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Sustainable Finance Bonds Up 96% Y/Y

Sustainable Finance Bonds Up 96 Percent YoY

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This article was originally published by Value Walk.

“Record-breaking 2020 Sustainable Finance issuance levels continue to be built upon by companies and government bodies around the world.  We’re seeing a resurgent Green Bonds market powered by the Technology, Consumer Staples and Industrials sectors with focus on issuance earmarked for Sustainable and Social purposes, robust equity capital raising and lending.  The global capital markets have been remarkably resilient this year and the growing presence of sustainable businesses, innovative structures and use of proceeds will be a hallmark of 2020,” comments Matt Toole, Director of Deals Intelligence, Refinitiv.

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Q3 2020 hedge fund letters, conferences and more

Download the full Sustainable Finance Review.  Highlights below.

Refinitiv Deals Intelligence | 20Q3 Sustainable Finance Bonds Review

All-Time Record: Sustainable Finance Bonds Total US$357.5bn, 96% Increase YoY; 101% Increase in Volume YoY

Highlights - Debt Capital Markets

  • Sustainable Finance bonds totalled US$154.8 billion during the third quarter of 2020, up 13% compared to the second quarter of 2020 and more than double the proceeds registered during the third quarter of 2019.
    • 20Q3 marks the highest quarterly total, by proceeds and number of issues, since our records began in 2015
    • All-time record: Sustainable Finance bonds totalled US$357.5 billion during the first nine months of 2020, up 96% YoY.
  • Green bond issuance accelerated during the third quarter, reaching an all-time record of US$76.5 billion from 171 issues.
    • Driven by an increase in capital raising by sovereigns, multilaterals and banks for Covid-19 relief and recovery efforts, the Sustainability and Social bond categories each surpassed US$30 billion for the second consecutive quarter.
  • US$84.5 billion worth of Social bonds were recorded globally during the first nine months of 2020, nearly 8x the total raised YoY
    • Social bond issuance accounts for almost one-quarter of the sustainable bond market during 2020, compared to 6% YoY
  • Sustainability bond issuance reached US$97.0 billion during the first nine months of 2020, more than triple YoY
    • The number of Sustainability bonds increased 101% compared to a year ago.
  • Corporate issuers accounted for 49% of Sustainable Finance bonds during the first nine months of 2020, while Agency and Sovereign issuers accounted for 51% of overall activity, the highest percentage since sustainable records began in 2015.
  • 2020 Largest regional market for Sustainable Finance bonds: Europe 48%, Americas 28%, Asia Pacific 18% market share
  • Top spot for sustainable bond underwriting: HSBC with 6.3% market share, an increase of 0.8 market share points compared to a year ago followed up JP Morgan and Citi
 

Syndicated Loans

  • Sustainable lending totalled US$114.5 billion during the first nine months of 2020, a 1% increase YoY, while third quarter sustainable lending activities totalled US$30.1 billion, a 21% decline compared to 20Q2 and the slowest quarter for the sustainable category since 18Q3
  • European borrowers accounted for 60% of overall sustainable lending during the first nine months of 2020, led by facilities for Italy’s Enel SpA, Denmark’s AP Moller-Maersk and Germany’s Traton SE and Siemens Gas & Power.
  • Sumitomo Mitsui Financial Group took the top spot for sustainable syndicated lending during the first nine months of 2020, with 5.8% market share, an increase of 2.6 market share points, followed by BNP Paribas 5.4%, and Mizuho Financial Group and Mitsubishi UFJ Financial Group, each with 4.8%.

Equity Capital Markets

  • All-time record: ECM activity for sustainable companies totalled US$9.7 billion during the first nine months of 2020, a 38% increase YoY 
  • All-time quarterly record: 20Q3 sustainable equity issuance totalled US$5.6 billion, a more than three-fold increase compared to 20Q2
  • Overall ECM activity during first nine months of 2020: the Americas accounted for (77%), Asia Pacific (12%) and Europe (11%).
    • BofA Securities, Morgan Stanley and JP Morgan topped the list of bookrunners for sustainable equity offerings during the first nine months, each with more than 15% market share.
Sustainable Finance Bond

Mergers & Acquisitions

  • Two-year high: M&A activity involving sustainable companies totalled US$21.6 billion during the first nine months of 2020, a 7% increase YoY.
  • 350 sustainable deals were announced during the first nine months of 2020, a 3% increase compared YoY
    • By number of deals: China (17%), United States (10%), India (8%) and Italy (7%).
    • By deal value: Asia Pacific (40%), Europe (39%), and Americas (20%).
  • Goldman Sachs leads the advisory league tables advising on 8 deals valued at US$6.1 billion.
Sustainable Finance Bond Sources: Data/charts: “Refinitiv” and commentary: “Matt Toole, Director of Deals Intelligence, Refinitiv Learn more about Refinitiv Capital Markets Insights, Equity Capital Markets, Debt Capital Markets and Deals Intelligence.
 
The post Sustainable Finance Bonds Up 96 Percent YoY appeared first on ValueWalk.

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Economics

Dow Jones, the S&P 500, and Nasdaq price forecast ahead of a busy week

Wall Street’s three main indexes had a third straight week of gains for the first time since early July; the S&P 500 index rose 1.6%; the Dow Jones Industrial Average advanced 1.1%, while the Nasdaq Composite Index gained 1.3%. Disappointing quarterly

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Dow Jones, the S&P 500, and Nasdaq price forecast ahead of a busy week

Wall Street’s three main indexes had a third straight week of gains for the first time since early July; the S&P 500 index rose 1.6%; the Dow Jones Industrial Average advanced 1.1%, while the Nasdaq Composite Index gained 1.3%.

Disappointing quarterly reports from Snap and Intel put pressure on the S&P 500 and Nasdaq on Friday, but both indexes continue to trade in a bull market.

The U.S. economy remains stable, and according to research company Refinitiv, third-quarter S&P 500 earnings should show a 34.8% rise from a year ago, up from an expected 31.9% rise at the beginning of the week.

Results from many big companies provided a strong start to third-quarter earnings, and investors’ focus will remain on the third-quarter earnings season because many companies have yet to publish their reports.

Next week, General Electric, Advanced Micro Devices, Alphabet Inc (GOOG), Microsoft, Twitter, Visa, Coca – Cola, Boeing, Facebook, McDonald’s, Ford, and Amazon are among the companies scheduled to report quarterly results.

Fed Chair Jerome Powell said on Friday that the U.S. central bank is “on track” to begin reducing its purchases of assets and though monetary tightening is usually seen as a drag on stocks, some investors view the Fed’s stance as a vote of confidence for the U.S. economy.

Tom Mantione, managing director of UBS Private Wealth Management, said:

Stocks are climbing to new highs, and anytime the market is trading at or near its all-time high, it is not unusual to see a little bit of more intraday volatility…and it should not concern investors.

Several FED officials also expressed concerns about high inflation which could force the U.S. central bank to raise rates sooner than anticipated. It is also important to say that the Initial Jobless Claims for the week ended October 15 fell to 290K, which is the lowest number since the pandemic began.

On the other side, supply chain issues represent a serious problem for the economy, but the pace of recovery is likely sufficient for Fed officials to follow through on plans to announce tapering at the November FOMC meeting.

The upcoming week will be a busy one; the U.S. will publish the preliminary estimate of Q3 Gross Domestic Product while the quarterly results of many big companies will take center stage.

S&P 500 up 1.6% on a weekly basis

For the week, S&P 500 (SPX) booked a 1.6% increase and closed at 4,544 points.

Data source: tradingview.com

The S&P 500 index continues to trade in a bull market, but if the price falls below 4,400 points, it would be a “sell” signal, and we have the open way to 4,200 points. The current resistance level stands at 4,600 points, and if the price jumps above this level, we have the open way to 4,700 points.

DJIA up  1.1% on a weekly basis

The Dow Jones Industrial Average (DJIA) advanced 1.1% for the week and closed at 35,677 points.

Data source: tradingview.com

DJIA continues to trade near record highs; still, if the price falls below 34,000 points, it would be a strong “sell” signal.

Nasdaq Composite up 1.3% on a weekly basis

For the week, the Nasdaq Composite (COMP) booked a 1.3% increase and closed at 15,090 points.

Data source: tradingview.com

If the price jumps above 15,500 points, it would be a bullish confirmation for this index. The current support level stands at 14,500 points, and if the price falls below this level, it would be a strong “sell” signal.

Summary

Wall Street’s three main indexes had a third straight week of gains, and Fed Chair Jerome Powell said on Friday that the U.S. central bank is “on track” to begin reducing its purchases of assets. The upcoming week will be a busy one; the U.S. will publish the preliminary estimate of Q3 Gross Domestic Product while the quarterly results of many big companies will take center stage.

The post Dow Jones, the S&P 500, and Nasdaq price forecast ahead of a busy week appeared first on Invezz.

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Economics

Port Congestion Could Be Worse Than “Lehman Crash”, Flexport CEO Warns 

Port Congestion Could Be Worse Than "Lehman Crash", Flexport CEO Warns 

"The ports shutting down is worse than Lehman Brothers failing. Both can lead to catastrophic failures of all counterparties depending on them. But with Lehman, the…

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Port Congestion Could Be Worse Than "Lehman Crash", Flexport CEO Warns 

"The ports shutting down is worse than Lehman Brothers failing. Both can lead to catastrophic failures of all counterparties depending on them. But with Lehman, the government could just print tons of money to flood the banks with liquidity," Ryan Petersen, chief executive officer of logistics company Flexport, warned Friday after touring logjammed U.S. West Coast ports. 

Petersen said his firm hired a boat captain to tour Los Angeles and Long Beach ports, which account for 40% of all shipping containers entering the U.S. He said during the three-hour loop through the ports, passing every single terminal, "we saw less than a dozen containers get unloaded." 

He said the twin ports have hundreds of cranes but only "seven were even operating and those that were seemed to be going pretty slow." He said the bottleneck that everyone now agrees on is "yard space" and that "terminals are simply overflowing with containers, which means they no longer have space to take in new containers either from ships or land. It's a true traffic jam."

"The bottleneck right now is not the cranes. It's yard space at the container terminals. And it's empty chassis to come clear those containers out," he said.

The twin ports appear to be at a standstill even though President Biden issued a directive last week to keep them operating on a 24/7 basis. But that seems to be not enough because the president has weighed the use of the National Guard to alleviate constraints. 

Petersen suggested a "simple plan" for the state and federal government to partner with ports, truckers, and everyone else in the chain to create temporary container yards that stack empty ones up to six high instead of the limit of two. This would "free up tens of thousands of chassis that right now are just storing containers on wheels. Those chassis can immediately be taken to the ports to haul away the containers."

He said it was necessary to correct this bottleneck because it's a "negative feedback loop that is rapidly cycling out of control that will destroy the global economy if it continues unabated."

Goldman Sachs' Jordan Alliger agreed and told clients to monitor the ports. He said, "the most notable congestion indicator is the number of container ships anchored waiting to offload their freight returned to 70 ships anchored on October 18 after hitting a record of 73 on September 19, compared to their pre-pandemic average of 0-1 ships."

Petersen is right. The monetary wonks at the Federal Reserve are way over their heads. They can't print their way out of this shipping crisis they helped sparked by unleashing unprecedented monetary injections into capital markets over the last 19 months. The circulatory system of the global economy risks breaking as port congested worsens. 

Tyler Durden Sun, 10/24/2021 - 14:00

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Economics

At the Edge of Chaos: Market Breadth Breakout Signals Returning Uptrend as Options Market Remains Doubtful of Rally

Something’s got to give in the markets. And it may not take long before the next long term trend becomes apparent. The most reliable market indicator since 2016, the New York Stock Exchange Advance Decline line (NYAD), see below for full details, exploded

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Something's got to give in the markets. And it may not take long before the next long term trend becomes apparent.

The most reliable market indicator since 2016, the New York Stock Exchange Advance Decline line (NYAD), see below for full details, exploded to a new all time high on 10/20/21, and did not fall apart by week's end. This is signaling that for now, against all odds, despite the Fed's confirmation that the QE tapering is coming, the uptrend for stocks is back.

More interesting, as I will detail below, is the fact that even though stocks have broken out, options players remain very skeptical of the gains and bond traders are expecting the Fed's actions to slow the economy.

MELA Test Straight Ahead

The likelihood of a major move in the MELA system, where the markets (M), the economy (E), people's life decisions (L) and the algos interact (A), is approaching.

I know this sounds a bit confusing. But here's what seems to be happening. As I've noted here before, the bond market is torn between the sellers, who are afraid of inflation, and the buyers, who are betting that when the Fed tapers the economy will tumble.

Lately, the sellers have been in control of the bond market, as evidenced by the rising yield on the U.S. Ten Year note (TNX). This rise in market interest rates has put a damper on the stock market, which in true MELA fashion, has put a bit of crimp on the economy, especially areas such as home buying, as people have become cautious and slowed down their purchases. All of which has been amplified by the algos and created a choppy trading range for stocks.

Until Friday, that is, when Fed Chairman Powell noted that it was "time to taper," and TNX rolled over after running into intermediate-term resistance near the 1.7% yield area as the buyers came in.

So now we have an interesting setup. With less than a week before November, the month in which the Fed has signaled it will start its taper, bond traders are betting that the Fed's actions will hurt the economy while stock traders are betting that the bull trend in stocks has returned.

How is this possible?

Remember that the stock market is the centerpiece of MELA since it is the source of wealth for a large number of people via their 401 (k) plans and other stock trading related venues. In other words when the 401 (k) does well, as in periods when stocks rise, people feel wealthy and buy things.

And what do stocks like best? They love lower interest rates. All of which means that if the Fed tapers and things slow down, stock traders are betting that the Fed will likely have to restart QE.

In other words, it's all about the Fed and how the bond and stock markets respond because it will all play out in MELA.

It's time to buckle up.

"The edge of chaos is a transition space between order and disorder that is hypothesized to exist within a wide variety of systems. This transition zone is a region of bounded instability that engenders a constant dynamic interplay between order and disorder." Complexity Labs

I own shares in APP as of this writing. For detailed option strategies and stock picks chose a FREE trial to Joe Duarte in the Money Options.com. Click here. You can also check out my latest video which expands on these strategies here.

Why Astra Zeneca's Monoclonal COVID Antibody Gamble May Pay Off

Shares of pharmaceutical giant Astra Zeneca (AZN) have been under quiet accumulation of late and recently scored a price breakout.

The breakout is interesting for sure, mostly because AZN's COVID vaccine has been associated with rare but serious complications. At the same time, other COVID vaccines have also been associated with complications. All of which means that even though the vaccines have been useful against the pandemic, there is clearly a treatment niche that needs filling in the fight against the virus.

Certainly, AZN has a top notch research team, which is why it's no surprise that they have developed a new and very promising monoclonal antibody to treat COVID infections which may fill that niche. Of course, at first glance they seem to be getting to the party a bit late given that Eli Lilly (LLY) and Regeneron (REGN) already have very successful COVID antibodies on the market.

But here is what could be the game changer; AZN's antibody may be useful as a preventive treatment for COVID, meaning that it is a potential vaccine-like product, although not likely a replacement. At least that's what the studies suggest, and what the company is trying to convince the FDA and global health agency approval committees of.

Put another way; AZN may have an alternative or an adjunct to COVID vaccines which would not likely replace vaccines but would give physicians another treatment option based on well accepted clinical situations such as patients at high risk of vaccine reactions. In addition, the AZN antibody can be administered on an outpatient basis, reducing costs and keeping hospital beds open for emergencies.

Moreover, the stock is also attractive based on the fact that AZN has several blockbuster drugs that have been flying under the radar of late such as its diabetes treatment Forxiga and several key anti-cancer drugs which are fueling year over year sales gains above 30% and an earnings growth rate of 20%.

Technically, AZN has cleared long term resistance above $61, where it may consolidate in the short term as traders wait for approval news on the antibody. But the stock is in an excellent setup for sure as Accumulation Distribution (ADI) has flattened out which suggests that short sellers are exhausted while On Balance Volume (OBV) has been moving higher, confirming that buyers have been using recent price dips to move into the stock.

I own shares in AZN as of this writing. For detailed option strategies and stock picks chose a FREE trial to Joe Duarte in the Money Options.com. Click here.

Options Traders Just Don't Trust this Market

In what may be a bullish contrarian sign, put volume continues to outshine call volume at key strike prices on the SPY options. What's most interesting is that even as the market's breadth (see below) has improved, option traders remain skittish and continue to buy puts just below the most current market price.

Of course, the precise nature of this development suggests that algos are hedging their bets. And while market maker algos hedge their bets based on order flow, CTA algos (quant funds) make bets on technical analysis based support and resistance levels.

It's not clear whether what we're seeing is the market makers or the CTAs. If it's the CTAs the odds may favor a rally if the market breakout continues as they will have to cover their shorts further. If the market maker algos are hedging, though, it could mean that the order flows are bearish and that this rally could be short lived.

To get the latest up to date information on options trading, check out "Options Trading for Dummies", now in its 4th Edition – Available Now!

# 1 New Release on Options Trading

Market Breadth Finally Breaks Out

After a nearly five month trading range the stock market's breadth finally broke out with the New York Stock Advance Decline line (NYAD) moving above recent and multiply times tested resistance level. Thus, until proven otherwise the uptrend has been re-established.

The S & P 500 (SPX) is hovering near its all time highs and trading above 4500 as well as its 20,50, 100, and 200 day moving averages with good confirmation from Accumulation Distribution (ADI) and On Balance Volume (OBV).

The Nasdaq 100 index (NDX) did not fare as well as SPX as it did not deliver an all time high and ended last week on a much weaker note.

Meanwhile the S & P Small Cap 600 index (SML) is knocking on the door of a potential breakout, but still remains somewhat further away from its all time highs than NDX and SPX.

Good news! I've made my NYAD-Complexity, Chaos chart (featured on my YD5 videos) and a few other favorites public. You can find them here.

Joe Duarte

In The Money Options


Joe Duarte is a former money manager, an active trader and a widely recognized independent stock market analyst since 1987. He is author of eight investment books, including the best selling Trading Options for Dummies, rated a TOP Options Book for 2018 by Benzinga.com - now in its third edition, The Everything Investing in your 20s and 30s and six other trading books.

Meanwhile, the U.S. Ten Year note yield (TNX) is trading in a The Everything Investing in your 20s & 30s at Amazon and The Everything Investing in your 20s & 30s at Barnes and Noble.

A Washington Post Color of Money Book of the Month is now available.

To receive Joe's exclusive stock, option, and ETF recommendations, in your mailbox every week visit https://joeduarteinthemoneyoptions.com/secure/order_email.asp.

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