Hedge Funds’ Leveraged Bond Trades Draw Regulator Scrutiny

Stocks rebounded as investor sentiment improved following a stabilization in Bitcoin prices, which had been experiencing a downward trend. This shift helped ease the risk-off mood that had dominated the markets recently. Boeing also saw a significant increase in its stock price, buoyed by positive forecasts regarding its free cash flow.

A six-year-old federal program aimed at assisting the smallest American businesses in reducing debt has reached a record number of bankruptcy filings, according to court data. This surge in cases highlights the ongoing financial struggles faced by mom-and-pop businesses across the country.

Bitcoin halted its recent decline, and stocks showed a cautious rebound as the global flight from risky assets began to ease. The Bank of England adjusted its estimate for the Tier 1 capital requirements for UK banks to approximately 13% of risk-weighted assets, while also warning of potential risks associated with hedge fund strategies like the basis trade.

The volume of Russian crude oil on tankers has increased by over 20% since the end of August, indicating a surge in exports despite ongoing delivery challenges. This rise comes amid geopolitical tensions and sanctions affecting the global oil market.

The Bank of England has issued a warning regarding the increasing risks associated with the basis trade strategy employed by hedge funds, which has seen net gilt repo borrowing reach nearly £100 billion in November, the highest since data collection began. This strategy involves borrowing cash against gilts as collateral, raising concerns about potential market volatility if these trades unwind disruptively.

Grace Peters, Co-Head of Global Investment Strategy at JPMorgan Private Bank, highlighted concerns that the US economy may be weaker than perceived, despite significant AI capital expenditure and increased spending from high-income consumers. She pointed to rising youth unemployment as a potential factor influencing a Federal Reserve rate cut in December.

Wealthfront Corp. and its shareholders are aiming to raise $485 million as the robo-advisory firm prepares to go public. This move marks a significant step for Wealthfront in the financial markets, reflecting its growth and the increasing interest in automated investment services.

Gunvor Group's new CEO announced that the company's earnings have rebounded from a disappointing first half of the year, attributed to improved trading opportunities and strong oil-refining margins. This announcement follows the company's recent staff buyout, indicating a strategic shift in management and operations.