It appears the post-PIMCO-effect is not wearing off. Having had a weekend to soak up the reality of what outflows will mean for Gross’ old shop, credit markets are once again flashing bright red this morning as managers reach for protection ahead of expected redemptions which would force selling into an illiquid market. High-yield spreads are 25bps wider at their highest since early Oct 2013. Equity futures are legging lower with the weakness.
Which is dragging stocks lower…
Bigger picture, things have rolled over quickly..
and for those who defend the ongoing equity exuberance of the S&P by noting that their buyback-funding is investment grade backed and high-yield is in trouble due to liquidity and technicals… think again…. the entire corporate bond market is turmoiling…
Charts: Bloomberg
via Zero Hedge http://ift.tt/YFIsfu Tyler Durden