“Buy-side traders are upping their game and behaving more like the sell side in that they are becoming increasingly price makers and not just price takers. As a result, they need more advanced and fit for purpose technology.”

US market regulator, the Securities and Exchange Commission (SEC), has reported buy-side firms feel pressured not to publicly speak out about the challenges of the new issue process for fear of seeing reduced allocations in the future.

The trend extends beyond just dollar volumes, though. These entrenched players are cementing their place in the global fixed-income markets with strategic acquisitions and advancements that make bond trading more streamlined.

NASDAQ agrees to sell its U.S. fixed income electronic trading platform, formerly known as eSpeed, to Tradeweb Markets for $190M in cash, adding to its wholesale U.S. Treasurys busines. 

While individual investors using Reddit’s WallStreetBets or other online forums still have little direct influence on the broader debt markets, speculative stock-buying can cause real ripple effects. 

Figuring out what those bonds are worth when they aren’t trading is a huge challenge. Every time an investor purchases or sells shares in a fund, the transaction has to be done based on the value of the whole portfolio. If underlying security prices are higher than they should be, investors selling shares will get more than they’re entitled to, while those buying will wind up paying more, and vice versa.

The tale of Gary Gensler’s transformation has always been remarkable. He went from being one of the youngest partners in the history of Goldman Sachs Group Inc. to becoming a favorite of progressive Democrats as a financial regulator during the Obama administration. Now, it’s about to add another chapter and Wall Street is very worried.

HUB’s greenfield platform will be built by asset managers to transform the industry’s operating model by providing flexible and modular solutions across middle and back office functions, all while reducing cost and mitigating risks. The platform will accelerate the move to a digital operating model enabling asset managers to deliver innovative solutions to their clients both now and in the future.

Blackstone is just one of many investors embracing the quant strategies in bond markets, which has been relatively slow to adapt to the new algorithm-driven reality compared to equity markets. Big managers like Renaissance Technologies, Point72, and Millennium began building up teams over the last couple of years

“I assert, currently, you are not getting paid for credit risk and this is certainly a major consideration when you look at your portfolios,” Mark Grant, chief global strategist, fixed income, at B. Riley Financial, similarly writes in his Out of the Box client note. This bond-market veteran puts the blame on the Federal Reserve and other central banks for creating a “borrower’s paradise” and “fixed-income investor’s hell” by holding interest rates down, in part to help finance massive fiscal deficits.