic downturn, a major influence in the increase of debt issued has been the new low interest rate environment. Companies are taking advantage of low interest rates to get cheap funding and to refinance existing debt. With such low interest rates companies are also extending maturity dates for new debt and locking in lower interest rates for longer terms. Considering the lack of yield available in the bond market for investors and that dividend yields are also extremely low, and with many companies not paying dividends for the near future, alternative investments look a much more attractive investment opportunity.

At a glance:

  • US stocks have fallen again with tech leading the way. The Nasdaq declined -1.99%, the S&P500 fell -1.76% and the Dow Jones shed -1.45% yesterday.
  • Republicans fail to pass a new $500 billion economic stimulus package through the senate as Democrats argue due to the large scale of the downturn the package is too small.
  • A further 880,000 people applied for unemployment benefits in the US last week. The week prior showed 881,000 claims which indicates the fall in unemployment claims is stalling.

Best & Worst Performers of Large Cap US Stocks on Thursday
Click image to enlarge

Global Market Update
(as at close of markets 10/09/2020)