Hawk, Hawk, Dove - Stocks Go Birdwatching
The market's latest fascination: birds.
Here is BofA's Hans Mikkelsen explaining why those who wish two trades stocks should be able to react within milliseconds of spotting blue tits and other flying objects.
High Grade new issue supply has totaled $108bn so far in September, and in terms of unguaranteed issuance this is the most since the outbreak of the Financial Crisis in 2008, the busiest month of September, and the fifth busiest month overall on record in unguaranteed issuance. With $230bn priced so far, this has also been the busiest third quarter on record. However, we expect a significant slowdown in supply going forward as we approach the 3Q corporate earnings reporting season and issuers enter blackouts. For the month of October we expect just $50-60bn of HG supply, and for the fourth quarter we are not looking for more than $150bn. While we recognize that there is significant uncertainty associated with these estimates - and certainly the third quarter surprised to the upside – with continued inflows that suggests investors will need to focus their attention back on the secondary market. While the decrease in supply can be incrementally supportive of spreads, this adds just marginally to the larger picture that conditions of excess demand already favor spread tightening toward year-end.
So add birds of the Federalus Reservus order and family, to the only other thing that matters for stocks these days: just how much money Brian Sack will devote to such humanitarian purposes as giving insiders such as Jeff Bezos, Larry Ellison and Steve Jobs the undreamed of price levels from which to continue selling their stocks.
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