Author: Candour Capital

The U.S. stock market, particularly the S&P 500 index, appears to be at an unprecedented peak. The latest figures indicate that the P/E ratio of the S&P 500 stands at 27.58*, which seems to be well above the historical average of 16.07*. Such elevated P/E ratios might often signal potential overvaluation, and historically, these levels have frequently been followed by market corrections. Despite this high market valuation, recent surges in the stock market might lack robust support from corporate earnings. The gap between actual earnings growth and market price increases seems to have heightened market instability. Although many large corporations have reported earnings…

NAB has launched a new 15-year AUD Tier 2 subordinated bond with a 10-year non-call feature. The bond offers a fixed coupon of 6.342% p.a. for 10 years, paid semi-annually. This is noteworthy given that the demand for Australian bank Tier 2 bonds significantly exceeds the supply. The issue spread of 200 bps over the asset swap spread reflects a wider margin compared to similar bonds issued by other major Australian banks last year. Comparable bonds from these banks typically trade around ASW+165 basis points, driven by strong demand. Another Westpac bond trades at the highest margin of +190 basis…