by Chris
Stocks are for show, but bonds are for dough.
Always keep your eye firmly on the credit space. That Federal Reserve could give a rat’s ass about whether or not you are employed or your milk costs 2x what it did last week. They care about the credit markets.
Everything else is a derivative of that to them.
On that note, the spreads on corporate high yield are blowing the heck out:
Given this, and noting the heavy futures buying pressure that began at the very instant the cash equity “markets” closed yesterday, coupled to the idea that things are oversold and therfore probably more buoyant than heavy, I would be very surprised if today is not a rally day for US equities.
Plus, can’t have people heading into the final buying weekend before Xmas being uncheery, right? Certainly not with retail inventories being stuffed to the proverbial gills.
Still, the credit markets are speaking…I’m watching those especially carefully right now.
Corporate bond issuance shrinks to 7-year low as selloff …
US Leveraged Loan Exodus Deepens as Outflows Top $3 Billion
Investors withdrew $3 billion from mutual funds that buy the debt, according to Lipper, while exchange-traded funds lost $299 million, the data show. It was the .