One of these strategies should work.  A pair of Friday headlines from Bloomberg:

LVMH to Cut Price Premium in China to Battle Luxury Gray Market

 Luxury Labels Ditch Steep China Discounts to Rebuild Value

It’s the art of the deal, literally.  Sotheby’s, Christie’s and Phillips will collectively bring 295 works to auction in New York next week, with low-end revenue estimates standing at $952 million per data from research firm ArtTactic, a 2% uptick over last year’s haul. Dealer and advisor estimates compiled by CNBC, meanwhile, point to $1.1 billion in total sales, equivalent to a 17% increase.

“One thing that works in our favor is that, in times of volatility, people look to tangibles,” Christie’s CEO Bonnie Brennan told the TV network, noting that a prominent sale in early 2009 represented the auction house’s highest-ever collection total at the time.  “Given the volatility in the financial markets, a lot of people feel safer in buying high-quality, blue-chip works. It’s a safer place to put their money.”

Yet the rollicking bull market has failed to confer reciprocal strength onto that highly discretionary spending category. Global art sales by dollar value in 2024 registered at $57.5 billion per the latest UBS Art Market Report, down 12% year-over-year. Waning high-end sales drove that downshift, as auction sales of works priced below $250,000 grew at a healthy 17% clip, versus an aggregate 3% uptick in total transactions.

“I can’t think of any clients who are putting together a collection,” Cary Leibowitz, worldwide co-head of editions at Phillips, lamented to The Art Newspaper’s Scott Reyburn last week, citing a downshift at the high-end for his division’s 30% sales decline in 2024. “We don’t have those collectors anymore. That connoisseurial thing has evaporated. We might have a client who has bought a $12 million apartment up the street. Instead of a $12 million budget for art, they’ll tell their advisor to spend less than $1 million. A Warhol Marilyn print over the mantel will only cost him $200,000.”

Soft market conditions, meanwhile, have served to put the squeeze on some patrons who opted to adorn their portfolios with leverage. Specialty art lenders “have issued margin calls as the value of paintings against loans has fallen,” the Financial Times reported back in March, prior to President Trump’s tariffs tumult.  

The global volume of art-backed loans stands near $40 billion per estimates from Deloitte, compared to roughly $28 billion in 2022. Yet with prices on the fritz and collectors reluctant to hit the bid, borrowing against the assets is “a way to create liquidity out of something that’s just sitting there,” Nishi Somaiya, global head of private banking, lending and deposits at Goldman Sachs, told the pink paper.

A kind of art, in its own way.

Stocks traded virtually unchanged in a snoozer of a session featuring the lowest trading volumes on the SPDR S&P 500 ETF Trust since February, wrapping up the week with a 0.3% rise on the blue-chip gauge as last month’s stomach-turning volatility has seemingly gone by the wayside.

Treasurys likewise finished flat on the long end of the curve with two-year yields ebbing to 3.88% from 3.9% Thursday, while WTI crude stayed on the front foot at $61 a barrel and gold bounced back to $3,229 per ounce. Bitcoin ripped higher yet again at $103,300 and the VIX settled south of 22 for the first time since April 2.

- Philip Grant

Make room, dip-buying retail degens, Corporate America’s buyback machine is humming. Citing data from Birinyi Associates, Bloomberg relays that announced share repurchase programs reached $233.8 billion last month, trailing only April 2022’s $242.7 billion for the largest single month dating to 1984.  Through May 2, the year-to-date tally reached $665.8 billion, some 10% north of 2022’s prior high-water mark.

Meanwhile, the recent roller-coaster ride has done little to dissuade bulled-up individuals.  Bank of America reports that its private clients have acted as net buyers across individual stocks and exchange-traded funds for 21 consecutive weeks.  That’s roughly double the next longest winning streak since 2008.

Sticker shock awaits prospective first-time homebuyers across large swaths of the United States.  A recent report from Zillow finds that starter dwellings – defined as those in the bottom third of home values within a given area – now cost $1 million or more on average in 233 domestic markets, which include boroughs within major metropolitan areas along with large suburbs and nearby towns.  In early 2020, the count of such seven-figure regions stood at 85.  Nationwide average house prices have grown at a 45% clip over that stretch, the real estate firm finds, “packing more than a decade’s worth of typical growth into just five years.”

The post-pandemic jump in financing costs, with Freddie Mac-compiled average 30-year mortgage rates remaining near 7% versus less than 3% in late 2021, aggravates those bounding prices, further crimping affordability and pressuring activity.

U.S. homes that went under contract in March spent an average 47 days on the market per Redfin, more than double the 21-day nadir logged three years earlier. Active nationwide listings likewise reached 1.87 million, Redfin finds, the largest inventory since the bug barged in and up 27% from March 2022.

The National Association of Realtors, meanwhile, reports that so-called existing home sales for the month registered at their lowest levels since 2009.  More recently, mortgage applications for home purchases ebbed on a sequential basis for three straight weeks through April 25, the Mortgage Bankers Association finds, an ominous development as spring selling season should be swinging into high gear.

“We’re seeing more [home] builders having to lower prices and offer incentives just to get houses moving,” Ali Wolf, chief economist at construction data firm Zonda, lamented to the Financial Times yesterday. “And this should be the easiest time of year to sell a home.” 

On April 17, D.R. Horton (the nation’s largest homebuilder by sales) projected $8.7 billion in revenues with a 13.6% pre-tax profit margin for the three months through June using the respective midpoints of management’s range, far below the $9.9 billion and 14.9% consensus estimates. Peer Lennar coughed up buyer incentives equivalent to 13% of final sales prices during the fiscal quarter ending in February, its highest share since 2009 and up from just 1.5% in mid-2022.  Industry shareholders are painfully aware of today’s adverse dynamics, as the S&P Homebuilders Index has delivered a minus 9% total return over the past year, compared to positive 11% for the blue-chip gauge.

Might more lucrative opportunities present themselves beyond the 50 states? See “emerging yet invisible” in the March 14 edition of Grant’s Interest Rate Observer for a look at one far-flung real estate developer that arguably enjoys potent economic and demographic-related tailwinds.

Stocks came under moderate pressure for a second straight session as the S&P 500 clocked a 0.8% decline, while Treasurys enjoyed a bull steepening rally with 2- and 30-year yields dropping five and two basis points, respectively, to 3.78% and 4.81%. WTI crude bounced to $59 a barrel, gold continued aggressively higher at $3,428 per ounce, bitcoin remained near $95,000 and the VIX advanced towards 25.

- Philip Grant

From the Financial Times:

The surging gold price has brightened the financial prospects for those considering selling scrap gold or collectable coins, as UK high street pawnbrokers report a new wave of customers. . .

Sutton & Robertsons, which has four stores in central London and operates an online service, says it has seen a 30% increase in first-time pawnbroking customers year-on-year. About 90% of its loans are secured against gold, luxury watches and jewelry and up to 75% of the gold’s spot price can be advanced.

Jim Tannahill, managing director, says his customers — many of whom are entrepreneurs and small business owners — are aware they can borrow more against their gold items than they ever could before. H&T, the UK’s largest pawnbroker, reported record profits at its full-year results in March, saying the soaring gold price had boosted the number of new pawnbroking customers to an all-time high.

The Pentagon dodges DOGE:  The Trump administration is preparing a record $1.01 trillion national security budget over the 12 months beginning Oct. 1, Bloomberg reports. 

That sum represents a healthy 13% increase from the current period’s $892.3 billion outlay and handily the tops the $926.5 billion fiscal 2026 figure floated by the outgoing Biden administration last fall. Line items include a Golden Dome-style missile defense system and shipbuilding and nuclear weapon modernization initiatives, along with a 3.8% pay raise for military members. “Nobody’s seen anything like it,” Trump told the media in reference to the budget. “We have to build our military, and we’re very cost conscious, but the military is something that we have to build.”

For once, politicians across the Atlantic see eye-to-eye with the president.  On Wednesday, a dozen European Union countries formally petitioned Brussels to activate the so-called national escape clause governing fiscal deficits, by way of boosting their respective defense budgets. The collective entreaty directly followed a European Commission proposal to permit member states to raise defense spending by 1.5% of GDP during each of the next four years, without incurring penalties associated with fiscal shortfalls greater than 3% of output. Reuters reported late last week that Germany will likely avail itself of that opportunity.

Those initiatives stand to further bolster an industrial segment which already enjoys substantial momentum. Global military expenditures topped $2.7 trillion last year according to the Stockholm International Peace Institute, up 9.4% from 2023. For context, worldwide GDP registered at $110.6 trillion in 2024 per the IMF, up 3.9% from the prior annum.

One high-profile investor cohort is hopping on the bandwagon, as Bloomberg reported Monday that private equity firms are “scouring” the Old Continent for defense industry targets, marking a material pivot: European buyout firm spending within the category topped $1 billion in only five of the past 20 years, though that figure approaches $800 billion in the year-to-date.

“The defense sector looks like it will prove to be an exception to the broader downturn we are experiencing in dealmaking,” Frank Bretag, head of industrials advisory at UniCredit, told Bloomberg. “They are reliant on European government spending, which is only likely to tick upwards.” Referencing heretofore-sacrosanct ESG investment strictures which had served to constrain capital flows, Weinberg Capital Partners managing director Lionel Mestre added that “we think the barriers to investing in defense will progressively disappear.”

How might investors prudently position for the ongoing sea change?  See the March 14 edition of Grant’s Interest Rate Observer for a look at the global rearmament’s broad financial implications, and the Jan. 31 issue for a bullish analysis of one prominent, inexpensively valued player with a “history of beating its competitors to the contractual punch.”

A stronger-than-expected payrolls print paved the way for yet another stock market updraft, as the S&P 500 advanced 1.5% to complete a swift retracement of the early April rout.  Treasurys reacted poorly to that sturdy data, with 2-year yields vaulting a further 13 basis points to 3.83% following Thursday’s 10 basis point leap, while the long bond accelerated to 4.79% from 4.74% yesterday. WTI crude ebbed back below $59 a barrel, gold bounced to $3,239 per ounce, bitcoin consolidated recent gains at $97,000 and the VIX notched fresh one-month lows south of 23.

- Philip Grant

Tarriff man bites: President Trump unleashed another verbal broadside at Fed chair Jerome Powell during a rally in Detroit Tuesday evening, stating that “inflation is basically down and interest rates came down despite the fact that I have a Fed person who’s not really doing a good job.”  The former leveraged real estate speculator and confirmed E-Z money aficionado added that “you’re not supposed to criticize the Fed [chair], you’re supposed to let him do his own thing. But I know much more than he does about interest rates.”

While the economic implications of Trump’s trade-focused agenda remain an open question, investors have come around to the prospect of lower borrowing costs ahead. Interest rate futures now point to a 3.36% funds rate following the Fed’s scheduled Dec. 10 meeting, down some 100 basis points from the midpoint of today’s current 4.25% to 4.5% band.  That compares to a 3.9% guesstimate at the end of 2024.

Powell has thus far resisted the president’s rate-cut designs, citing the potential for tariff-induced price pressures at the Economic Club of Chicago on April 16: “Our obligation is to keep longer-term inflation expectations well anchored and to make sure that a one-time increase in the price level does not become an ongoing inflation problem.”

As Powell spurs the commander-in-chief’s scorn via insufficient dovishness, risks stemming from elevated borrowing costs appear front of mind for some of his colleagues. The Fed’s latest Financial Stability Report finds that roughly 15% of investment-grade and 27% of speculative-grade corporate debt is scheduled to mature in the next one to three years, “indicating that the pass-through of higher interest rates into debt-servicing costs may increase if borrowing costs stay elevated.”

Meanwhile, still-elevated interest costs in the context of a broader economic slowdown “could amplify existing vulnerabilities linked to high leverage and upcoming refinancing needs,” the Fed warns. 

The report goes on to flag persistently large unrealized losses lurking on bank balance sheets from underwater securities accumulated during lower prevailing interest rates.  That sum remained near $500 billion at the end of last year according to the Federal Financial Institutions Examination Council.

Of course, the Fed has its own torrents of red ink to contend with, as prodigious asset purchases undertaken during and immediately following the pandemic continue to bedevil the central bank. Unrealized losses stood at $227 billion as of April 24, up from $215 billion in late December and $132 billion at year-end 2023.  The shortfall is journaled as “earnings remittances due to the U.S. Treasury” on the Fed’s weekly balance sheet, and good thing, because total capital stands at just $44.2 billion.

Powell et al.’s hypothetical insolvency lends no public relations shine to a New York Post report detailing some eye-catching largesse.  Thus, the Fed’s renovation of its Washington D.C. headquarters is proceeding at a $2.5 billion prospective price tag, up from a $1.9 billion estimate furnished in 2019 and roughly 10 times the cost to fix up the nearby Ronald Reagan building.

The modernization plans, overseen by Powell in his prior role as Fed governor, “include rooftop garden terraces, skylights, ornate water features and a new elevator system that allows board members to be dropped off directly in the VIP dining suite,” the tabloid relays.   

Former monetary mandarin turned Dartmouth economics professor Andrew T. Levin took a dim view of the project, telling the Post that “the Federal Reserve is building the Palace of Versailles on the National Mall. Congress must put its foot down and take a closer look at this to determine what authority the Fed has to spend this [much] on its buildings.”

You can’t keep a good market down: a late push higher served to fully erase early 2% losses on the S&P 500, marking the seventh straight green finish for the broad index and wrap up a wild April close to where we began. The Treasury curve steepened in mixed trading, with two-year yields dropping five basis points to 3.6% while the long bond edged to 4.66% from 4.64% Tuesday, while WTI crude continued its leg lower at $58 a barrel and gold retreated below $3,300.  Bitcoin remained in consolidation mode near $95,000 while the VIX edged higher towards 25.  

- Philip Grant

We’ve got good news, and bad news: A Morgan Stanley-led banking consortium breathed a sigh of relief Monday, offloading the final $1.23 billion in debt tied to Elon Musk’s 2022-era buyout of social media platform X Holdings (née Twitter).

The first-lien loan priced at 9.5% and a 98 cent on-the-dollar discount, Bloomberg reports, with demand for the issue topping $3 billion. By contrast, the lender syndicate had been fielding bids closer to 60 cents on the dollar only months ago, a discount which would have spelled serious pain.

“If I were Morgan Stanley, I’d be walking on air,” retired Johns Hopkins University finance professor Jeffrey Hooke relates to Bloomberg. “Could you have hoped for a better result as a lender? I don’t think so. [They] were deep in the abyss but got rescued.”

Yet as banks finally clear their balance sheets of the $80 billion in hung deal detritus lodged during 2022’s asset price downshift, primary markets are once again providing little accommodation in the wake of the April 2 tariff “Liberation Day.”  

Domestic junk bond issuance stands at $7.9 billion in the month-to-date, Bloomberg relays today, marking the slowest April since 2008, with the $5.1 billion in new leveraged loans representing the fifth-flimsiest single supply month dating to 2013.  Banks, which had planned to underwrite $38 billion in euro- and dollar-denominated financing transactions to help fund leveraged buyouts as of the end of March, have since been obliged to house $4.6 billion in orphaned paper.

More broadly, an extended primary market freeze-out would do little to help a notably large contingent of vulnerable credits. The tally of borrowers sporting a Moody’s rating of B3 (“considered speculative and subject to high credit risk”) and below alongside with a negative outlook registered at 16% of the U.S. speculative-grade population as of March 31, little changed year-over-year and modestly higher than the 15% long-term average share.  For context, option-adjusted spreads on Bloomberg’s high-yield gauge stood at 347 basis points at the end of Q1, well below the average 480 basis point pickup seen since 1993.

“Lingering speculative-grade distress. . . could worsen if market volatility continues to constrain access to capital for the lower end of [this] population,” analysts at the rating agency wrote last week.  “These issuers will find it tough to refinance their upcoming maturities and will have to restructure untenable debt burden[s].”

Bullish conditions remain in place as stocks shook off some early weakness to post a 0.6% gain on the S&P 500, narrowing year-to-date losses to 5%. Treasurys also remained on the front foot, with 2- and 30-year yields dipping a further two and five basis points respectively to 3.65% and 4.64%, while WTI crude sank to $60 a barrel and gold pulled back to $3,320 per ounce. Bitcoin finished little changed near $95,000 while the VIX continued to deflate at 24 and change.

- Philip Grant

A buoyant bounce in skeptic-centric stocks colors this week’s potent rally: the Goldman Sachs Most Shorted Rolling Index powered higher by 4% Thursday to extend its three-day rally to 11%, Accelerate Technologies founder and CEO Julian Klymochko points out, before consolidating that advance today.  The basket of battleground names declined by 29% from its Feb. 17 peak through Monday.

Magnificent Seven mainstay Tesla sports a modest short interest of less than 3% of the outstanding float by Bloomberg’s lights, but Elon Musk’s corporate pride and joy represents an apt barometer of broader risk appetite. Shares ripped higher by 10% Friday, capping a 25%, four-day run which cleaved year-to-date losses in half.  Musk’s Tuesday comment that he will soon devote far less time to his Department of Government Efficiency side-hustle helped ignite that rally.

The electric vehicle manufacturer could seemingly use some renewed managerial focus. Tuesday also brought word that first quarter adjusted earnings dropped 40% year-over-year to $0.27 per share, trailing the $0.43 analyst consensus which Wall Street had already trimmed by 39% since New Year’s Day.

“There is currently no inflationary risk in Europe, and we can now almost say ‘mission accomplished’ when it comes to bringing inflation back to our 2% target” crowed the ECB’s Francois Villeroy de Galhau earlier this week. “The significant deceleration of wages is another proof thereof.”  

Average compensation across the euro area rose 3.1% in the year-to-date through early April per the ECB’s latest wage tracker, down from 4.8% across calendar 2024. Nominal CPI, meanwhile, grew at an average 2.3% clip across the first three months of 2025, down slightly from the 2.4% seen last year.

The Old Continent’s inflation-beating pay picture is no outlier. The Organization for Economic Co-operation and Development found last month that annual real wage growth stood in positive territory in 31 of the 34 countries under its analytical purview as of Sept. 30, though the key metric remains below early 2021 levels in 22 of those 34 nations.

Workers in the world’s largest economy are among that fortunate dozen. According to the National Bureau of Economic Research, average hourly earnings have grown at a cumulative 21.4% over the four years through March, outpacing the 19.9% uptick in the CPI over that stretch. By contrast, economist Kathryn Anne Edwards relays in Bloomberg Opinion today that pay gains materially lagged CPI growth during the high-inflation episodes of 1973 to 1983 and 1987 to 1991.

“The takeaway is just how well the economy has moved past the pandemic era’s elevated rates of inflation and how well it was able to ‘zero out’ the net effect it had on wages,” Edwards writes. “As painful as the most recent experience with inflation was, it was relatively tame given how quickly price growth receded and how fast wages recovered and even gained ground.”

The booming – if sporadically interrupted – bull market of recent years has ensured an even sunnier result for the great and good. Thus, median CEO pay among S&P 500 firms at which the boss has held the top spot for at least two years reached $16.8 million in 2024, advisory firm ISS-Corporate finds, up 7.5% from the prior annum. That metric has shown 37% cumulative growth since 2021, nearly doubling the CPI’s 20.6% advance during those four years.  

Stocks rose by 0.7% on the S&P 500 to cap a stellar week for shareholders, as the broad index shook off Monday’s drop to log a near 6%, five-day advance. Treasurys maintained moderate strength with 2- and 30-year yields each declining three basis points to 3.74% and 4.74%, respectively, while WTI crude topped $63 per barrel and gold retreated to $3,308 an ounce. Bitcoin held steady north of $95,000 while the VIX closed before 25 for the first time since “liberation day.”

- Philip Grant

Call it a temporary tattoo, via the New York Daily News:

Earth Day environmental activists defaced Lower Manhattan’s iconic Charging Bull statue Tuesday, then rushed to clean it up before cops arrived, officials said.

Videos on social media and photographs from the scene show a handful of Extinction Rebellion activists spray-painting “Greed = Death” onto the flank of the life-size Arturo Di Modica sculpture on Broadway near Morris St. in the Financial District. . .

Photos show at least one cop removing an activist who was sitting on the bull’s neck as protesters began wiping off the green paint. When more cops arrived, the Bull had been completely cleaned off. No arrests were immediately made, an NYPD spokesman said Tuesday.

If you build it, they will borrow: MSCI and Moody’s announced plans Monday to launch a risk assessment service for direct loans, potentially offering new insight into the opaque, $2.5 trillion private credit category.  

The firms will each furnish in-house data to help provide monthly snapshots of profitability, leverage and other “forward-looking assessments of the probability of default,” Moody’s managing director David Hamilton told The Wall Street Journal. Such timely data is particularly useful today, “where the uncertainty has been turned up to 11,” he added.

Indeed, recent tariff-induced spasms could serve to further burnish the appeal of closely held credits, as investors have recently turned up their noses at a competing speculative-grade product, pulling a record $6.5 billion from leveraged loans over the week ended April 9 per LSEG Lipper.  

Last Wednesday, the U.S. leveraged loan market endured its 14^th consecutive session without a new launch, marking the lengthiest primary market freeze since at least 2013 by Bloomberg’s lights and compared to 10 such deal free days across the first three months of this year.  Insufficient demand, meanwhile, obliged Wall Street banks to house $4.5 billion in debt backing a pair of acquisitions on their own balance sheets last week, marking some of the first so-called hung deals since the 2022 downturn spurred a raft of scuttled sales.

Accordingly, direct lending is “set to take [market] share again,” a Thursday analysis from Moody’s predicted, as the category represents “a refuge in turbulent times.”  With long-frozen IPO markets continuing to exert a chill over leveraged buyouts and exits alike, Moody’s “expect[s] lower-rated companies to lean more heavily on private credit lenders for financing support,” utilizing so-called net asset value lending and similar maneuvers to scare up cash. Waxing interest from institutions such as insurance companies as well as high-net worth individuals will help provide that abutment.

Investors may maintain a shine towards non-traded assets, but those affections have notably overlooked one high profile effort at exchange-traded alchemy.  The State Street- and Apollo-managed SPDR SSGA IG Public and Private Credit ETF (ticker: PRIV), which recently launched to substantial fanfare, languishes with less than $55 million in assets, little changed from its initial seeding. Daily trading volumes have likewise shriveled below 4,000 shares on average over the past week from 207,000 shares in daily average turnover during the first five trading days.

“It’s been surprising that demand hasn’t been stronger for PRIV right out of the gate,” VettaFi investment strategist Cinthia Murphy told Bloomberg Thursday. “Appetite for private assets is real, but I think we’ve learned that so are the concerns about the difference in liquidity between the ETF wrapper and the underlying private assets.”

News snippets suggesting trade-related reconciliation helped stocks stage a steep Tuesday advance, with the S&P 500 climbing 2.6% to narrow year-to-date losses below 10%. Action in Treasurys was more muted, with the long bond dropping three basis points to 4.88% while two-year yields edged to 3.76% from 3.75%.  WTI crude climbed towards $64 a barrel, gold retrenched to $3,381 per ounce after touching $3,500 during the wee hours, bitcoin remained red hot at $91,000 and change and the VIX dropped below 31.

- Philip Grant

Is it safe?  The recent Treasurys tumult is spurring queasiness in high places, as Bloomberg reports that European Insurance and Occupational Pensions Authority chair Petra Hielkema called the safe-haven status of U.S. government bonds into question last week during a gathering of financial supervisors. Uncle Sam’s obligations have long been described as “risk-free” in some corners, but the Trump administration’s chaotic, antagonistic tariffs regime potentially changes the game.

The truism that markets make opinions may also inform Hielkema’s view, as Bloomberg’s U.S. Treasury Index has returned minus 9% on a nominal basis over the past five years, lagging the negative 6% showing for its global aggregate fixed income gauge.

Conversely, the S&P 500 virtually doubled over the five years through 2024, comfortably outpacing the 74% dollar-denominated return for the MSCI World Index. On that note, foreign investors have veritably covered themselves in red, white and blue in recent years, accounting for 18% of U.S. equity market ownership as of year-end according to Goldman Sachs. That’s the highest share on record, up from about 15% in 2020 and less than 8% throughout the 1960 to 2000 epoch.

It’s raining dollars: Venture capital funding spigots flowed freely at the start of 2025, with U.S. startups gathering $91.5 billion from January through March according to a Tuesday analysis from PitchBook. That represents an 18.5% uptick from the final three months of 2024 and the second-strongest quarterly showing on record. For context, full-year activity during the 2021 everything bubble registered at $358.7 billion, putting the first quarter on pace to challenge that figure.

Of course, current sentiment is far removed from that euphoric post-plague year, with tariff-induced tumult serving to obstruct the public market exit door. “Liquidity that everyone was hoping for doesn’t look like it’s going to happen with everything that has gone on [during] the past two weeks,” PitchBook lead U.S. venture capital analyst Kyle Stanford told TechCrunch.  Unicorns (meaning private firms valued at $1 billion and above) Hinge Health, Klarna Group and StubHub have each scrapped IPO plans since President Trump’s April 2 thunderbolt.

Noteworthy concentration, meanwhile, characterized the first quarter burst in VC activity, with OpenAI’s monster $40 billion round itself accounting for 44% of the total sum. Another nine firms gathered $500 million or more, collectively representing a further 27%.  “Those deals are really masking the challenges many founders are going through,” Stanford said. “I think there are a lot of companies that are going to need to come to terms with down rounds or getting acquired for large discounts.”

Yet smaller fish have enjoyed a surprisingly hospitable waters in the stock market this year, marking a noteworthy contrast with broader conditions. Thus, 63 firms have raised $100 million or less via U.S. IPOs in the year-to-date through April 9, Bloomberg relayed, racking up a size-weighted average gain of 30%. By contrast, the Renaissance IPO Index, which tracks the largest and most liquid domestic firms listed in the past 24 months, is down 19% since the start of 2025.

“Even in a volatile market, there’s room for well-structured, smaller offerings to gain traction, particularly if they’re positioned around clear narratives [with] focused use of proceeds and a targeted investor base,” Mike Bellin, IPO services leader at PwC, told Bloomberg.

Stocks floated through a forgettable session to settle slightly higher on the S&P 500, wrapping up the holiday-shortened week with a 1.5% loss. Treasurys largely reversed Wednesdays rally with 2- and 30-year yields 3.81% and 4.8%, respectively, up four and six basis points on the day, while WTI crude maintained recent momentum with a push towards $64 a barrel and gold pulled back only slightly at $3,315 per ounce. Bitcoin rose towards $85,000 while the VIX ebbed to just below 30.

- Philip Grant

Mr. Market’s under the microscope: Treasury Secretary Scott Bessent maintained a sanguine stance in the face of last week’s outsized government bond selloff, commenting on Bloomberg Television Monday that “we are a long way” from requiring an official response. Even so, Washington has “a big toolkit we can roll out,” he declared, pointing to enhanced buybacks of less-liquid, off-the-run Treasurys as one potential option.  

In turn, Deputy Treasury Secretary Michael Faulkender floated the prospect of easing the supplementary leverage ratio Tuesday, a tweak which would permit U.S. banks to add more Treasurys to their own balance sheets (that remedy was indeed employed on a temporary basis during the 2020 tumult).  

Such trial balloons are telling, as governments and investors alike struggle to adjust to the Trump administration’s tariffs regime. “The U.S. Treasurys market may have lost – at least temporarily – some of its legendary defensive characteristics,” MFS Investment Management senior managing director Benoit Anne mused to Bloomberg. “In the face of higher risk aversion, Treasurys do not seem to offer currently the protection that they used to.”

A suddenly-parched liquidity picture speaks to those concerns, as the head of Treasury trading at a high-profile U.S. fund told the Financial Times that market depth (as in the quantity of executable bids and offers at a given time) had shrunk by 80% from its typical baseline by the end of last week. “If a steep breeze blew through the Treasury market today, rates would move a quarter point,” quipped Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott.

Those crosswinds duly ripple across the corporate credit complex. Average bid-to-ask spreads have lurched wider across the investment-grade realm in recent weeks, Apollo-compiled data show, with off-the-run bonds – defined as those issued more than two years ago with a deal size of less than $900 million – seeing their gap nearly double to 20 basis points, the widest since the Covid crucible. 

That cohort, which accounts for half of the IG market by count, “has become virtually untradable and [is now] effectively a buy-and-hold instrument,” concludes Apollo’s Torsten Slok.

Some investors have instead opted to hit the bricks, pulling a net $6.08 billion from short- and intermediate-duration IG bonds over the seven days through last Wednesday according to LSEG Lipper, the largest weekly outflow since May 2022.

Meanwhile, the recent rebound in equity benchmarks represents a needed reprieve for the suddenly-besieged speculative grade credit realm, with yields on Bloomberg’s junk bond gauge plunging 20 basis points Monday to 8.38%, the best single-day showing since late 2023. That screaming rally comes on the heels of a major cash migration: U.S. high-yield bond funds logged a $9.6 billion outflow during the week through April 9, the largest since early 2023, with leveraged loan funds losing a net $6.3 billion, nearly doubling the previous record figure from December 2018.  

Primary markets have likewise remained in deep freeze as spring unfolds, with issuance across high-yield and leveraged loans at just $13 billion in the month through Friday per LSEG, compared to an average $52.5 billion seen over the same period during the past three years. This morning, liquified natural gas concern Venture Global Plaquemines brought $2.5 billion of double-B/double-B-plus-rated senior-secured paper to market, representing the first high-yield sale since President Trump’s April 2 tariff announcement.

Wall Street is undoubtedly watching that deal closely, as the FT reported on Monday that the likes of Citigroup, Morgan Stanley and JPMorgan Chase have each pulled back on planned bond and loan deals in recent sessions on account of weak demand. “Some existing commitments could get stuck on bank balance sheets,” Canyon Partners CIO Jeff Kivitz warned the pink paper, adding that lenders appear “less willing to provide indications for new commitments amidst the volatility.”

Stocks fluttered lower by 0.2% on the S&P 500 in the first low-key trading session since Trump’s early April thunderbolt, while 10-year yields ticked to 4.35% from 4.38% Monday with the two-year note holding at 3.84%. WTI crude finished little changed at $61.50 a barrel, gold rebounded to $3,228 per ounce, bitcoin edged below $84,000 and the VIX retreated to 30.

- Philip Grant