17 December 2018 FT — Articles to Read

17 December 2018


Question: What is the most expensive zip code in the U.S.?  Median Sales Price for a home?  Median household income?


US credit markets dry up as rate rises and volatility rattle investors – Pg. 1

–          US credit markets are grinding to a halt, with fund managers refusing to bankroll buyouts and investors shunning high-yield bond sales as rising interest rates and market volatility weight on sentiment

–          Not a single company has borrowed money through the $1.2tn US high-yield corporate bond market this month.  If that drought persist, It would be the first month since November 2008 – when global credit markets froze up after the collapse of Lehman Brothers – that not a single high-yield bond priced in the market (Prof Note: This is profound…pay attention!)

–          A prolonged period of low interest rates since the financial crisis a decade ago has seen companies binge on cheap debt

–          As prices in loan market have fallen, banks that were committed to financing highly leveraged buyouts this year have struggled to find investors to back the deals


Wall Street banks to reduce bonuses as tough fourth quarter hits earnings – Pg. 13

–          ….low single-digit increases to their bonus pools

–          Investment bank revenues – including sales and trading and advising companies on deals and capital raising – for the top five US banks were up around 8% in the first half of the year, driven by booming equities markets.  They rewarded banks with a 16% rise in equities trading revenues and a 20% increase in fees for advising clients on IPOs, …


US retail shares face sharp sell-off – Pg. 14

–          Shares in US retailers are on course for their biggest quarterly sell-off since the financial crisis, putting the sector at the sharp end of Wall Street’s mounting concerns about the global economy and President Donald Trump’s trade wars

–          …S&P’s index of 95 leading listed retailers has dropped 17% so far this quarter

–          Concerns include retailers being forced to shed stock at hefty discounts, in part because they have accelerated shipments through ports to avoid being subjected to higher tariffs, which the Trump administration has since put on hold

–          The sell-off has erased all gains from earlier this year, when investors drove a rally in retail stocks on signs that a strong US economy and tax cuts were helping bricks and mortar companies deal with the online threat

–          Weak economic data from Europe and Asia – figures on Friday showed retail sales in China grew at the slowest pace in 15 years in November – have added to fears about a global downturn

–          Amazon shares have dropped 20% for the quarter so far, paring its market capitalization to $778bn


Answer: 94301, Palo Alto, CA; Median Sales Price: $3,750,000; Median Household Income: $146,488