This morning's bounce in stocks off the overnight lows is being entirely ignored by credit markets. US HY Energy spreads just broke 1050bps - record highs, worst than during the 98 crisis. Broad HY spreads have surged wider to 18-month wides. But perhaps most worrisome, investment grade credit spreads are 'relatively' underperforming, bursting to 77.5bps - the widest in 14 months.
Equity bounce ignored by credit...
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Broad HY markets are surging wider as managers seek any protection and HY energy breaks 1050bps...
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But it is IG credit's surge that is most worrisome....
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As contagion wreaks havoc.
