How distressed is distressed debt right now? Covid pandemic distressed
The deeply distressed tail of the leveraged loan universe has grown to levels not seen since the beginning of the pandemic, with technology the single biggest sector under pressure. That’s according to strategists at JPMorgan Chase, who on Tuesday wrote that the value...
Bonds say “Worry” but stocks look at projected earnings and say “What, me worry?”
Bond yields keep rising. Premiums for holding risky bonds keep climbing. Bonds below investment grade are trading at deeply distessed prices. The bond market is clearly signalling tough, risky, potentially loss-filled times ahead. And stocks just don’t care The Nasdaq...
The September jobs report poses a huge challenge for the Fed
What a difference an employment report makes. Before the September jobs report, released on Friday, October 2, the CME FedWatch Tool, which looks at the Fed Funds Futures market for its read on traders’ sentiment, was giving 70.9% odds of a 25 basis point interest...
I’d down with a bad cold
My apologies. I slept for 18 hours yesterday in hope of fighting if off. I hope to be back to my regular posting schedule tomorrow.
The Treasury selling continues–and could stretch into October, the worst month for bonds
Yields on the U.S. Treasury’s longest-dated bond rose for a sixth straight day, crossing another key threshold amid a deepening selloff across global debt markets. The yield on the 30-year Treasury closed at 5.57% after touching 5.61% on Tuesday, a level last seen in...
Bonds sell off on promise of more war with Iran
The selloff in the U.S. bond market deepened on Monday after President Donald Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, and Iran vowed that it wouldn’t soften its conditions to reopen the Strait of Hormuz. Iranian officials have expressed...
A key Fed inflation argument is crumbling–and economic data later this week could take odds of an October interest rate increase higher
The inflation debate at the Federal Reserve has been whether supplyside shocks such as the closing of the Strait of Hormuz to oil and petrochemical tankers should be treated as one-off events. And whether the Federal Reserve should look through these supply side...
Wait–there’s much more AI debt to worry about–there’s $1.65 trillion off the books
A number of readers pointed out that my piece–“It’s not just Treasuries–how about the rout from AI debt at Oracle?”–on the soaring debt at Oracle from its spending on the AI infrastructure build out was much too optimistic. Besides the danger...
Treasury Secretary Bessent tries to jawbone the Fed
Intervening in the Treasury market worked so well last time, why not try it again? On August 19, Treasury Secretary Scott Bessent announced an enlarged long-dated Treasury buyback program. The policy was to at least double the maximum repurchase size—from $2 billion...
Will oil prices run higher along with Treasury yields after Trump rejects latest Iran offer?
President Donald Trump’s rejection on Saturday of Iran’s latest cease-fire proposal that offered to reopen the Strait of Hormuz and restart talks on the country’s nuclear program in exchange for U.S. concessions is likely not only to push oil prices higher but...
It’s not just Treasuries–how about the rout from AI debt at Oracle?
On Thursday Oracle’s (ORCL) credit default swaps spiked to record highs. Investors are worried at the size of Oracle’s debt load. And wonder if profits will arrive early enough to meet the debt burden. Oracle isn’t an isolated worry–it’s just the poster child...
Adding to my long-dated Treasury short TBF
The ProShares Short 20+ Year Treasury ETF (TBF) is up 10.22% for 2026 as of the close on September 23. The ETF, which gains as long-dated Treasury bonds fall in price, is likely be a profitable hedge–and indeed just plain profitable–into 2027 as we get...
Treasury plunge gets plungier–10-year yield hits 5.20%
Another day, another 9-basis-point jump in the yield for 10-year Treasuries. The yield hit 5.20% today and is now up 51 basis points in a month and 106 basis points, that’s a little more than a full percentage point, in a year. (Remember rising yields mean falling...
The bond sell-off is turning into a rout
The yield on the 10-year Treasury rose 15 basis points to 5.11%. The yield on the 5-year Treasury rose to 5%. The yield on the 2-year Treasury hit 4.90%. It was a perfect storm of bad news–all of which could get repeated tomorrow. Stronger-than-expected...
Viking Therapeutics pops on GLP-1 news, gains 36% on the day
Waiting for a catalyst on Viking Therapeutics (VKTX) has certainly been trying. But today the stock gained 36% on news of very positive Phase 2 obesity data for injectable VK2735, Viking Therapeutics’ dual GLP-1/GIP agonist. Even after today’s gain, I’d note my...
A late day rally lifts gold and silver–this looks like a technical bounce
Traders saw an explosive move in metals last part of the day with miners in the VanECK GOLD Miners ETF (GDX) up as much as 4%, the GDXJ junior gold miners ETF up over 4% and silver juniors also showing a 4% gain The late move was mainly a bullion-and-margin leverage...
Is a Fed bent on interest rate increases good or bad for bonds?
Which will it be this week? After the Federal Reserve raised its benchmark interest rate 25 basis points on Wednesday, Treasury bonds rallied with the yield on the 10-year Treasury falling from 5.02% on September 16 to 4.93% on September 17. (Remember when bond prices...
The next interest rate increase from the Fed?
A coin flip for the October meeting of the Federal Reserve. Just about certain for the December meeting. The CME FedWatch Tool, which tracks investor and trader sentiment by looking at the price of Fed Fund futures, put the odds of an interest rate increase at the...
Saudis tell Europe, No crude next month
Saudi Arabia has told at least two oil refining customers in Europe that they will be allocated no crude next month under long-term agreements after the kingdom’s key pipeline to the Red Sea was attacked. European customers normally receive Saudi Arabian crude on...
After the Fed’s hike, the question is how many and for how long? Here’s a discouraging data point from Costco
Costco has raised the price of motor oil sold under its exclusive private-label as well as limited how much of it customers can buy weekly as oil prices climb yet again. And while the company hasn’t said how long the price increase might last, supply forecasts say...
The Fed decides to hang together; goes for credibility on inflation if they can keep it
Reading Wednesday’s decision by the Federal Reserve to raise its benchmark short-term interest rates by 25 basis points to a target range of 3.75% to 4.00%, I’ reminded of two quotes attributed to Ben Franklin. First, is his famous argument for why the colonies should...
Hotter than expected CPI inflation number convinces the market that Fed will raise interest rates next week
Odds of a 25 basis point increase in the Federal Reserve’s benchmark short term interest rate, at the Fed’s September 16 meeting, rose to 86.7% from 72.4% yesterday, according to the CME FedWatch Tool after a key gauge of U.S. consumer prices rose by more than...
Another nail in the coffin of the 60% stocks/40% bonds portfolio allocation
Notice of two really important portfolio allocation developments courtesy of the September 8 Metals and Mining Substack (MetalsandMining.substack.com) First, Bank of America now shows 10-year rolling annualized returns on U.S. 15-year-plus Treasuries at minus 2% in...
Apple’s foldable Duo won’t offset the predicted 17% drop in smartphone industry sales in 2026
Foldable phones may be the only part of the smartphone industry that will grow this year. The problem, though, is that foldables account for less than 2% of the handset market. In response to an industrywide memory chip shortage driven by the artificial intelligence...
Time to build a metals ladder–and to put short-term volatility and the long-term trend on your side
A metals ladder? What’s that? You’re probably familar with the concept of a bond ladder. A bond ladder is a portfolio of individual bonds with maturity dates spread out at regular intervals. Instead of investing all your fixed-income money in one bond that...
Bond market to U.S. Treasury Secretary: Who’s your Daddy?
Just a day after U.S. Treasury Secretary Scott Bessent warned financial markets to remember that “I am the house now,” the $32 trillion Treasuty market rejected the Trump administration’s latest attempt on Wednesday to lower borrowing costs, and pushed the 10-year...
Friday’s CPI inflation report making investors nervous
Want to debate which is putting more pressure on stocks, higher oil prices because of the Iran war or fears that Friday’s CPI inflation report will push the Federal Reserve into hikng interest rates? Today Brent crude settled around $98 a barrel, and kept climbing...
There’s no room at the chip foundry–through 2026
Global wafer foundry utilization is nearing 90% as intense AI-driven demand keeps advanced and mature chip capacity tight through 2026, according to Digitimes. Overall fab utilization is approaching 90%, with no significant price relief expected before 2027. Surging...
In August China adds the most to gold reserves since 2023
China added the most gold to its reserves since 2023, accelerating purchases in August even as gold prices surged. Holdings at the People’s Bank of China, one of the world’s biggest official-sector buyers, rose by 650,000 ounces, according to data released by the...Jim’s Daily Email Alerts:
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