Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Corporate Bonds Foreshadow U.S. Bank-Stock Gains: Chart of Day

U.S. bank stocks are poised for gains because they have only begun to catch up with a surge in corporate bonds, according to Ian Scott, a global strategist at Nomura International Plc.

The CHART OF THE DAY compares the industry’s stock performance relative to the Standard & Poor’s 500 Index with a Moody’s Investors Service index of yields on Baa-rated corporate debt, the lowest investment-grade category. The latter is shown in reverse because falling yields translate into rising prices.

“Bank stocks have hardly responded” to the rally in bonds, Scott wrote in an April 16 report, even though the S&P 500 Banks Index has more than tripled since March 2009. This is the industry gauge used in the chart, which is similar to one published in his report.

The group fared much better in the early 1990s, when the stocks kept pace with corporate bonds as banks rebounded from real-estate losses, in his view.

Rebounds in mortgage-backed securities and leveraged loans, made to debt-laden companies, also signal that the rally in U.S. banks’ share prices “has further to run,” the report said.

“U.S. credit measures have improved across the board,” Scott wrote. “None of these improvements has yet to be reflected in either the absolute or relative performance of bank stocks.” He recommends that investors have more money in global banks than their weighting in benchmark indexes would suggest.

(To save a copy of the chart, click here.)

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.