Houston, we have a serious problem... With only 20% of US Shale regions remaining economic at these oil price levels, [2] it should not be surprising that the credit risk of the US
Energy sector is exploding to near 1000bps... and contagiously infecting
the broad HY market...
Credit risk in the energy sector is starting to infect the broad HY market - HYG at 2-year yield highs and HYCDX near 15-month wides...
[3]
Which signals considerable pain to come for US Energy stocks..
[4]
* * *
The denial is so loud it's deafening
Charts: Bloomberg
