News

Analysis: Corporate credit tremors in aftershock of tariff-led stock rout

The tariff shock and recession fears that have sent world stocks into a tailspin over the last week are rolling into corporate funding markets, raising the cost of borrowing and disrupting financing plans even for lower-risk companies. With U.S. Treasuries nursing huge losses on Wednesday - the strongest sign yet that stress is impacting so-called safe-haven assets - attention has now turned to the $35 trillion global corporate bond market, which has swelled by around 40% since 2008 as companies gorged on cheap debt, OECD data shows. The premium investors demand to hold low-rated corporate credit versus government debt has soared by 100 basis points in a week, the biggest short-term move in so-called global junk bond spreads since the U.S. regional banking crisis in March 2023.

US producers face tough choices on growth, capital returns as oil falls below $60

A plunge in oil prices below $60 per barrel due to an escalating trade war may trigger anxiety across the U.S. oil patch, likely forcing companies to double down on measures including cuts to share buybacks and capital expenditures, analysts have said. Brent crude and West Texas Intermediate (WTI) futures slid to their lowest since February 2021, as sweeping tariffs imposed by U.S. President Donald Trump sparked concerns of a recession amid signs of higher supply from top producers. Raymond James analyst Pavel Molchanov said some producers might reduce 2025 capex if the downturn persists, though broader cuts will depend on the depth and duration of the slump.