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The High Yield Bond Market Is Blowing Out Again
This was not supposed to happen. Since The Fed raised rates the temporary (one day) stability in high-yield bonds has been obliterated. Across all sectors, HY bonds are being sold; the HY bond ETF is tumbling back to recent lows; and Energy spreads have surged to record highs. In a nutshell, it's not over yet!
Everything is being sold...
As HYG breaks key support...
And Energy spreads spike to recod highs...
As Energy Fwd P/Es begin to fall back to reality...
Charts: Bloomberg
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Junk in the trunk!
25 times earnings is reality?
Only in uhMerika.
Already shorting HYG. This is going much much lower.
Energy P/Es: that is so 2014.
Wow. Who knew a 1/4% raise in interest rates could cause such a ruckus?
Nobody - I repeat, NOBODY - could have seen this coming.
not according to CNBC its not ... according to them & their guests, this move in equities & high-yield is merely "noise"
Does an oncoming train equate to noise as well?
That depends is it a heavily laden oncoming train or is it an African oncoming train.
Ohhh, good (but disturbing) point.......
That noise they hear is a tsunami. When the tide pulls out, we'll see who was swimming naked.
No worries, I have it on good authority that high yield is contained.
but Mr. Yellen said contained, all is well.
shop til you drop this weekend Goys!
The whole system is under severe stress. With or without 25 bps. It's the verbal farts that keeps it up.
Anybody paying attention to TED spreads?
Blowing out and breaking 30 yr resistance today.
The last time we were testing this resistance was 2010 and late 2011/2012 and the Fed was LAUNCHING QE, not HIKING, and Draghi was drawing his line in the sand, not having to walk back hawkishness.
http://www.onlypricesmatter.com/2015/12/18/ted-spreads-breaking-above-30...
Doesn't look as bad if you look at the daily
https://research.stlouisfed.org/fred2/series/TEDRATE
Actually, the daily makes it look all the more compelling as a major break-out from a cycle's worth of consolidation...
http://schrts.co/3Fc8fe
I've been trying to understand all these HY articles being posted on ZH over the last week, but just can't understand why the seemingly small declines, like the 0.35% decline of HYG today, would equate to 'blowing out' as the title of this article suggests.
Anyone willing to explain it to me like I'm 5?
HYG does not hold energy related junk debt in its top holdings. Energy is around 10% of its holdings
Thanks sun, appreciate the help.
HYG fell 50% from 105 to 62 in 12 months to Nov 2008:
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=Hyg&inst...