High Yield Headlines

  • Inflation and Counterfeit Credit, Report 19 Nov 2017

    Let’s take a look at an often-repeated idea that is popular in the gold and alternative investing communities. The government possesses a printing press. Therefore, it will never default. It will just inflate its way out of the debt. It will devalue the dollar. The government does not set the value of the dollar. And it has no mechanism to set it. So, logically, it has no mechanism to reset it. It cannot devalue it. In the same way, you cannot lower yourself down by your bootstraps since you are...

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  • Before You Book That Vacation, JPM Warns Multiple Spoilers Are Converging In November

    One week ago, Jan Loeys - the person who wrote "The JPMorgan View" for 15 years - announced his exit, as he transitioned from tactical asset allocation to longer-term strategy, and that he would be handing over the authorship to John Normand, and soon Nikos Panigirtzoglou and Marko Kolanovic, but not before summarizing what he has learned in 30 years of investing in a must-read bulletin which he published last week. In any case, this weekend it was Normand's turn to regale JPM's countless...

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  • Hunting Angels: What The World's Most Bearish Hedge Fund Will Short Next

    It's not easy being "the world's most bearish hedge fund", a description we first conceived nearly three years ago, and one look at Horseman Capital's returns over the past three years confirms it: after generating market-beating returns for much of its existence, things went bad in 2015, and much worse in 2016... ... when the Fund had a record net short equity position of over -100%, just as the market ripped higher after the Trump election. That said, 2017 has been much better for Horseman...

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  • "Nightmare On Bond Street": HY Turmoil Leads To Third Largest Junk Outflow In History

    Following this month's drop in junk bond prices and the 40 bps spread widening in high yield last week - the largest since November 2016 - Bank of America has come up with an apt title for its weekly fund flow report: "Nightmare on Bond Street"... ... and with good reason: last week, US junk bond funds and ETFs reported a $4.43bn outflow this past week - the third largest outflow on record and the largest since August 2014. This follows a smaller $0.94Bn outflow the prior week. Non-US HY...

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  • Bill Blain: "Stock Markets Don't Matter; The Great Crash Of 2018 Will Start In The Bond Market"

    "Stock markets don’t matter. The truth is in bond markets. And that’s where I’m looking for the dam to break. The great crash of 2018 is going to start in the deeper, darker depths of the Credit Market."

    @zerohedge
  • Nasdaq, Bitcoin Surge To Record Highs As China Saves The World

    IP surges (thanks to hurricanes), Congress passes a tax bill that has no hope of passing the senate, but a huge Chinese liquidity injection sends stocks soaring and proves... Seemingly thanks to a Risk Parity rebound... And a huge China liquidity injection... “The increase in cash additions will help soothe market sentiment,” said Qin Han, chief fixed-income analyst at Guotai Junan Securities Co. And indeed it did: US equity markets soared today... (Small Caps and Trannies best, Dow and...

    @zerohedge
  • Goldman Reveals Its Top Trade Recommendations For 2018

    It's that time of the year again when with just a few weeks left in the year, Goldman unveils its top trade recommendations for the year ahead. And while Goldman's Top trades for 2016 was an abysmal disaster, with the bank getting stopped out with a loss on virtually all trade recos within weeks after the infamous China crash in early 2016, its 2017 "top trade" recos did far better. Which brings us to Thursday morning, when Goldman presented the first seven of its recommended Top Trades for 2018...

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  • Stocks Sink On Tax Trouble As Yield Curve Carnage Continues

    It's been a while... The S&P 500 and USDJPY were utterly inseparable today... Futures show the swings better once again...with the late day fade on Senator Johnson... And while stocks tried their best to 'get back to even' - they failed... Another day, another BTFD parade... VIX topped 14.5 today briefly... then was ripped lower into the european close... then towards the close at Senator Johnson said NO on the tax bill, markets weakened once again... Financials entirely ignored...

    @zerohedge
  • Yield Curve Collapses; High Yield Credit Gets Mauled: Banks Rally

    Content originally published at iBankCoin.com What? We're not supposed to see BAC higher on a day when spreads are collapsing, but we are nonetheless. US yield curve now 64 bps, the flattest in over a decade. Inversion is still a long way off, right? Not really - it has flattened 64 bps in less than a year. pic.twitter.com/SzWfwiuiKS — Jamie McGeever (@ReutersJamie) November 15, 2017 Financials are strong on an otherwise weak day, in spite of high yield getting killed once again. More on that...

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  • Albert Edwards On The Selloff: "Comparisons With October 1987 Are Entirely Justified"

    Last week, when equities were still blissfully hitting daily record highs, we showed the one "chart that everyone is talking about", or if they weren't they soon would be: the sharp, sudden disconnect between the junk bond and stock market ... ... a disconnect which - as we showed at the time - was last observed in mid-August 2015, just days before the infamous ETFlash crash. Fast forward to day, with stocks suddenly hitting air pockets around the globe and rapidly catching down to junk...

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  • Stocks Stagger On Tax Turmoil As Junk Debt Dumps To New 8-Month Lows

    Yellen warns "valuations are at the high end of ranges" but tax cut details diss stocks. It was all going great until I hit 310kph... Ugly data from China overnight sent China bond and stock prices lower... Notably Gold remains the only asset higher since the Saudi chaos... All Cash Indices ended the day red but the dip-buyers rescued Dow, S&P, and Nasdaq green fro the month... Futures show the crazy swings best once again... Dow (blue) almost ramped back to unch for the...

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  • Some Non-Hyperbolic Junk Talk

    Authored by Kevin Muir via The Macro Tourist blog, If you are looking for some breathless post about the recent collapse of the junk and high-yield market over the past couple of weeks, then click somewhere else. I know it makes for exciting writing, but I won’t do it. There is already more than enough hyperbolic rhetoric filling the financial airwaves. But the really amusing part? Have any of these doomdayers actually had a look at the return of these bond markets over the past year? I hate...

    @zerohedge
  • This Ain't Your Grandfather's Capitalism

    Authored by David Stockman via Contra Corner blog, The financial system is loaded with anomalies, deformations and mispricings - outcomes which would never occur on an honest free market. For example, the junk bond yield at just 2% in Europe is now below that of the "risk-free" US treasury bond owing solely to the depredations of the ECB. Indeed, madman Draghi has purchased $2.6 trillion of securities since launching QE in March 2015, and during the interim has actually bought more government...

    @zerohedge
  • Junk Bond ETFs Have Rough Two Weeks: Deals Pulled, Outflows Rise

    By Mish Shedlock Volatility has returned, at least in the junk bond market. JNK, the Barclays High Yield Bond ETF, and HYG, the iShares High Yield Bond ETF, both had the steepest decline in three months. Is this another buy the dip opportunity, or is risk avoidance about to take hold? Cracks Widen Reuters reports U.S.Junk Bond Sector Ends Rough Week On Calmer Note. Cracks in the red-hot U.S. high-yield bond market are starting to widen, with two junk-rated companies pulling their...

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  • Hindenburg Omen Sighted As Stocks Suffer First Weekly Loss In 2 Months

    Credit markets to stocks this week... Before we start - let's celebrate. As @BespokeInvest notes, we're making history today: first 12 month period in the history of the S&P 500 without a 3% drawdown. The VIX is also the lowest on record using a rolling 12 month average. All major indices ended the week red. This is the Dow & S&P's first weekly loss in the last 9 weeks. Trannies were worst (worst weekly loss since July). Small Caps worst week since August. This was VIX's...

    @zerohedge
  • It's Not Just Junk Bonds That Have Given Up

    We have been warning about significant divergences between equity prices and other asset classes for a few weeks (most notably the decoupling from equity risk and credit risk, junk bonds), but as BofA notes its not just these assets that are breaking away from soaring Nasdaq levels, in fact many of the rally's leaders are crashing... in a way we have not seen recently. High yield risk has suddenly decoupled from equity markets... And Jeffrey Gundlach has been warning something's got to give....

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  • Buy Bloomberg's "Bubblicious" Index Of Bubbles

    If only every year was this “easy”. Unfortunately, the old adage of the trend being your friend becomes harder to adhere to as a guidepost as one asset market after another goes into bubble territory. As we discussed here, Alberto Gallo of Algebris Investments has ranked (see here) the top 14 bubbles worldwide, according to characteristics such as duration, appreciation, valuation and the degree of irrational behaviour. When we started in this industry, we were taught by those with the gray hair...

    @zerohedge
  • Tax Tantrum Sparks Stock Slump As Credit Crash Continues

    To the middle class... Before we start, don't forget the chaos in Japan overnight... Gold remains the biggest winner in the post-Saudi-chaos world... The Dow's 7-day win streak is broken... Trannies were worst Trannies are now down 6 days in a row, and all indices are red on the week... VIX pushed higher on the Senate tax bill (topping 12), but soon enough the army of vol-selling-machines stepped in and righted the ship... 'High Tax' Companies dropped early but rebounded as details...

    @zerohedge
  • Are "Happy Days" In Credit Over? According To BofA, Just One Thing Matters

    Just one month ago, we showed a chart according to which the corporate bond spreads as tracked by the BofA/ML Corporate Master Index had tumbled to a level not seen since July 2007... ... while European high yield bonds have sunk below 2%, a head-scratching plunge in European "high" yields. As we have observed previously, the catalyst for the dramatic collapse in yields has been an obvious one: central banks, which have not only crushed asset volatility, but through the ECB's explicit...

    @zerohedge
  • The Chart That Everyone Is Talking About

    Something has changed... For months high yield bond yields have been compressed alongside rising stock prices as the flood of global liquidity from central banks. ECB buying has driven European junk bond yields below those of US Treasuries and in turn that has pressured global high yield risk lower - despite a rise in leverage to record highs. However, the last two weeks have seen a big shift in flows as investors have fled high yield funds and pushed into investment grade and Treasuries. And...

    @zerohedge
  • Junk Bonds Dump To 3-Month Lows Amid Longest Curve Flattening Streak In 6 Years

    Ignoring the surge in junk bond risk and collapse of the yield curve, stock investors were overheard saying... Gold remains the post-Saudi-purge winner... Stocks rebounded today. The Dow has nopw beenup 7 days in a row thanks to today's last second ramp... But despite small caps bounce, they remain red on the week... as Dow, S&P, and Nasdaq scramble green VIX was once again driven back below 10 to ensure a green close for The Dow etc... The Media complex was busy today with rumors...

    @zerohedge
  • Strong Foreign Demand Pushes Yield Lower In Stopping Through 10Y Auction

    After yesterday's mediocre 3Y auction, moments ago the US Treasury sold $23 billion in 10 year paper in a very well received auction. The high yield of 2.314% was fractionally lower than October's 2.346%, and stopped through the When Issued 2.316% by 0.2bps. 94.01% of the bids at the high yield were accepted. This was the first 10Y refunding to stop through since August 2016. The bid to cover of 2.48 was fractionally lower than last month's 2.54, and was higher than the 6 month average of 2.40....

    @zerohedge
  • What Risk: Deutsche Bank Ramps Up Loans Business In Desperate Scramble For Profit

    We have some sympathy for John Cryan, but only to the extent that he has the near impossible task of putting the biggest German bank back on a sound footing regaining market share and generating some elusive revenue growth: a virtually impossible task as long as Europe is choked by NIRP. As we noted two weeks ago, Deutsche’s 3Q 2017 results confirmed that the situation is still getting worse: Deutsche Bank’s Q3 2017 revenues were €6.78 billion, below market expectations of €6.88 billion. The...

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  • Yield Curve & Credit Markets Are Flashing Red As Small Caps Slump On Tax Turmoil

    Overheard in Washington today... Equities slipped, the dollar gained and the Treasury yield curve flattened further as markets reacted to the suggestion that Senate tax writers will release a bill Thursday, according to Senate Finance Chairman Orrin Hatch. Stock indexes across the Gulf were among the world’s worst performers, with Saudi Arabia’s Tadawul All Share Index falling the most in a year before paring losses. Since the Saudi shenanigans, bonds and bullion are...

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