Getting our heads back into markets, we reflect this week on the shape of public equities and fixed income. The S&P 500 has gained about 10% year-to-date, less than half of the 20% return for the comparable period in 2024. Similar figures for the DJIA are 7% and 10.5%, respectively.
Ten-year Treasurys bottomed out a year ago at 3.6%, heading higher since then, and now at 4.2%. Rates since April have been in a range, thanks to tariff concerns. The S&P US Aggregate Bond Index stands at 4.5% year-to-date, while the comparable Bloomberg Agg is 3.75%. On the leveraged front, loans have gained 4.5% (per the Morningstar LSTA 100) and high-yield bonds returned between 5.6% and 6.25%, per the ICE BofA and Morningstar indices, respectively.
KBRA’s Van Hesser spoke last month to asset returns in his podcast, Three Things in Credit. He refers to a Goldman research piece expecting annual equity returns of 3% over the next decade. In a world where S&P values stocks in the index today at 3.3 times sales, “an all-time high.”...
“Based on all the data in hand, I believe…the downside risks to the labor market have increased.” – Christopher Waller, governor, Federal Reserve (FT).
Featuring Charts
Chart of the Week: Tariff Drag
Growth forecasts for this year and next are well below last December’s estimates. Source: Oxford Economics/Haver Analytics
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Chart of the Week: All-Weather Buyouts
While direct lending was subdued with rate liftoff, it’s recovered despite tariff noise. Source: DLD KBRA
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Chart of the Week: Loans Unleashed
July set record monthly leveraged loan volume; eight of top ten highest in last two years. Source: PitchBook, Bloomberg
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Chart of the Week: Behind the Curve
Private equity fundraising through early June is slowest pace in over a decade. Source: PitchBook
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Chart of the Week: Exit Ramp
The number of PE exits slumped 1Q after last year’s steady improvement. Source: Preqin Pro
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Chart of the Week: Slowing the Slowdown
Notwithstanding tariffs, economists now view the chances of a recession fading. Source: WSJ Surveys of Economists
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Features
Bloomberg: Leveraged Lending Insights – 9/1/2025
Issuance Cools from July High but Sets Record for August Following a robust July that saw $200b of institutional leveraged loans price, issuance cooled somewhat in August. At $79.5b across 68 deals, issuance receded 60% from the July high but remained elevated for what is typically a quieter month in the leverage loan market. In…
Middle Market & Private Credit – 9/1/2025
Credit Journal – Private Credit Click here to download. This edition of Fitch Ratings’ Credit Journal series explores the growing world of Private Credit,… Subscribe to Read MoreAlready a member? Log in here...
The Pulse of Private Equity – 9/1/2025
PE nowcast vs. reported returns Download PitchBook’s Report here. Like many asset classes, US PE funds experienced strong performance gains in the market acceleration during the COVID-19 pandemic…. Subscribe to Read MoreAlready a member? Log in here...
Leveraged Loan Insight & Analysis – 9/1/2025
BDC AUM hits a new record, topping US$500bn The upward growth trajectory of BDCs shows no sign of slowing, with assets under management (AUM) climbing to a record US$503bn in 2Q25, representing a US$28bn increase from the prior quarter and a whopping US$128bn gain in the last twelve months…. Subscribe to Read MoreAlready a member?
PDI Picks – 9/1/2025
Unrealised potential Investors are struggling to get as much invested in private credit as they would like, although there has been a surge in allocations from sovereign wealth funds. With three quarters of institutions under-allocated to private credit – according to Private Debt Investor’s H1 2025 Investor Report – there is a huge potential pool…
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Beginning in July 2022 The Lead Left published a series of articles on credit market. This report consolidates those articles.
Cov-lite trends Inflation & rising interest rates – LIBOR to SOFR transition Mega-tranche uni trend ESG takes center stage Login to view interactive report and download PDF version. … Subscribe to Read MoreAlready a member? Log in here Related posts: 2H 2021 Midyear Outlook Report State of the Capital Markets – Fourth Quarter 2016 Review and
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