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Wednesday, April 1, 2009
Morning Market Commentary
The equity-credit dislocation continues unabated. Optimism in equities after a 15 pt run up in S&P, while IG12 breaks 200 for the first time. Someone is wrong.
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5 comments:
Tyler, refer to your own AIG post. correlation desks still buying CDS for any reason other than risk. i am with equity market on this..
ISM was better than expected. Inventories lower, new orders ripped higher, and employment ticked up. Thats likely driving equities as people might see the stimulus working in that release
So, the ADP data meant nothing? The fact that debt/GDP is going up instead of down means equities should rally because why not...money is flowing again? We are setting ourselves up for a BIG fall.
CDS is quiet today...its likely IG12 is moving higher on very little trading.
Can you exlplain what IG12 is and why it's relevant? If CDS trade up that means that the % you must pay to insure against default is rising, right? So perhaps CDS rising is just due to the closing of the negative basis as leverage comes back to the investment community.
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