Credit Markets Are Flashing Red

Despite rebounds in US (and less so European) equities and drops in both regions' 'VIX' measures, the last few days have seen an ominous reawakening in credit markets that is far more systemically concerning than a volatility ETN...

European credit spreads are back near cycle wides...

 

And US HY spreads are pushing back towards last week's wides...

 

And it's not just HY credit, US investment grade credit spreads are starting to crack wider...

 

Fund outflows in HY and IG resumed their 2018 trend yesterday...

 

And credit remains notably decoupled from stocks...

 

As rate- and credit-vol remain notably elevated...

Comments

TheRideNeverEnds A Sentinel Fri, 02/23/2018 - 23:06 Permalink

Yea I can tell by how the nasdaq was only up ten percent in the last few days that the market is finished.  

 

Next week it it will probably only go up 5%.

 

 It’s basically crashing.  

 

 

Meanwhile gold is surging to up -3% on the week, you should totally buy it.

Sure facebook and netflix have gone up 1000% in the last few years but gold is shiny.  You like shiny things right goy?

In reply to by A Sentinel

KenilworthCookie Fri, 02/23/2018 - 09:09 Permalink

The bond markets are the first to sniff out the Bullshit in the markets.And if the cost of borrowing starts rising quickly especially with an inverted yield curve then Sell Mortimer Sell comes to mind.

KenilworthCookie Arnold Fri, 02/23/2018 - 12:33 Permalink

Yes but the ECB has some stale shit on their balance sheets with those bonds they bought in December from that retail conglomerate that have fallen dramatically as of late.Agreed the Fed can step in to buy bonds in an indirect way.Question is does the Swiss national bank want to buy or sell the falling knives that is the stock market.

In reply to by Arnold

Cerulean Fri, 02/23/2018 - 10:37 Permalink

Hi, Could someone be kind enough to give the tickers of the different indices in the above charts.

European " Crossover" HY Credit Spread

European VIX

US HY Credit Spread

US IG Credit Spread

Thank you

 

 

bobsmith5 Fri, 02/23/2018 - 14:06 Permalink

Every time there is a mini crisis in any market globally the central bankers pull another rabbit out of their bottomless hat.  As a result they get more and more control over the perception of the global markets.  At this point I have no clue, and neither does anyone else, as to what might finally bring down completely and permanently this house of cards.

Look at all the financial crisis in the last 50 years.  Not one of them has fundamentally changed the heart of this fake phony false fraudulent global monetary system.  After every one of them they only gain more power over the whole thing.

Kefeer Sat, 02/24/2018 - 10:19 Permalink

Oh bubble, oh bubble, you grow so big.
The Federal Reserve is a money hungry pig.
Slashing the rates and debasing our wealth.
Destroying our future and America's health - author unknown