A Sudden Bond Binge on Wall St. Reflects Rising Optimism

Companies have rushed to borrow tens of billions of dollars this week, a sign that optimism about the outlook for the economy is beginning to take hold.

Dozens of big companies, from BMW to McDonald’s, have issued close to $60 billion in bonds in recent days, according to Refinitiv. That sum nearly matches the value of dollar-denominated bonds issued over all of August, and marks the third-largest issuance in a week this year.

The post-Labor Day period is typically busy for bankers and traders as they return from summer vacations, but the sharp increase in bond issues in recent days has surpassed expectations, analysts said.

It’s a sign of rising confidence that companies are willing to borrow rather than conservatively manage their debt loads, and investors are willing to lend rather than sit on cash, as concerns about a potential recession diminish.

“There is no question in my mind that the economy is slowing, but there is also no question that it’s not going into recession,” said Andrew Brenner, the head of international fixed income at National Alliance Securities. “The window for companies to borrow is wide open right now.”

The improving sentiment in the bond market echoes the rally in the stock market this year, as investors have become increasingly hopeful that the economy can achieve a so-called soft landing.