BIG PICTURE
Outlook 2010
Our performance outlook for the speculative grade bond market in 2010. We outline reasons for optimism and the risks ahead.
All Swapped Out Update
Our regular update of distressed cash issuers with heavy CDS hedging.
Leverage Healthier
Our quarterly roundup of corporate leverage and flows.
Foreign Selling Slows
Foreign demand for US corporate bonds has steadied.
Technicals: Utilities and Capital Goods
Utility relative performance has accelerated; Capital Goods has slowed. We highlight cheap debt and equity.
SECURITY SELECTION
SPREAD, VOLATILITY, NOTIONALS, SHORTS
We track large changes in spread, equity, implied volatility, out-of-the-money vol, net notional CDS, and short interest for HY and IG issuers.
SENIOR VERSUS SUBORDINATED SPREADS
Our regularly updated gauge of senior vs sub HY bond relative value.
DEBT VERSUS EQUITY
The debt-equity section includes: 1) Bonds with large weekly differences between debt- and equity- performance; 2) Which credits are trading credit-rich/equity-cheap or credit-cheap/equity-rich; 3) We illustrate whether these large moves of the week are a sell-into convergence or a new tradable divergence.
SECTOR ALLOCATION
TECHNICAL SCORING THE MARKET
We provide regular updates of technical models for allocation across the broad HY market, regions, quality- and industry- levels.
TECHNICAL SCORING THE CREDITS
We identify individual corporate bonds that satisfy the market’s revealed preference for region, quality, sector, and valuation technicals.
MARKET TIMING
DEFAULT RATE PREDICTOR
Our market-based one-year default rate forecast for December 17, 2010 shifted lower again.
MACRO TRACKER
The latest changes in six of the ten Macro Tracker variables (“Impact of Change”) favor narrower spreads.