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Stocks Tumble; High-Yield Credit Risk Spikes To 1-Year Highs
It appears the post-PIMCO-effect is not wearing off. Having had a weekend to soak up the reality of what outflows will mean for Gross' old shop, credit markets are once again flashing bright red this morning as managers reach for protection ahead of expected redemptions which would force selling into an illiquid market. High-yield spreads are 25bps wider at their highest since early Oct 2013. Equity futures are legging lower with the weakness.
Which is dragging stocks lower...
Bigger picture, things have rolled over quickly..
and for those who defend the ongoing equity exuberance of the S&P by noting that their buyback-funding is investment grade backed and high-yield is in trouble due to liquidity and technicals... think again.... the entire corporate bond market is turmoiling...
Charts: Bloomberg
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Catching "down" to reality?
Where are those dead paper-pushers I was promised ekm?!?!?
I want to see some bodies, high-level bodies...
Can someone tell Goldman to relase a bit more scrizz?
pods
The biggest of the bubbles is bursting, bonds. Of course, this includes the tech, biotech, echo housing, fracking and ignorance bubbles.
That must be why yields are going down...
In the words of EKM The paper pusher deaths are imminent.
His interpretation of the word imminent vastly differs from mine.
PIMCO is yesterday's excuse to mask the reality of the world being warm, soft, steamy, brown and smelly.
I all but guarantee you that PIMPCO and Gross will be somehow used as an excuse for the markets and economy. His departure cause a surge in rates. As people pulled money out of funds. Meaning that All Fund Managers Be Decreed Systemic Risks and therefore, Regulated More Closely (must buy treasuries only to be exempt... or mortgages) and the Higher Rates Cause the Q4 GDP to be Negative.
See, all those money guys faults.
Time to implement Directive 10-289.
I am going to argue this is an excuse to get rid of the Democraps and in the long term put a black eye on their dear leader. Elections loom in over a month. The problem is that the Rupugnicans are no better.
"The problem is that the Rupugnicans represent the same oligarchs..." -- fixed.
PIMCO is just the latest round of trying to put lipstick on a pig......
Gold up a massive $2
I used to buy JNK (similar to HYG) well under 38 on dips. It's still over 40 now and the quarterly div is lower than it used to be.
Doesn't take much of a move to eat a whole year's dividends. Two points will do it.
Called breakeven spread analysis, my friend.
At low levels of rates and narrow spreads, any widening is noticeable.
So you're saying S&P should now be at 1750?
How about 1000? or 666? Can't wait for that to happen.
Contrary to many people here, I don't think the FED or any CB has the tools to stop that from happening.
Sure they can, but at this stage they can't juggle all the plates simultaneously. The taper has caused rates to spike as the marginal buyer,aka The Fed, has exited the market. This has been helpful to some, but it is anything but helpful to stocks, and anyone who is already struggling with debt like Uncle Sugar.
Bet your sweet bippy that QE will be amped back up in due course, because, ultimately, Uncle controls The Fed. And Uncle's prospective borrowing costs and interest payments are set to skyrocket. The equity dump takes some pressure off the yield spike, but it will be insufficient.
Patience. We won't hit 1000 overnight. It will probably take at least a month with the Fed intervening daily to let friends and family get out with as much as possible.
It took more than two and a half years after the crash of '29 for the market to bottom out. Avalanches really don't move very fast but there is no way to stop them once they start and no matter what some people think it will be hard to spot that first pebble start to move.
Never fear, old Yeller says it's all contained. Right after she baked everybody a cookie to sooth their nerves.
I'm feeling right as rain, how about you? Got my dry powder ready to buy the dips.
Life is good in the matrix. The steak is tender and juicy.... and not at all genetically modified.
Ignorance is bliss.
"I should have taken the blue pill."
I'm hiding out in GoPro, the $15 billion helmet cam company
Agree. This stock is a must-have. I mean - honestly - who could ever manufacture a camera on a stick now, after GoPro has such a head start. Nobody will be able to catch up and they can charge virtually any price for that product. And I am sure on top of that, they have the patent for the stick.
Oh and I especially love when it says "P/E: -" --> this means it will only go up. Guaranteed!
Does the stick bend. If so, then GoPro is in trouble.
The GoPro stick bends if you shove it up your ass and heat for 10 minutes.
Diagrams included for USSA sheeple that have been processed by .gov edumication facilities.
then post it on facefuck, everyone will "like" you
Gee, when you describe it that way a lot of the magic disappears.
Hong Kong could be the opening salvo of a total disintegration of a "China." If the Chinese respond to this with a Tiananman Square like approach that could be construed of as both there and elsewhere within China as an outright attack.
Obviously the world is so used the "China" being a unitary state it probably seems beyond incomprehensible to pretty much anyone but the scholarly classes that such a "zhong" does not really exist at all.
what chart is the High yield Credit risk referecing anyone please?
Damnit, Janet! Hurry up with getting the Chicago office set up with trading capabilities. I will not tolerate a down day.
and Gold is up ....wait for it $1 LOL
Hang Seng futures on the lows now down 2.8% are leading U.S. and European indices down 1%: watch the live action free at:
http://www.investing.com/indices/hong-kong-40-futures-advanced-chart
It looks like Kevin was 5 minutes late to the desk today. Must have been traffic related. BTFD you D's. It's their only/last tool.
Thanks for the jinx, Tyler.
And he keeps doing it and doing it, again and again.
Algos got to be reading this site and sit in waiting for this contrary post to appear.
50 point bounce for the Dow since this post
Dow >17000 up 90 now, someone is sure mocking ZH this happens everyday
Zero Hedge got a mention on a Christian End Times Prophecy website of all places. The Blood Moons prophecy has already been out there what's new is the Shemitah angle of 7 years debt reset from the Old Testament. While both are not "Biblical" prophecies they are interesting nonetheless.
http://www.prophecynewswatch.com/2014/September24/241.html