(Reuters) -Bond trading platform MarketAxess beat Wall Street estimates for second-quarter profit on Wednesday, as heightened market volatility sparked record trading results.
WHY IT'S IMPORTANT
Shifts in U.S. trade policy under President Donald Trump and changing expectations for Federal Reserve rate cuts have roiled bond markets, spurring investors to reposition portfolios amid rising recession fears.
MarketAxess' results offer an insight into the bond market, widely viewed as a more reliable indicator
of recession than the stock market.
CONTEXTMounting recession fears have sparked greater bond trading volumes as investors aggressively rejig their portfolios to hedge risks.
The New York-based firm expects continued market volatility and bets on its recent product enhancements like new portfolio and block trading capabilities to strengthen its share of the U.S. credit market in coming quarters.
KEY QUOTE
"Our new initiatives, along with a supportive market environment, contribute to record revenue and ADV (average daily volume) across most products and regions during the quarter," said MarketAxess CEO Chris Concannon.
BY THE NUMBERS
On an adjusted basis, MarketAxess earned $2 per share in the three months ended June 30, beating Wall Street expectations of $1.96, according to data compiled by LSEG data.
Total ADV jumped 43% to record $49 billion in the quarter.
Credit products, which generate about 90% of MarketAxess' revenue, posted a 22% rise in ADV to a record $16.80 billion, driven by strong trading activity across U.S. credit, emerging markets, and eurobonds.
(Reporting by Atharva Singh; Editing by Vijay Kishore and Shailesh Kuber)
