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STRATEGIC INVESTMENT INSIGHTS (SII)

INSIGHTS

SHORT TERM
(Next 2 Quarters)

INTERMEDIATE TERM
(Next Year)

LONG TERM
(>1 Year)

Limited Time Public View!

This page is a duplicate of the Bonds & Credit SII page for subscribers. It is currently one of our many SII’s and is provided as an example of what you can expect to see as a subscriber.   At the bottom of the page you will find a ‘Watch List’ of instruments we are currently monitoring, one of them is clickable and leads to that specific securities SII page where you will find more information and a link to a live chart.  

BONDS & CREDIT

SITUATIONAL BIAS:
  ENDING DEBT SUPER CYCLE: NEGATIVE
  “MINSKY” MELT-UP: POSITIVE

“Corporate debt and their equity will face the biggest pain when the next downturn comes — Corporates are more levered than they were pre-crisis”

Infamous Greg Lippmann of “The Big Short” 

THE CORPORATE DEBT LEVELS OF “ZOMBIE” CORPORATIONS AS WELL AS SELECT SOVEREIGN & EMERGING MARKET DEBT MAKE THEIR BONDS POTENTIAL MAJOR 2018-2019 ‘SHORT’ OPPORTUNITIES.

The next big financial downturn is likely to start in corporate debt. Easy-money monetary policies have allowed firms to load up on borrowings, with around 37 percent of companies being classed as highly leveraged in 2017 compared with 32 percent in 2007 prior to the last financial crisis.

PRESENT MATASII FOCUS IS TWO FOLD

1- HY CORPORATE JUNK BONDS – Is Setting Up for a Major Decline As Credit Markets Tighten (See “Road Map to Repricing of Risk” & Guide To Selecting Junk Bonds)

2- 10Y UST NOTE – A Yield Rise From 1.34% tp 3.15% is a Major Capital Appreciation Gain For Bonds

MARKET MESSAGES (Click to Enlarge)
SPECULATORS HAVE NEVER BEEN MORE SHORT BONDS.. EVER -- NOR ARE SPECULATORS SELDOM RIGHT??
SPECULATORS HAVE NEVER BEEN MORE SHORT BONDS.. EVER — NOR ARE SPECULATORS SELDOM RIGHT??
GOVERNMENT IS PRESENTLY SELLING SHORT TERM DEBT - IS IT PLANNING OR EXPECTING LONGER TERM DEBT TO SOON HEAD LOWER ON YIELD AND HIGHER ON PRICE?
GOVERNMENT IS PRESENTLY SELLING SHORT TERM DEBT – IS IT PLANNING OR EXPECTING LONGER TERM DEBT TO SOON HEAD LOWER ON YIELD AND HIGHER ON PRICE?
THE GROWING SIZE OF THE US DEBT IS A PROBLEM BUT THE "ROLLOVER" AT HIGHER RATES IS A MAJOR LOOMING PROBLEM
MEANWHILE THE EU CUTTING CSPP
THE GROWING SIZE OF THE US DEBT IS A PROBLEM BUT THE “ROLLOVER” AT HIGHER RATES IS A MAJOR LOOMING PROBLEM MEANWHILE THE EU CUTTING CSPP & PSCC WILL FURTHER SIGNIFICANTLY AGGRAVATE THE PROBLEM
MAJOR PROBLEMS LOOMING GLOBALLY IN PRIVATE CORPORATE DEBT (Click To Enlarge)
GLOBAL CORPORATE DEBT IS BECOMING UNSUSTAINABLE
GLOBAL CORPORATE DEBT IS BECOMING UNSUSTAINABLE
GLOBAL CORPORATIONS WILL BRING NEXT WAVE OF PAIN BEGINNING IN 2019 - BONDS WILL BEGIN FAILING EARLIER
GLOBAL CORPORATIONS WILL BRING NEXT WAVE OF PAIN BEGINNING IN 2019 – BONDS WILL BEGIN FAILING EARLIER
DRIVEN BY SUSTAINED EASY CREDIT GLOBALLY
DRIVEN BY SUSTAINED EASY CREDIT GLOBALLY
HIGH YIELD BONDS ARE HIGHLY OVER-LEVERAGED AND EXPOSED TO RISING RATES OR A SLOWING ECONOMY
HIGH YIELD BONDS ARE HIGHLY OVER-LEVERAGED AND EXPOSED TO RISING RATES OR A SLOWING ECONOMY
FALLING FREE CASH FLOWS ARE ALREADY PROBLEMATIC
FALLING FREE CASH FLOWS ARE ALREADY PROBLEMATIC
10-20% OF ALL PUBLIC CORPORATIONS ARE NOW CLASSIFIED AS "ZOMBIE'S" OR "CHALLENGED".
10-20% OF ALL PUBLIC CORPORATIONS ARE NOW CLASSIFIED AS “ZOMBIE’S” OR “CHALLENGED”.
ECB'S CSPP PROGRAM IS PRESENTLY KEEPING 6-9% OF EUROPEAN STOXX CORPORATIONS ALIVE
ECB’S CSPP PROGRAM IS PRESENTLY KEEPING 6-9% OF EUROPEAN STOXX CORPORATIONS ALIVE
15% OF THE S
15% OF THE S&P 500 CORPORATIONS ARE NOW “ZOMBIE’S”

MARKET RESEARCH

  • 05-01-18-SII-BONDS & CREDIT-Credit Markets Warning-1

    WARNING SIGNS IN CREDIT MARKETS APPEARING FOR ZOMBIE CORPORATIONS

    WARNING SIGNS IN CREDIT MARKETS APPEARING FOR ZOMBIE CORPORATIONS MARKET MESSAGE Private sector may give a more accurate signal for recession ‘We are entering dangerous territory’ on credit indicator — SOURCE: 05-01-18 Bloomberg – “There’s a New Curve in Town and It’s Flashing Red” — The private sector may hold the real clues to recession […]

  • TNX CBOE 10yr Treasury Note Yield IDEA

    TNX CBOE 10yr Treasury Note Yield IDEA

    Our previous update (Jan 21/2017) gave a couple of high probability possibilities to watch out for.  Our first paragraph said: “An initial break of 2.3 offers potential opportunity for a drop to fill the first gap, with a another potential drop to the next blue s/r zone below”.  This is pretty much what occurred.  Initially the […]

  • 04-29-18-SII-BONDS & CREDIT-Record UST Short Speculation-1

    SPECULATORS HAVE NEVER BEEN MORE SHORT BONDS…EVER? – NOR ARE SPECULATORS SELDOM RIGHT!!

    SPECULATORS HAVE NEVER BEEN MORE SHORT BONDS…EVER? – NOR ARE SPECULATORS SELDOM RIGHT!! — SOURCE: 04-28-18 ZeroHedge “”This Won’t End Well” – Speculators Have Never Been More Short Bonds… Ever” — “It’s a no-brainer…” As the yield on the 10Y US Treasury note broke above the 3.00% Maginot Line this week (for the first time […]

  • 04-27-18-SII-BONDS & CREDIT-1Y Bill & 2Y Note-1

    ITS THE 2Y UST, NOT THE 10Y UST THAT IS WORRYING BOND INVESTORS

    ITS THE 2Y UST, NOT THE 10Y UST THAT IS WORRYING BOND INVESTORS  — SOURCE: 04-24-18 ZeroHedge – “It’s 2-Year Yields, Not 10-Years, We Worry About Most” — Earlier today, we showed that according to a growing number of traders and strategists, “the scariest chart for investors” is not the 10Y, and whether or not it is […]

  • 04-27-18-SII-BONDS & CREDIT-TNX Yields to Likely to Rise-1

    BoAML: “THE 10Y UST IS NO LONGER A “SAFE ASSET” – HERE’S WHY”

    BoAML: “THE 10Y UST IS NO LONGER A “SAFE ASSET” – HERE’S WHY” — SOURCE: 04-26-18 ZeroHedge – “BofA: The 10Y Treasury Is No Longer A “Safe Asset”, Here’s Why” — At the end of his lengthy presentation to DoubleLine investors in January, Jeff Gundlach, who was aggressively pitching commodities at the time, a trade that has […]

  • 04-21-18-SII-BOND & CREDIT-Junk at Record Net Leverage-1

    JUNK BONDS AT RECORD NET LEVERAGE LEVELS AS INTEREST COVERAGE RATIO FALLS

    JUNK BONDS AT RECORD NET LEVERAGE LEVELS AS INTEREST COVERAGE RATIO FALLS HY Leverage at record highs.. HY spreads returned to their January tights while their IG (Investment Grade) and EM (Emerging Markets) counterparts remain significantly wider…

WATCH LIST

Limited Time Public View! (cont.)

Here is the Watch List of securities for the Bonds & Credit SII.  While we are currently only watching 4 at the moment for Bonds & Credit, other SII Watch Lists contain 25+.   The symbol for TNX links to its SII page where you can find more information and a live chart link.  Remaining symbols are similarly linked for subscribers.

MORE on Watch Lists

Note potential technical trigger levels for Long and Short are given: these are taken directly from the chart and can be found in our IDEAS. When the market reaches either of the levels, the Current Price will light up, alerting that possible action is near.