This morning’s bounce in stocks off the overnight lows is being entirely ignored by credit markets. US HY Energy spreads just broke 1050bps – record highs, worst than during the 98 crisis. Broad HY spreads have surged wider to 18-month wides. But perhaps most worrisome, investment grade credit spreads are ‘relatively’ underperforming, bursting to 77.5bps – the widest in 14 months.
Equity bounce ignored by credit…
Broad HY markets are surging wider as managers seek any protection and HY energy breaks 1050bps…
But it is IG credit’s surge that is most worrisome….
As contagion wreaks havoc.
via Zero Hedge http://ift.tt/1qWm6UG Tyler Durden