An engineering analysis by the National Highway Traffic Safety Administration is looking into possibly defective Takata air bag inflators in 30 million vehicles from model years 2001 to 2019, a government document shows. NHTSA says further evaluation is necessary to determine the safety of the air bag inflators, which contain a desiccant, or drying agent.
Investment funds need to be reformed to prevent the rapid outflow of capital during times of market stress from destabilizing the financial system, the International Monetary Fund has said. Regulators should think about changing rules that allow investors to make daily withdrawals from almost every type of mutual fund, the IMF said.
Deepening concerns about financially distressed real estate company China Evergrande Group, the world's most indebted property company, sent the Hang Seng Property Index plummeting as much as 5.9% today, the biggest single-day drop in more than a year. Evergrande shares gave up a further 13% of their value, while the city's broader market benchmark shed 3.3%.
The mountain of buyout debt that has been piling for months is set to start coming to the high-yield market this week. Banks have already started selling $7 billion of leveraged loans to finance the buyout of Medline Industries and this week private equity firms are expected to start offering $3.8 billion of secured bonds and $4 billion of unsecured notes that are part of the Medline financing package.
Fund managers are increasingly embracing eurozone long-dated bonds rather than US Treasury securities, despite the European Central Bank scaling back its emergency asset buying. Fixed-income investors expect the economy to recover faster in the US than the eurozone and force the Federal Reserve to roll back asset buying and raise interests rates more quickly than the ECB.
The conservative candidate campaigning to replace departing German Chancellor Angela Merkel said he believes the European Central Bank will be able to maintain price stability. "I'm sure the ECB will particularly fulfil its core task of monetary stability ... but this also means that when interest rates rise again the debt burden becomes an even bigger problem for the state," he said.
As the Federal Reserve's meeting this week approaches and traders speculate about the likely pace of the central bank's tapering of its bond buying, emerging-market bond sales have sprung back to life. In recent weeks bond buyers have demonstrated a strong appetite for the debt of countries such as Chile, Hungary, Indonesia, Serbia and Turkey, with $36 billion in new issuance over the past week.
For the first time since 2005, the value of corporate debt available to trade in Europe is getting smaller, a situation that restricts liquidity and makes it difficult to price risk. "It's getting to a situation where the credit market will be almost broken," said James Vokins, head of investment-grade credit at Aviva Investors,
Companies are increasingly warning the markets the profits they will post at the end of the current reporting period will fall short of expectations. So far, the trend is limited largely to materials producers that have faced problems due to supply-chain disruption, but a Bank of America study suggests the issue could spread to the broader market.
A proposal to revoke a capital gains tax break enjoyed by exchange-traded funds has run into vocal opposition from two of the world's biggest financial firms, State Street and BlackRock. BlackRock said the measure by Rep. Ron Wyden, D-Ore., would "raise costs and reduce returns for long-term investors and retirement savers."
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