Rich World’s Rate-Cut Momentum Is Fading Away

The corporate-bond market is experiencing a resurgence of investor enthusiasm, despite underlying risks that remain unaddressed. This shift indicates a temporary uplift in sentiment among corporate-bond investors, as they navigate the complexities of the current financial landscape.

As 2026 approaches, Wall Street is shifting its focus away from technology giants that have dominated the bull market, indicating a potential change in growth strategies. This transition suggests that investors may be looking for more traditional sectors to drive market performance in the coming year.

A prolonged period of elevated long-term bond yields is increasing borrowing costs globally, as investors seek higher compensation for government debt amid persistent budget deficits and inflation concerns. This situation raises questions about central bank independence and its impact on monetary policy.

U.S. stocks experienced a significant decline as a selloff in technology shares deepened, reflecting negative sentiment in the market. Analysts Romaine Bostick, Katie Greifeld, Carol Massar, and Tim Stenovec provided insights during Bloomberg's closing bell coverage, highlighting the impact of this downturn on investor confidence.

Wall Street has faced significant volatility throughout the year, with analysts anticipating a major shift in market dynamics. This uncertainty has left investors grappling with fluctuating trends and mixed signals, contributing to a climate of apprehension in financial markets.

Bloomberg Markets on December 12, 2025, featured discussions on market movements across various global asset classes, with insights from notable guests including BitGo Co-Founder and CEO Mike Belshe, along with Bloomberg analysts Ed Ludlow, Keith Naughton, Dave Lee, and Poonam Goyal.

Oracle Corp.'s new investment-grade notes are trading at levels typically associated with junk bonds, driven by delays in data center completions and concerns over profitability from its artificial intelligence investments. This shift reflects a significant deterioration in the company's credit risk, which has reached its highest point since 2009.

First Brands is working to reassure creditors following a significant decline in the value of its $1.1 billion rescue loan, which has been impacted by ongoing bankruptcy proceedings. The company has filed for Chapter 11 and is attempting to unlock funds from receivables that are currently inaccessible.