Analysis

Why MarketAxess Stock Raced Higher Today

The market was impressed with the company’s strong June and second-quarter operational metrics.

MarketAxess Holdings (MKTX 3.72%) shareholders had good reason to launch their fireworks one day ahead of July 4. On Wednesday, their stock’s price closed nearly 4% higher, a notably better performance than the 0.5% advance of the bellwether S&P 500 index. Investors liked what they saw with the company’s latest set of operational metrics.

Double-digit quarterly jumps

Just before market open, MarketAxess published its trading volume and transaction fee data for both the month of June and the second quarter.

For the latter period, the fixed-income securities trading platform operator saw average daily volume (ADV) grow by nearly 23% year over year to more than $34 billion. The company noted a particular leap in trading with U.S. government and other public-sector debt (such as municipal bonds); all told, the ADV of such titles rose 31% to $20.4 billion.

MarketAxess also reported encouraging momentum with Axess IQ, its platform aimed at the wealth management and private banking segments. Its ADV rose by almost 23% to hit $135 million for the quarter.

It’s not just the timing

In its press release unveiling the figures, MarketAxess didn’t hesitate to point out that it held market share of just under 20% in high-grade U.S. bonds.

While we can attribute much of the interest in public-sector debt to the persistence of relatively high interest rates, it’s clear MarketAxess is executing well and reaping the benefits. What’s also encouraging is the company’s strong position in the high-grade segment — always a draw for institutional investors — and the emergence of Axess IQ.

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