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Corporate bonds from the big money-center banks are rallying in concert with their stock prices amid more bullish sentiment on Wall Street about potential interest-rate cuts in 2024.
Also read: Wall Street divided on how many Fed rate cuts there will be in 2024
Corporate-bond prices for JPMorgan Chase & Co.
JPM,
and Morgan Stanley
MS,
outpaced those for Citigroup Inc.
C,
Goldman Sachs Group Inc.
GS,
and Bank of America Corp.
BAC,
into positive territory, including an upward jump on Wednesday, according to data from BondCliQ Media Services, as shown by the chart below.
The prices of JPMorgan and Morgan Stanley bonds outpaced those of Bank of America, Citigroup and Goldman Sachs during Wednesday’s rally.
BondCliQ Media Services
Equity prices for the banks have been on the rise as well, including a 2.1% rise for JPMorgan Chase on Thursday, a gain of 5.7% for both Goldman Sachs and Bank of America, and gains for Citigroup of 3.3% and Morgan Stanley of 6.6%.
While bond prices have risen, yields have come down, and the spreads against yields on 10-year Treasuries
BX:TMUBMUSD10Y
have tightened in a sign of healthy demand for money-center bank debt, as this chart shows:
Spreads against 10-year Treasurys have tightened for bank bonds in recent days.
BondCliQ Media Services
Spreads for Goldman Sachs and Bank of America have fallen more dramatically than for JPMorgan Chase, Morgan Stanley and Goldman Sachs.
Money has flowed out of JPMorgan Chase, while investors put more money to work with Goldman Sachs than with the other four money-center banks.
Money has flowed into the big money-center banks, except for JPMorgan Chase.
BondCliQ Media Services
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