MarketAxess profit rises on demand for high-grade credit, government bonds

MarketAxess Holdings

06/08/2024 12:27

Aug 6 (Reuters) - MarketAxess Holdings'  MKTX.O 
second-quarter profit rose 8% due to robust trading activity in
high-grade corporate debt and government bonds, it said on
Tuesday.
    
    WHY IT'S IMPORTANT
    The fixed income-trading platform's results offer an insight
into the bond market, widely viewed as a more reliable indicator
of recession than the stock market. 
    Shifting expectations of a rate cut have made it crucial to
gauge such trends. 
     
    CONTEXT
    Demand for investment-grade corporate debt has grown ahead
of an expected cut later this year, as investors rush to lock-in
current interest rates for years to come. 
    Geopolitical tensions and worries about the economy have
also boosted appetite for safe haven assets like Treasuries and
other government bonds.
    MarketAxess lost some share of the junk bond market,
however, since the extra yield offered by these securities fell
short of investors' hopes.
    
    BY THE NUMBERS
    The company's net income was $65 million, or $1.72 per
share, for the three months ended June 30, compared with $60
million, or $1.59 per share, last year.
    The New York-based company's shares have lost 24% so far
this year versus rival Tradeweb Markets'  TW.O  18% gain.

 (Reporting by Niket Nishant in Bengaluru; Editing by Maju
Samuel)
 ((Niket.Nishant@thomsonreuters.com;))