Investment Grade Credit Crashes As Dow Dumps 500 Points

It would appear - by the 500 point drop in The Dow - that equity markets, and their Polyanna-ish commentators, can no longer ignore the collapse in investment-grade credit markets.

IG credit risk is now at its widest in six months and IG CDX is even worse... (NOTE that HY remains elevated but not as much as IG).

As funding tightness and interbank market stress spreads into corporate credit markets...

And all of this stress is hitting stocks - as The Dow tests the lows of the day....

... for one simple reason: the more IG blows out, and the wider the spread, the fewer corporate buybacks in the future as corporate Treasurers and CFO reassess how increasingly expensive it is to repurchase their own stock.