Tag "credit markets"

Sovereign Debt Stew: U.S. Treasuries Are Not Without Risk

The Earth is flat Cigarettes are healthy Leeches are the cure for everything The universe revolves around the Earth California is an island Red wine is healthy, unhealthy, healthy… Facts are essential as they offer humans a sense of stability in a chaotic world. For instance, we find comfort in…

Credit Markets Still Bullish As Virtuous Cycle Continues

When corporate bond buyers stepped up into the January/February 2017 issuance period, they were almost immediately rewarded with price markups thanks to what seemed like a never-ending compression of risk spreads, coupled with the drop in 10yr Treasury yields between January and September of last year. The same cannot be…

Slippery Signs Coming from the Junk Bond Market

High yield bonds can often serve as a leading indicator for the equity markets. And although indexes which track high yield returns have not yet broken down, the two largest junk bond ETFs have transitioned into a downtrend. The move lower in the junk bond market aligns with the corrective…

Unusual Credit Indicator Reports Big Drop In Demand

As I was going through and updating the various indicators that I monitor something in the credit space surprised me. The NACM CMI (think of this as the credit manager’s version of the ISM PMI), saw a major drop in a number of its key sub-indexes in the December report. The chart…

Here’s The Problem With Tight US High Yield Credit Spreads 

In my conversations with clients a common topic of interest is that of US high yield credit spreads. Indeed, it’s almost the opposite issue of the stock market – if you think S&P 500 (NYSEARCA:SPY) PE ratios are too high, you probably also think that US High Yield credit spreads…

Credit Conditions & Demand Holding Up

In this week’s chart spotlight I want to share a couple charts with you regarding current credit conditions. In the August report from the National Association of Credit Managers (NACM), its Credit Managers Index (CMI) ticked higher. But there were other data points within this report that caught our eye…

U.S. High Yield Credit Spreads Low – As It should Be?

Most people are probably aware that US High Yield credit spreads are trading at the bottom end of the range – almost 1 standard deviation below the long term average.  This is a fact.  But what is not a fact is whether credit spreads are *too* low… It’s worth examining…

May 2017 Credit Markets Recap: Big Month For Corporate Bonds

May 2017 was a sufficiently stunning month in the credit markets. And it deserves an update on the litany of data the I laid out in my last update (April Credit Markets Recap). For comparison, I highlighted some key credit markets performance indicators for the month of April and then…

April Credit Markets Recap: The Bull Market Marches On…

April proved to be yet another month of frustration for bears and those, like me, who are simply looking (and hoping) for a stock market pullback large enough to get longer U.S. equities. I have long harped on the notion that the credit markets are, and have been, driving the…

Corporate Credit Markets: Party Like It’s 2017!

It has been quite a while since I have written about the state of the corporate bond market. Longtime readers know that I follow the corporate credit markets very closely as the main tell of what drives equity markets. And considering the noise surrounding the markets, it probably a good…