Markets at the Midpoint (First of a Series)

“What’s the most depressing holiday?” Suspecting a joke, we hesitated before answering our friend’s query at a backyard barbecue last Saturday. “July 4th,” he said without waiting. Really? “It means the summer is almost over,” he finished glumly.

For credit market participants, the year’s too-swift passage also signals 2016’s halfway point – time to reflect on what the year has delivered so far, and what’s to come.

Over the next several weeks we’ll speak to credit buyers, sellers, and users about their perspectives on deal volume, leverage, pricing and overall terms.

We begin with a look at the overall economy. A mere three weeks has passed since the Brexit vote upended the European market, giving economists cause to retune global growth expectations. Globally there’s $13 trillion of sovereign debt sporting negative interest rates, per BAML. At Brexit’s epic-center, the Bank of England is expected to lower interest rates in a preemptive move to avoid a downturn.

Yet here at home the news has been quite different. Buoyed by continued good data on the employment front, public equities are back to their record highs of last summer. According to Bloomberg, $2 trillion in value has been restored to stock investors.