US Research Quarterly, 2012 Q2



August 22, 2012

US Research Quarterly, 2012 Q2

About the Report

A quarterly report containing brief commentary and statistics on the U.S. capital markets, including but not limited to: municipal debt, U.S. Treasury and agency debt, short-term funding and money market debt, mortgage-related, asset-backed and CDO debt; corporate bonds, equity and other, derivatives, and the primary loan market.

Summary

Total Issuance Fell in Second Quarter 2012 

Securities insurance totaled $1.68 trillion in the second quarter of 2012, a 6.3 percent decrease quarter-over-quarter (q-o-q) but a 10.1 percent increase year-over-year (y-o-y).


On June 20, 2012, the Federal Reserve indicated that the economic activity was expanding at a more moderate pace than earlier in the year, noting that the growing concerns about the euro area and weaker-than-expected U.S. economic data continued to weigh on financial markets. According to the Bureau of Economic Analysis, U.S. gross domestic product (GDP) increased at an annual rate of only 1.5 percent in 2Q'12, down from the 2.0 percent increase in 1Q'12. The unemployment rate remained persistently elevated, ending June at 8.2 percent, unchanged from March. European sovereign woes continued to weigh on the fundamentals in the second quarter, culminating in tense Greek elections mid-June.

The Fed reiterated its intention to keep the target Fed Funds rate at 0-0.25 percent at least through late 2014 and announced the expansion of its 'Operation Twist' program through December 2012. The Fed plans to sell $267 billion in shorter-term debt and buy the same amount of longer-term securities to extend the maturities of assets held on its balance sheet.

The equity markets fell slightly in the second quarter 2012. The S&P 500 closed 2Q'12 at 1,362.16 (a 3.3 percent decrease q-o-q), the NASDAQ Composite Index finished the first quarter at 2,935.05 (a 5.1 percent decrease from 1Q'12), and the Dow Jones Industrial Average (DJIA) decreased as well, finishing 2Q'12 at 12,880.04 (a 2.5 percent decrease q-o-q).

Total gross issuance of Treasury bills and coupons, including cash management bills, was $1.83 trillion in 2Q'12, 8.1 percent under the $1.99 trillion issued in 1Q'12 but slightly above 2Q'11's $1.82 trillion. In 2Q'12, the total issuance of coupons rose to $573.0 billion, a 1.8 percent and 3.2 percent increase, respectively, from 1Q'12 and 2Q'11.

Federal agency long-term debt issuance was $161.6 billion in the second quarter, a 6.0 percent and 9.5 percent increase respectively, from 1Q'12 and 2Q'11.

Municipal issuance volume totaled $114.2 billion in the second quarter of 2012, an increase of 45.1 percent from 1Q'12, and an increase of 65.5 percent from 2Q'11.

Issuance of mortgage-related securities, including agencies and non-agency pass-throughs and collateralized mortgage obligations, totaled $465.7 billion in the second quarter, a 4.2 percent decrease and a 26.9 percent increase, respectively from 1Q'12 and 2Q'11.

Asset-backed securities (ABS) issuance totaled $53.1 billion in the second quarter, an increase of 12.0 percent and 41.6 percent, respectively, from 1Q'12 and 2Q'11. Global funded collateralized debt obligation (CDO) issuance totaled $6.5 billion, an increase of 48.2 percent from 1Q'12 and 232.5 percent from 2Q'11.

Total corporate bond issuance fell to $245.8 billion in 2Q'12, a 39.6 percent and 13.0 percent decrease, respectively, from the past quarter and 2Q'11.

Credits

SIFMA Research 

  • Managing Director, Director of Research: Kyle Brandon
  • Vice President, Director of Statistics: Charles Bartlett
  • Director: Sharon Sung
  • Analyst: Justyna Podziemska

SIFMA Capital Markets 

  • Analyst: Joseph Cox
  • Analyst: Timothy Cummings
  • Analyst: Craig Griffith
 

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Disclaimer

The Securities Industry and Financial Markets Association (SIFMA) prepared this material for informational purposes only. SIFMA obtained this information from multiple sources believed to be reliable as of the date of publication; SIFMA, however, makes no representations as to the accuracy or completeness of such third party information. SIFMA has no obligation to update, modify or amend this information or to otherwise notify a reader thereof in the event that any such information becomes outdated, inaccurate, or incomplete.


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